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Gap Returns to Television Advertising After Four Years

Gap Inc. (GPS), the biggest U.S. specialty-apparel retailer, is running television ads for its namesake brand for the first time in four years as it seeks to build on the chain’s recent turnaround.

The two videos debuting today feature musicians performing modern renditions of songs their fathers made famous. In one ad, Alexa Ray Joel, sings Billy Joel’s “Just The Way You Are” accompanying herself on the piano. In the other, Dhani Harrison, son of The Beatles’s George Harrison, sings and plays “For You Blue” on guitar. The spots promote Gap’s “Back to Blue” campaign for the brand’s fall denim selection.

Chief Executive Officer Glenn Murphy is bringing Gap back to television after recent successes in drawing customers in with new denim and fitness apparel. Sales at Gap stores open at least a year have gained for six straight quarters, helping propel the shares to the best performance for an apparel company in the Standard & Poor’s 500 Retailing Index this year.

“Now that they’re seeing strength in the Gap brand itself, it’s probably time to invest in television advertising,” Jason Asaeda, a New York-based analyst at Standard & Poor’s, said in a telephone interview before the release. Asaeda has a hold rating on the shares. “With television advertising, if people haven’t been in a store in a while, if they like what they see they might go in and check it out.”

The ads were shot in single takes in the studio and feature minimal editing, a contrast to the highly edited, high-energy performances that characterized previous Gap campaigns, such as its iconic 1998 khakis campaign set to swing music.

Introducing Audiences

Other Gap commercials have featured celebrities from Audrey Hepburn to Madonna. While viewers may not recognize the performers in the new ads, they probably have heard of The Beatles, said Seth Farbman, chief marketing officer for the Gap brand. The ads are meant to introduce audiences to something new, whether its millennials learning about the musicians’ fathers or older generations experiencing new versions of a familiar song, he said.

“Discovery is a big part of it for everyone, but especially millennials -- that is like social capital and value,” Farbman said in a phone interview. “It’s very simple to borrow this person’s equity and put it on your ad, but that’s different than sharing something you think people are going to like.”

The ads will run until Oct. 13, Tricia Nichols, the senior director for global consumer engagement and partnerships, wrote in an e-mail. The spots will run around events, such as NFL football games, the American Music Awards and premieres of popular shows such as Modern Family, she wrote.

More Affordable

With Gap’s sales improving, the company can more easily afford the investment in television ads, and the brand may see them as a way to draw shoppers’ interest in the absence of a strong apparel trend like last year’s colored denim, Stephanie Wissink, a Minneapolis-based analyst at Piper Jaffray Cos., said in a phone interview before the release. She has the equivalent of a hold rating on the shares

“They have the brand presence, whether you like the product or not,” Simeon Siegel, a New York-based analyst for Nomura Securities, said in a phone interview before the release. Siegel has the equivalent of a hold rating on the shares. “Maybe they’re spending now so when the product comes back, then they can really push it.”

Gap hasn’t decided whether to run more television ads for the brand during the holiday season, Murphy said on the company’s earnings call Aug. 22.

Gap rose 0.4 percent to $41.81 at the close in New York. The shares have gained 35 percent this year, compared with a 19 percent increase for the Standard & Poor’s 500 Index.

To contact the reporter on this story: Lindsey Rupp in New York at lrupp2@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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