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Gap Aims for Edgier Tone With Singers’ Ad

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Times Staff Writer

Can the Material Girl deliver material results for the Gap?

After a year of working to revive sales by stocking apparel basics such as white shirts and khakis, Gap Inc. is adding some edge to its strategy this week with TV ads starring Madonna and hip-hop star Missy “Misdemeanor” Elliott.

Although the 44-year-old Madonna is better known for cone-shaped bras than for khakis, she may be an apt marketing choice for Gap.

“She’s associated in the consumer’s mind with recreating herself and always coming out to be hip and relevant,” said Joseph Teklits, an analyst with Wachovia Securities. “Gap, obviously, is trying to do the same thing.”

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The ads -- essentially mini-music videos that feature the two singers wearing customized Gap corduroy pants, an integral part of the new fall line -- come at a pivotal time for the company that owns 4,200 Gap, Old Navy and Banana Republic stores.

It has been 10 months since former Walt Disney Co. executive Paul Pressler snagged the top job at Gap, and the back-to-school shopping season will give investors their first chance to measure his effect on the San Francisco-based company. The fall season “is going to be very key,” Teklits said.

Gap has for more than a decade hired actors and musicians, from Dennis Hopper to Willie Nelson to Sheryl Crow, to appear in print and TV ads for its flagship Gap stores. Using Madonna and Elliott as marketing tools could spice up Gap’s image, which in the minds of some shoppers has become “mundane and prosaic,” said Robert Buchanan, an analyst with A.G. Edwards & Sons. In the 30- and 60-second spots, previewed by The Times, the two sing a version of the 1985 Madonna hit “Get Into the Groove” remixed to incorporate elements from “Hollywood,” a single on her poor-selling “American Life” album. Madonna sashays down a city street with a rapping Elliott while onlookers ask “Where’d you get them jeans?”

Madonna wears light blue cropped pants and a white tank top, high-heeled platforms and about $5 million in diamond jewelry. The 32-year-old Elliott -- a Grammy-winning singer known for injecting a ribald, urban, feminist voice into a male-dominated genre -- sports corduroy pants and a matching jacket over a loose-fitting T-shirt emblazoned with her image.

The ad campaign’s theme -- “A New Groove, A New Jean” -- is designed to push corduroy pants as what Gap division President Gary Muto called a “new alternative to jeans.” He said the company selected Madonna and Elliott because it wanted to appeal to young consumers returning to school in the fall, particularly college students.

The ads won’t make any difference to Alex Caudana, 18, who will attend American University in Washington this fall. “I know who Madonna is -- barely. I don’t even know who Missy Elliott is,” said Caudana, shopping last week at the Gap at South Coast Plaza in Costa Mesa.

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But Jami Paley, 34, a Costa Mesa homemaker, said that the older singer, the mother of two, could be a draw for Gap clothes. “I don’t know about a rapper,” Paley said, “but I could see Madonna being good for them.”

Although Gap’s new fall line of multicolored corduroy pants, jackets and miniskirts is the work of Pressler’s team, Muto said Pressler wasn’t involved in developing the line. “But he’s very supportive of the marketing strategy,” Muto said.

Pressler declined to be interviewed for this report.

He had been enjoying a honeymoon of sorts. For months, his predecessor, Millard “Mickey” Drexler, got the blame or credit for the path laid out before Pressler became chief executive in late September. After two years of bleakness, financial results since last fall have improved. What Pressler has to do is keep up the pace, which will be a challenge as sales comparisons get tougher.

Gap’s profit increased fivefold in its fiscal first quarter, the third consecutive quarter of earnings growth for the company. Same-store sales began growing in October, after a more than two-year slump. Last month, the company’s comparable-store sales jumped 10%, contrasted with a 6% decrease the year before, as all divisions marked down apparel to make way for fall merchandise.

The company’s stock has climbed almost 56% over the last year. It closed Monday at $18.86, down 31 cents, on the New York Stock Exchange.

With the retail landscape saturated, analysts are wondering whether Gap will step up store closures. The retailer has said that it would trim square footage by 2% this year, not enough to satisfy some analysts.

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A recent report from Morgan Stanley estimates that Gap should have 500 fewer stores in the U.S. When Gap reached peak profitability in 1999, it had 19 million square feet of stores, noted Lauren Levitan, an analyst with SG Cowan Securities Corp. At the end of last year, its square footage had grown to nearly 30 million square feet.

The company has about 3,300 Gap stores in the U.S., including GapKids and BabyGap.

“We’re looking for a more aggressive move in terms of square footage declining,” Levitan said. At the same time, Levitan added, “I feel pretty good about what we’re hearing about recent business trends.”

Gap spokeswoman Stacy MacLean said Monday that the company had no plans to speed up store closures.

The Gap division is continuing to conduct studies and focus groups to gain a better understanding of the brand’s customer, who is better defined by attitude than age, said Muto, 44.

“It’s not all things to all people,” he said. “It’s looking at how do we become more relevant and serve customers in a more meaningful way.”

The Morgan Stanley report says Gap needs “spot-on product” or an economic rebound this fall to help fuel its turnaround. And with inventory outpacing sales, the retailer needs more customers in the second half of the year or a “merchandising/marketing strategy” that outshines the competition.

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For its fall line, Gap added a few splashes of color. Corduroy pants and jackets -- which sell for $49.50 and $68 -- come in off-white, tan, lilac, red, brown, blue and black.

“I saw the red corduroy pants and I’m in love with them,” said Paley, who was shopping Sunday at the Gap store at Triangle Square shopping center in Costa Mesa.

“I never buy full-price here, but I think they’re really, really cute.”

Santa Barbara resident Janelle Papa, 19, also at South Coast Plaza, said she would buy corduroy pants if the style caught on -- despite the material’s drawbacks.

“The sound it makes when you walk is kind of weird,” she said.

Plenty of retailers are trying to cash in on corduroy this season, including Gap competitors Abercrombie & Fitch and American Eagle Outfitters, which was selling $78 fur-trimmed corduroy jackets for two weeks before Gap’s offerings arrived.

Retail experts say it’s important to be high on shoppers’ lists for fall clothes because consumers visit fewer stores these days.

Gap remains on the radar of back-to-school shoppers, said Britt Beemer, chairman of America’s Research Group, a South Carolina consumer behavior marketing firm.

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When asked which stores they would shop at first this year, Old Navy, Gap Inc.’s lowest- priced chain, ranked fourth with 6.5% of those polled putting its stores at the top of their list. Gap and Target tied for fifth place.

Still, Gap topped the list of only 3.2% of the 1,000 people polled, compared with 9.5% three years ago.

“Gap’s numbers are obviously not what they once were,” Beemer said.

“But there are more people mentioning Gap today than mentioned it a year ago.”

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