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Gap jeans step into designer territory

The 1969 Premium Jeans line replaces old basics in a bid to win back customers it's lost to stylish competitors. But, skeptics say, can $60 denim really be 'premium'?

August 13, 2009|Andrea Chang

During a visit to a Gap store two years ago, Patrick Robinson didn't need to try on a pair to know that the chain's jeans were the wrong fit.

"I felt there was a problem, and the problem was the jeans hadn't been moved forward with the brand," he said. "The jeans were an old story."

It wasn't idle criticism. Robinson had just been brought in as Gap's executive vice president of design to shake things up amid growing concern that the brand was losing its appeal.

Over the next year and a half, he led an overhaul of the chain's denim, the biggest reworking of jeans in the company's history. Out went Gap's years-old collection of basic straight-leg and boot-cut jeans; in came a line of premium denim featuring "heavy-gauge thread and single-needle stitching," "vintage-inspired busted side seams" and styles such as the Always Skinny and the Sexy Boot.

The new denim line, called 1969 Premium Jeans in homage to the year the San Francisco company was founded, is set to officially debut today, although the jeans have been slowly rolling out in stores during recent weeks.

Gap executives are hoping the line will help the retailer capture a share of the designer denim market, which includes pricey labels such as True Religion, 7 for All Mankind and Citizens of Humanity.

They also are counting on the jeans to pull Gap out of a prolonged slump that has seen its sales and image sag as customers turned to more stylish competitors.

"Denim is our birthright -- I think we have ceded some of our business to others over the years as the market has changed and as people have looked to status brands," said Marka Hansen, president of Gap North America. "We're not changing our positioning, not at all. What we're trying to change is relevance."

Already, there is skepticism that the jeans will be the right kick in the pants for Gap.

Eli Portnoy, a Los Angeles brand strategist and marketing expert, said Gap was jumping on the denim bandwagon too late, noting that even Levi Strauss & Co. sells premium jeans.

"Denim is still a good business, but it's a crapshoot for Gap because they're not leading the way," he said. "Denim alone is not going to be what saves Gap Inc."

Designer denim companies have fared remarkably well during a recession that has hit discounters as well as luxury chains. As consumers have slashed discretionary spending, they're still shelling out for expensive denim -- paying $200 or more for a pair of ripped jeans.

By selling its premium jeans starting at $59.50 for women and $54.50 for men -- the same price as its old line -- Gap is positioning itself to snap up shoppers who have long coveted premium denim but couldn't afford it, said Paula Torch, a specialty retail analyst with Needham & Co. in San Francisco.

"From a marketing standpoint, it's a good way to get the contemporary customer back into the stores," she said. "They're returning to iconic, classic Gap -- but with a twist."

But that has led designer brands, and the well-heeled shoppers who buy their jeans, to scoff that true premium denim can't be had for $59.50.

"I would say to the Gap that you are deceiving the consumer. It's not premium denim," said Jeffrey Lubell, chairman and chief executive of True Religion Apparel Inc., which is based in Vernon.

"Certainly they're making an attempt. But to me it looks more like Levi Strauss than anything else."

There aren't set rules that distinguish premium denim from regular dungarees, so it often comes down to perception, marketing and sky-high prices.

Gap executives contend that the company is able to make its jeans affordable because of the apparel giant's economies of scale. But unlike many premium brands that make their jeans in the U.S., Gap's new line is manufactured overseas, which Lubell said hurts its integrity as a premium product and is the real reason for the relatively low price tag.

Jeans aside, Gap executives and retail experts agree that the brand's cachet had dropped even before the recession began. Analysts blame the slide in popularity on several seasons of misguided merchandise offerings and too many stores.

Gap "tried to get involved with some fashion trends that just didn't work," Torch said. "They lost their heritage of who they were."

Last week, Gap reported that sales at its North America stores open at least a year fell 10% in the quarter ended Aug. 1 compared with the same period last year.

Its parent, Gap Inc., which also operates the Banana Republic and Old Navy chains, said company sales totaled $3.24 billion in the second quarter, a 7% decline compared with a year earlier.

Gap already has generated considerable buzz for the jeans and is carefully marketing them with an eye toward the fashion-forward customer. In Los Angeles, the company has hung billboards and posters with "Born to Fit" -- the line's slogan -- and opened a temporary, "pop-up" jeans store on trendy Robertson Boulevard.

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