The Gap 2011 Annual Report Download - page 6

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At Gap Inc., we own brands, not just stores. We compete
against other global retailers in our home market and around
the world, with the intention of standing out to consumers
by offering a clear and consistent interpretation of American
style across our distinct brands. Over the last year, a consider-
able amount of work within our design and merchandising
organizations has gone into improving our ability to deliver
on this goal, especially as we head into 2012.
Our competitive advantage lies in offering our global
customers widespread access to our product, regardless
of their shopping preferences. We achieve that through
our strategy of operating multiple brands, through multiple
channels and across multiple geographies. This powerful
combination sets the stage for future sales and earnings
opportunities.
To deliver on this potential, in 2011, we made a number of
significant organizational changes. More and more, custom-
ers shop across channels within a brand, so we brought
together our Outlet and specialty divisions last year. This has
produced great synergies within Gap and Banana Republic.
It is also enabling us to identify the ideal store mix in each
market; for example, we’re in the process of rebalancing our
fleet of Gap stores by reducing the specialty and increasing
the Outlet expressions of the brand in North America.
At Gap, we’ve also brought our creative talent together
under one roof in New York to deliver a “global-local”
approach to the business. The Gap Global Creative Center
sets a singular vision for our product and marketing around
the world, while also providing an ability to localize for
the specific needs of our customers. We share ideas directly
between our design and marketing teams, who work side-by-
side with our merchants for International and North America.
The first product line from this new team, along with the
corresponding “Be Bright” marketing campaign, arrived in
stores at the beginning of the 2012 fiscal year.
At Old Navy, we adjusted both the product and marketing
strategies towards the end of the year. We introduced a new
marketing platform – Funnovations, Inc. – that premiered
during Holiday 2011, and that we plan to continue in 2012. We
branched out into a new category with a successful licensing
Letter to Shareholders