In the past 10 years, Gap has tried it all. Now, the largest U.S. retailer is once again on the upside after going back to the brightly-colored basics that put them on the map.
Shares were up 43 percent this year through yesterday, thanks to customers flocking to the Spring 2012 "Be Bright" campaign, which features a rainbow of jeans and t-shirts.
Gap going "back to basics'' is at the essence of its success, said Dorothy Lakner, an analyst at Caris & Co. in New York. She upgraded her rating of the shares yesterday.
The brand has also made a slew of management changes, most notably opening a global creative center in New York and bringing back former executive Tracy Gardner to revive the women's business.
The brand has struggled since fashion legend and former CEO Mickey Drexler was abruptly fired in 2002.
Since then, Gap had unsuccessful and expensive ad campaigns featuring everyone from Ashton Kutcher to Madonna. The classic, All-American brand also dabbled in charity, social media and couture. Their most infamous decision was releasing a new logo in 2010 that lasted only one week.
Gap can stay successful by continuing to stick to what they're good at: colorful, all-American basics, Lakner said.
"When the fashions are good, there is more confidence in the business recovering," Lakner said.
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