Gap Inc. F1Q09 (Qtr End 05/02/09) Earnings Call Transcript

Tags: Brand, Gap Inc., Call Transcript, Earnings, Denim, Investment, Branding, Finance, Marketing, Seeking Alpha, The Gap Inc.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Janet Kloppenburg - JJK Research.

Janet Kloppenburg - JJK Research

Glen, I was wondering if you could address what it would take for the company to invest in a traffic-driving marketing program for GAP. If you feel good about the assortments, what is the catalyst you need for investment in this brand to perhaps bring the customer in and perhaps there will be a campaign around the denim introduction. But if you could elaborate on that, or what other traffic-driving motivators you might use to help build productivity in the GAP.

Glenn K. Murphy

We look at it that since the beginning of this year we have certainly been making some traffic investments in the business. And Old Navy has been the one we have mostly put a lot of investment behind but we are now starting to put some investment behind GAP as well.

And they're not big investments. I think they're just we're trying to learn. We're making some traffic-driving ideas that are—we have one for Memorial Day this weekend. The marketing team have a few other ones planned over the next couple of months.

And you're right to zero in on the denim campaign. Our 40^th anniversary is in August and as part of the 40^th Anniversary celebration and recognizing the heritage of the brand, denim is a key cornerstone of heritage in the brand so Mark and the team have put together, and they were working on it for the better part of a year, what is the right relaunch for the 40^th Anniversary. Denim is the right category. Some work has been done on it.

There's going to be a campaign but I would not say it's going to be break-through, but there is certainly going to be, as we talked about with Old Navy, a fully-integrated campaign. There is work being done in the stores to make sure the stores, actually the denim shows up. It's going to be a unique look, it's going to brought forward to the front of the store. There is going to be some incremental investments on top of that.

So I would not characterize it as an Old Navy-type campaign that we started at the end of February, but as I said in the opening remarks, I believe it's the beginning of a more confident approach to the GAP brand and I hope we have some early reads that are positive. That will then us to make other sustainable investments after that.

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