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Gap (GPS) clearly thinks this fall will be the year their classic hoodie is the coolest (or hottest) thing since sliced bread.
The retailer announced on Wednesday the latest product from its music icon partner Kanye West – Perfect Hoodies. The 100% double-layered cotton hoodies in six different colors are reminiscent of the early 90s. Gap sells them for $ 90 a pop, children’s sizes at $ 70. In June, a year after signing a deal with West for a new clothing line, Gap launched the first product under the Yeezy brand – a $ 200 quilted coat called a “round jacket”.
Gap’s hoodie comes as no surprise.
“Our classic Gap hoodie has a moment. So much so that we’ve released it in a vintage brown for pre-orders delivered this fall. And it’s not just on TikTok. We’ve seen high levels of research on Google. Seven times more people searched for the hoodie on gapinc.com in the second quarter of a year ago, “Gap CEO Sonia Syngal told analysts on a earnings conference call. in August.
Gap shares rose 5% on Wednesday after the product was last released. But the bump was brief. The company’s shares fell more than 3% on Thursday morning. Stocks fell behind the broader market in the third quarter of this year, likely due to supply chain issues plaguing the retail sector. The title is down 27% since the start of the quarter.
Being proud to show off a Gap logo on the chest hasn’t been the norm for about a decade (maybe more), so it’s understandable that Syngal mentioned it on the company’s last call.
“The data shows we’re attracting a younger fan base with our teenage logo hoodie, four times larger than adult sizes. I share all of this for a reason,” added Syngal. “It’s a brand that resonates, and it’s a brand that people care about and want to wear proudly on their chest.”
Luckily for Gap, it is seeing momentum with its cost-cutting efforts (see store closures) and Old Navy, as interest in Gap hoodies may only be a short-term failure as consumers continue to embrace comfort during the pandemic.
The retailer said second quarter comparable sales at Old Navy were up 18% from the second quarter of 2019 (before the pandemic). On the same basis, Gap’s comparable store sales were up 3% and Banana Republic’s down 5%. Operating profit margins improved by 190 basis points.
Gap is expected to release its third quarter results on November 24.
Brian Sozzi is an editor and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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