In the fall of 2004, Gap put on a splashy ad campaign called, “How do you wear it?” with Lenny Kravtiz and Sarah Jessica Parker. It featured the pair dancing in customized Gap jeans — his with metal studs down the seam; hers with a waist-to-cuff velvet ribbon.
It was just the kind of envelope-pushing fashion Gap needed to compete with popular new designer-inspired denim brands like Diesel, Rock & Republic and Seven for All Mankind.
But there was a catch: the bedazzled jeans, which Gap called a “celebration of personal style,” could not be found at its stores.
Consumers had to buy a pair of basic, unembellished jeans at the store and customize them at a special training sessions held at some Gaps, or take a trip to Home Depot and Jo-Ann Fabrics and figure it out themselves.
The marketing tease is a small case study in what has ailed Gap, which ousted its chief executive, Paul S. Pressler, this week after years of dismal performance at its Gap and Old Navy divisions.
At a time when small, narrowly focused fashion brands — Coach, Juicy Couture, Tahari, Laundry — have become ascendant in American retailing, Gap has served up a steady diet of simple, unobjectionable casual clothing designed to appeal to everyone.
How do they wear it, as the ads asked? Increasingly, they just do not.
In an era of niches, when exclusion is as vital as inclusion, Gap has become an anachronism: a single chain, selling only its own brand, with one point of view, chasing shoppers from birth to death.
“If you stand for everything in fashion today, you stand for nothing,” said Paul R. Charron, the former chief executive of Liz Claiborne, who is credited with revitalizing the clothing company by purchasing fast-growing brands like Juicy Couture and Lucky Brand.
“Brands like the Gap, brands broadly available,” Mr. Charron said, “have a special challenge to be relevant in a period when focus and exclusivity are so important.”
Indeed, consumers are abandoning the chain in staggering numbers. Sales at stores open at least a year, a standard measure of a retailer’s health, have fallen or remained stagnant for 28 of the last 30 months.
And the declines have not been small. Sales fell 8 percent in December and November and 7 percent in October — the most crucial months of the year. The word “disappointing” became a common refrain in every monthly news release explaining Gap’s performance.
Gap operates three divisions: Gap, Old Navy and Banana Republic. All three have struggled, but only Banana Republic is on the rebound.
Niche brands, by contrast, have done so well that they have even reversed the fortunes of the American department store. In the last year, the performance of department stores like Nordstrom and Macy’s has quietly overtaken that of specialty clothing retailers like Gap.
The reason? “Consumers want brands, and we are all about brands,” said Stephen I. Sadove, chief executive of Saks Inc., whose sales have improved sharply in the last year on the strength of designer labels like Tahari and Theory.
“It’s very hard for the specialty clothing stores to keep themselves cutting-edge and fresh,” Mr. Sadove said. “There is a lot of sameness.”
Or walk into the handful of specialty clothing chains like Abercrombie & Fitch, American Apparel and Anthropologie, stores that, like Gap, design their own clothing but have managed to thrive by appealing to small slivers of the public.
Those stores’ environments leave no doubt who their shopper is supposed to be — vintage-loving, 30-something urban women (at Anthropologie); trend-obsessed, preppy teenagers (at Abercrombie & Fitch); and socially conscious hipsters in their 20s and 30s (at American Apparel.)
Abercrombie & Fitch is openly hostile to what it considers the wrong customer — typically anyone over 30 — warding them off with booming music, dark shades on the front windows and teenage employees standing out front.
Gap has veered to the other extreme, putting out a welcome mat to nearly everyone, with well-lighted, sparsely decorated stores and ageless fashions.
“The definition of a specialty store is focus,” said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting firm and investment bank.
Gap does not have that focus, Mr. Davidowitz said. And in trying to meet the needs of infants, teenagers, and even the elderly, its designers play it safe, season after season. “The merchandise is booooooring,” Mr. Davidowitz added. “Too basic.”
Patricia Longo, a 36-year-old makeup artist who lives in Manhattan, is the kind of style-obsessed shopper who has little use for Gap these days. She wears Ugg boots, a Betsey Johnson bag, a Pepe Jeans jacket and a cotton taupe Ella Moss dress.
“They don’t have the new fads,” she said of Gap. “When I look for something new and young and trendy, Gap is not coming to my head.”
And it is not that she buys only designer clothes. Ms. Longo covets designer knockoffs, which is why she shops at H&M, the Swedish retailer known for its fresh-from-the-runway fashions.
So what is Gap to do?
A Gap spokesman, Greg Rossiter, said the company was “totally committed to returning these brands to the leadership they enjoyed for so many years.”
For that to happen, retail analysts said, the chain could start by shrinking, to give its clothes the kind of cachet that Gap had decades ago, before it operated 1,295 stores (not to mention hundreds more Banana Republic and Old Navy stores, which bring the total to more than 3,000). Abercrombie & Fitch, for example, has 361 stores for its flagship brand.
Next, analysts said, it could experiment with brands, as several new specialty clothing stores have started to do. When Martin & Osa, a clothing store aimed at people in their 30s created by American Eagle Outfitters, opened in 2006, it carried its own store brand as well as bags from North Face, sunglasses from Ray-Ban and track jackets from Adidas.
Gap used to carry Levi’s jeans but stopped in 1991. Today, it stocks a single outside brand, Converse sneakers.
Finally, Gap could focus on a narrow group of consumers, and tailor clothing to meet their needs — a prospect that would probably require the chain to become much smaller. “They have to pick out a demographic and go after it with a maniacal focus, to the exclusion of anyone else,” said Bob Buchanan, an analyst at A. G. Edwards & Sons.
“If there is one thing you cannot be in the middle of the mall anymore, it is all things to all people,” he added. “And that is what Gap has been trying to do.”