Banana Republic - Deanna Fabela

Banana Republic
Deanna Fabela & Theresa Balagot
May 2010
History
Banana Republic was founded in 1978 by Mel Ziegler and wife, Patricia, and their search
for a replacement of their well-worn military surplus jacket. By altering the garment’s military
look and adding a comfortable, utilitarian, and everyday style, Banana Republic became a Travel
and Safari Clothing Company in Mill Valley, California.
The company began selling unique items of clothing which defined their company in a
stringer way. Some of their styles consisted of flight jackets, photo-journalist vests, paratrooper
briefcases, and gurkha shorts, which all highlighted the theme of travel and adventure.
By late 1983, GAP combined forces with Banana Republic and sales boomed up to $10
million. Three years later, Banana Republic’s Safari and Khaki concept began to lose its
popularity while GAP companies were booming. GAP gave Banana Republic the rest of the
year to make adjustments, but sales continued to slip and the projected 25 stores only made it to
15 stores in California. Banana Republic then decided that they needed to move away from the
Safari Motif and more in a different direction. Brighter and colorful casual wear were pushed up
to the front of the store which attracted customers into the store. From then on, Banana Republic
became more classic and had over 200 stores in the US.
Today, Banana Republic still “reflects American sensibility with a positive and optimistic
viewpoint. With timeless styles that capture a modern interpretation of classic fashion, its
relaxed attitude expresses a comfortable and confident quality.” GAP Inc. has become the
leading international specialty retailer offering clothing, accessories, and personal care products
for men, women, children, and babies under The GAP, Banana Republic, Old Navy, Athleta, and
Piperlime.
Annual Volume
GAP Inc.’s world headquarter offices are located in San Francisco with product design
offices primarily being based in New York City. GAP Inc. has 3,095 operating stores worldwide
throughout the United States, Canada, United Kingdom, France, Ireland, and Japan. There are
more than 134,000 employees around the world that support the GAP Inc. brands. Here are the
Financial Highlights for the year of 2009:
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2009 Revenue: $14.2 billion
2009 Earning: $1.58/ share on a diluted basis
2009 Net Sales by Division:
GAP North America: $3.8 billion
Banana Republic North America: $2.2 billion
Old Navy: $5.33 billion
International: $1.6 billion
GAP Inc. Direct (online): $ 1.1 billion
Location/environment
By focusing and analyzing Banana Republic stores only in the United States, it gives a
better sense of the demographic on a focused region. As of today, Banana Republic is working
on making a difference by becoming more of an eco-conscious brand for the customers and the
community. The reason behind Banana Republic’s efforts is to reduce environmental impact
while still providing customers with the same standard of quality.
Focusing and only analyzing this region of the world, it would be beneficial for research
of specifically career dresses selling at Banana Republic stores. It would be interesting to see
results for career dresses since there are countless amounts of businesses and companies in the
US.
Other Issues
GAP Inc. reports that in March 2010, net sales were up 12% from last year. Also, net
sales for the five-week period ending April 3, 2010 were $ 1.45 billion compared to net sales of
$1.29 billion for the five-week period ending April 9, 2009. Banana Republic alone made a
positive 10% versus a negative 16% from last year.
“ We’re pleased that we continued to make progress on out foal of driving top line sales and that
we delivered merchandise margins significantly above last year,” said Sabrina Simmons, Chief
Financial Officer of GAP Inc. “While we benefitted from the Easter shift, our improved sales
also reflect that customers are responding well to our brands assortments and value proposition.”
http://www.gapinc.com/GapIncSubSites/csr/MakeADifference/Banana_Republic.shtml
http://www.fundinguniverse.com/company-histories/Banana-Republic-Inc-CompanyHistory.html
http://www.gapinc.com/public/Media/Press_Releases/med_pr_March2010sales04082010.shtml
Department Information:
Target Customer:
25-45 age group, professional, fashionable, 32% have income more than $100,000, generally
ranging between sizes 0-14, looking for affordable high-end garments, conservative, neutral,
sophisticated, business-oriented, valuing quality and fit, financially responsible, self-sufficient,
strong work ethic, inquisitive, opinionated, diverse, good time management, street smart,
connected, and strong purchasing power.
Summary:
Fashion: colorful, floral prints, shorter sleeves, pockets, tie-dresses, shorter length, light weight
fabrics, durability
Economic: good quality and style for good price, coupons, sales promotion, markdowns
Cultural/Societal: flattering construction, accentuate women’s figure, conservative, not too much
flesh, expensive look
Competition: J.Crew, Ann Taylor, LOFT, Anne Klein, Nordstrom, Macy’s
Opportunities: more colors & prints for dresses, more units available in store, more color and
style options in suits, handbag and accessories permanent section in store, scarves with fabric
that doesn’t snag
Classification Information:
Buying Plan: career dresses are largest part of department, rarely move on the sales floor,
average price over $100, all sizes for professional women of all sizes, colors to reflect the season
Summary:
Fashion: floral prints, large straps, slight color with neutrals, warm colors, form fitting, belted,
silk, cotton, jersey, lasting & durable material, easy care, day-and-night looks in one
Economic: customers looking for the best price, less brand loyalty
Societal/Cultural: conservative, less flesh, expensive look
Competition: Banana Republic flagship stores, Banana Republic online store, J.Crew, LOFT,
Ann Taylor, Anne Klein, Nordstrom, Macy’s
Opportunities: more colors & prints, more units available in store, more displays, less
conservative style, more sophisticated
Threats: better prices & quality at competitors, matronly style, need to respond to younger
professional customer