Gap’s Old Navy brand to switch to brand building after admitting to short termism
Gap says it will spend more on long term activity for its Old Navy brand after seeing sales dip 4% in its last fiscal quarter.
Speaking to analysts following its third quarter sales results, CFO Teri List-Stoll, admitted it has focused too much of its spend on short-term tactics.
She told analysts: “Regarding marketing, we had frankly become too heavily dependent on messaging around discounting, as opposed to bigger picture brand messaging focus on product and value that we know resonates with the Old Navy consumer.
“For Q4, we recalibrated our messaging to focus on product stories, highlighting some of our big design ideas for holiday, such as plaids, puffers and Jingle Jammies combined with compelling price points and commercial plans, which is more reflective of Old Navy’s winning value equation.”
Old Navy has also “strategically increased” marketing spend on new partnerships and campaigns, including a Christmas TV campaign starring Broadway star Neil Patrick Harris and a partnership with Netflix on its first animated family holiday movie, Klaus.
Sales for the group, which also includes the Gap master brand and Banana Republic, were also down 4% in the period.
Gap is the latest brand to admit it has overspent on short term tactics. Adidas recently acknowledged it had focused on performance marketing at the expense of brand building.
LVMH buys Tiffany’s for $16bn
Luxury group LVMH is acquiring luxury jeweller Tiffany for $16.2bn (£12.6bn) in what is the biggest ever deal in the luxury market.
The owner of brands incuding Louis Vuitton, Christian Dior and Dom Perignon will pay $135 a share for Tiffany’s, 37% above its current share price. Founded in 1837, Tiffany has more than 300 stores globally and the move will give LVMH a much bigger profile in jewellery and open it up to the US market.
LVMH CEO Bernard Arnault says: “We are delighted to have the opportunity to welcome Tiffany, a company with an unparalleled heritage and unique position in the global jewellery world, to the LVMH family. We have an immense respect and admiration for Tiffany and intend to develop this jewel with the same dedication and commitment that we have applied to each and every one of our Maisons.
“We will be proud to have Tiffany sit alongside our iconic brands and look forward to ensuring that Tiffany continues to thrive for centuries to come.”
Tiffany CEO Alessandro Bogliolo adds: “Tiffany has been focused on executing on our key strategic priorities to drive sustainable long-term growth. This transaction, which occurs at a time of internal transformation for our legendary brand, will provide further support, resources and momentum for those priorities as we evolve towards becoming The Next Generation Luxury Jeweler.
“As part of the LVMH group, Tiffany will reach new heights, capitalising on its remarkable internal expertise, unparalleled craftsmanship and strong cultural values.”
The deal is expected to close in the middle of 2020, subject to approval from shareholders and regulators.
WeWork brings in former Publicis boss as interim CMO
Beleagured office workspace company WeWork has overhauled its management team, bringing in former Publicis boss Maurice Levy as interim chief marketing and communications officer as it looks to put a stop to its recent decline.
Levy is widely credited with transforming Publicis from an agency group focused on France to a global player and the third largest ad company by revenue. He stepped down from Publicis in 2017 but remains on its advisory board.
WeWork faces an uphill battle to turn around its brand image after a series of crises including the departure of its co-founder and CEO Adam Neuman amid questions over its business model, laying off 2,400 (or 19%) of staff and the cancellation of its IPO.
Levy is one of three new people to join the company’s board, with WeWork also hiring a new chief people officer and chief product and experience officer. The appointments come as WeWork executive chairman Marcelo Claure definied his key strategies for a turnaround, saying the company most profitability and generate positive free cash flow.
That strategy includes a focus on customer experience and its core business, as well as on finding ways to expand “smartly and profitably” by better monetising its current spaces.
M&S raids Tesco for new clothing boss
Marks & Spencer has hired a senior Tesco executive to take charge of its clothing and home business as part of its latest attempt to turnaround its performance.
Richard Price, currently CEO of Tesco’s clothing brand F&F, will take on the role of managing director of clothing and home. He has worked at M&S before, spending seven years with the retailer latterly as menswear director before leaving in 2012.
M&S CEO Steve Rowe says: “Richard’s career spans some of the UK’s top clothing brands and he has a proven track record of delivering growth through stylish, great value product. We are building a team of world class talent in clothing and home and, with Richard coming on board, I am confident that the speed and scale of the transformation of the business will accelerate.”
Price is the latest exec tasked with turning around M&S’s clothing business. His predecessor, Jill McDonald, lasted barely two years in the role and was sacked for failing to buy enough stock to meet demand for a range promoted by TV presenter Holly Willoughby.
Price is a more obvious choice to lead the business, having worked in fashion at M&S, Tesco and BHS.
Price adds: “Marks & Spencer clothing and home is a great business that still has strong brand affection and huge potential. I left the business because I felt it was drifting in the wrong direction but now feel we have a real chance to make it special again. The new team has already started to improve product and value and I am looking forward to working with them.”
Price will join next year.
Uber could be banned from London
Uber could be on the verge of a ban in London amid speculation that Transport for London (TfL) may not renew its licence.
The ride-hailing app’s licence runs out tomorrow (26 November) after it was only granted a two-month probationary extension due to its failure to do enough to improve passenger safety.
Sources at Uber told City AM the company is “confident” it will get a licence extension. However, TfL sources told Sky News it is considering a ban and that there is “zero chance” of it being granted a long-term licence.
“TfL is considering Uber’s application and no decision has been made,” says a TfL spokeswoman.
Uber has made changes to improve passenger safety, including more stringent driver and licence checks, more driving change and new accident and discrimination reporting systems. However, TfL is thought to want these checks to go further, with Wired suggesting biometric checks could be part of its licence requirements.