In the annals of corporate euphemisms for horrific results, Gap Inc (GPS) just came out with one of our all-time favorites.
In announcing that its Banana Republic division suffered a 15% comparable sales decline last month, its fourth double-digit dip in a row, a corporate spokesman on a recorded call said Banana’s performance has been pressured by “product acceptance challenges.”
No kidding. Customers have been “accepting” Banana Republic’s products less and less throughout the course of the year, as this chart of its monthly sales makes clear.
Like its sister brand Gap, Banana Republic has been trying to change its manufacturing model to speed up the time it takes to get from concept to store shelf, emulating the tremendous success Gap Inc’s biggest brand, Old Navy, has had.
This spring, management made clear that it understood Banana’s fashion problems. Brand president Andi Owen told investors in June that Banana had made too large a bet on crop tops and also did not offer enough color or prints, among other misfires.
But then last month, Gap Inc announced that former J. Crew star designer Marissa Webb, who had been given the mandate to revive Banana Republic, was out as the brand’s creative director after just 18 months. (She will continue to advise the brand.)
Not long ago, Gap Inc CEO Art Peck had said he saw a “significant opportunity” for Banana in the second half of the year and next year to improve the business. But after a 12% comparable sales drop in the third quarter, it’s not clear that “product acceptance” by customers can improve fast enough for that.