Can Gap Be Barbie-fied?

The world can’t seem to get enough of Barbie, and Gap Inc. is the latest company to chase its halo effect.

The American mall chain announced Wednesday it had tapped Barbie-maker Mattel’s chief operating officer Richard Dickson to be its new chief executive, concluding a year-long search for the right leader to revitalise its portfolio of ailing brands, including the namesake Gap, Old Navy and Banana Republic.

It’s a tall order for Dickson, who began his career at Bloomingdale’s and co-founded beauty e-commerce pioneer Gloss.com, which Estée Lauder acquired in 2000, the year Dickson joined Mattel for the first time. He would depart in 2010 to run the Nine West, and Anne Klein brands at Jones Apparel before returning to the toy maker in 2014. Dickson has been credited with helping orchestrate Mattel’s turnaround in recent years, lifting sales for the Barbie franchise to a 15-year high in 2021 of $1.7 billion, compared to just north of $1 billion in 2014.

Like Barbie, Gap has long struggled to remain relevant. Even recent bright spots in its stable, Old Navy and Athleta, have softened in recent years.

But the retailer is a far larger entity, posting $15.6 billion in sales last year compared with Mattel’s $2.2 billion, and its challenges are arguably more troublesome. A number of turnaround strategies had failed under Gap Inc.’s two previous chiefs, Sonia Syngal and Art Peck. The botched collaboration with Yeezy only exacerbated Gap’s existential crisis decades in the making: What exactly does Gap stand for, and how can Gap compete with the myriad new brands and retail models that emerged in the age of e-commerce?

Without clear answers, Gap sales have relentlessly fallen, from $7.3 billion in 2003 to $3.8 billion in 2022.

Dickson’s appointment was welcome news for shareholders Wednesday. Gap Inc. stock was up 8 percent following the announcement. Analysts and industry observers say Dickson has just the right experience — and track record — to take on the gargantuan task of reinventing Gap and the company’s other brands, following the same playbook that proved effective for Mattel. Gap is an American icon, after all, with valuable intellectual property that can be monetised in a number of different ways, just as Barbie was leading up to the smashing box office debut of “Barbie,” the movie.

“Here is a multi-level executive who developed and launched the Mattel playbook, a brand-building playbook that was instrumental to growing the company, where all their brands are organised in the same way and have clear, distinct visions,” said retail consultant Jane Hali. “All that he’s done for Barbie and Mattel can be transferred to another product, another brand.”

Dickson is a promising hire, but his success at Gap is hardly guaranteed. Leaders at the company have been trying to turn the business around for the last 20 years with little avail. Gap Inc.’s market capitalisation has shrivelled to less than $4 billion — a quarter of its annual revenue.

The Mattel Playbook at Gap

As Dickson settles in at Gap — his appointment is effective Aug. 22 — the big question will be what the Mattel strategy of product innovation and strategic collaborations will look like for clothing brands instead of toys.

Dickson, alongside Mattel CEO Ynon Kreiz, implemented a four-pillar strategy called the Mattel Playbook, emphasising brand purpose, product innovation, cultural relevance and operational excellence.

To understand Barbie’s brand purpose, Mattel conducted intensive customer research, finding that the doll no longer resonated with children and their parents today. To change that, Dickson helped launch new Barbie body types as well as ethnicities. On Mattel’s e-commerce site, customers can now find a Barbie with down syndrome or a Ken with a prosthetic leg. The dolls have more than 20 skin tones, nearly 100 hair colours and nine different body types.

With a more socially conscious line of dolls, Mattel then embarked on partnerships and collaborations that would create cultural buzz around the new products. Kreiz launched a movie division, tapping producer Robbie Brenner to salvage the Barbie film from so-called “development hell.” Warner Brothers signed on the project in 2019, Greta Gerwig joined in 2021 as director, and the rest was history.

Dickson, in fact, said he looked to the fashion business as a parallel for revamping Barbie.

“We run [Mattel] very much like a fashion company,” he told BoF in an interview earlier this month. “The first and most important aspect is to build a connection with consumers. Those fundamentals from fashion, applied to toys, is one of the ingredients that has made Mattel … so culturally relevant and unique.”

Certainly, a Gap-branded movie studio doesn’t make sense. But refreshing its merchandise will be essential in breathing new life into Gap.

“At the core Gap brand, products are the problem,” said Neil Saunders, GlobalData’s retail managing director. “They’ve not changed for years, they’re not innovative, they’re far too basic and not fashion-oriented enough, and [Dickson] will address all of those problems.”

But unlike toys, fashion is far more seasonal. A product overhaul will require consistent long-term attention to detail, according to Janet Kloppenburg, retail analyst at JJK Research Associates. “Making a new Hot Wheels toy means changing the colours. Apparel is difficult,” she said. “You’ve got to evolve from season to season, and stay in front of the customer in terms of fashion direction.”

Another key component to Barbie’s success was the multitude of brand collaborations and partnerships that Mattel inked in the past year, including Barbie-themed collections with Balmain, Zara, Burger King and Gap.

These activations don’t just spread brand awareness, Dickson said. They invite various tastemakers to interpret the Barbie brand, contributing to new cultural conversations around it. The louder the conversations, the more consumers want to join too. The Barbie craze has set off a wave of pink-themed birthday and bachelorette parties.

“We really think collaborations are a great mechanism to put our brand in the culture conversation and amplify our brand voice,” Dickson told BoF.

Of course, Gap hasn’t had the best experience with collaborations in recent memory. In September, it terminated what was supposed to be a 10-year partnership with Ye, a move on which the company pegged its entire revival. Even before trouble was brewing with the rapper formerly known as Kanye West, the rollout of Yeezy Gap pieces was stalled and inconsistent, and failed to have any sort of effect on mainline products.

Under Dickson, Gap will have to strike a balance between meaningful collaborations that are consistent with its core collection and a strong merchandising strategy overall.

Dickson’s Tailwinds

Beyond strategy, Dickson will have to prove he is a fit with the Fisher family that founded Gap and remains its largest shareholder. Since Donald and Doris Fisher established Gap in 1969, the Fishers continue to have an outsize influence on the company — which has been speculated as a point of friction with some members of Gap’s management team, past and present.

“Leaders at Gap have been frustrated about the interventions that the family has made,” said Saunders. “Gap is very centralised. It’s an internal-looking business that is traditionally quite resistant to change. It’ll be difficult to change Gap, and that is my biggest fear for Dickson.”

But Dickson has been on Gap Inc.’s board since last November. He has worked with interim CEO and chairman Bob Martin and witnessed the job cuts and corporate restructuring that Martin took on earlier this year. In many ways, his role on the board could have been the successful trial run before Dickson took on the top role.

Ultimately, replicating the Barbie phenomenon at Gap will be a difficult, if not near-impossible, endeavour. But Gap, with its memorable denim campaigns of the 1990s and colourful logo hoodies in the aughts, has plenty of IP gold for Dickson to leverage. His ambition and proven success with Barbie is a promising shakeup for which the retailer has desperately needed.

“Cultural relevance isn’t a goal; it’s a pursuit,” Dickson said. “Culture changes so quickly, and consumers today are expecting influential brands to be there, representing authentic values, and ideals. And I believe while Barbie is a celebrated moment that we’re all enjoying, it is arguably a case study for all brands.”

Additional reporting by Tamison O’Connor