Gap's Fashion Makeover

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It's no secret that Gap (NYSE: GPS) has had designs on shoppers for quite some time. This week, we learned that Gap is attempting to give itself a jumpstart with the hiring of a new designer. Will Gap get its fashion sense back?

Gap is hiring Charlotte Neuville, who hails from New York & Co. (NYSE: NWY), a shop for moderately priced women's apparel. Neuville is replacing Pina Ferlisi, who was hired in March 2003. At that time, Ferlisi was seen as a boon because she came from a niche, upscale clothing brand, Theory, and it seemed promising that she could add some fashion flair to the retailer.

Here at the Fool, a lot of folks pay close attention to Gap, which is a Motley Fool Stock Advisor pick. (New York and Co., on the other hand, is a Motley Fool Hidden Gems selection.) Gap's biggest claim to fame these days, of course, is its improved balance sheet, a financial element that investors surely appreciate.

On the other hand, Gap's problems with a turnaround in sales have been well-known, and the road has been fraught with things that might make some investors wonder. (I personally expressed some disappointment with Gap's closed-door policy as it revamped its Web storefront not too long ago.) Meanwhile, investor sentiment for retailers has been pretty lackluster, anyway, with even traditionally strong performers like Chico's (NYSE: CHS) and Urban Outfitters (Nasdaq: URBN) given the cold shoulder.

Certainly, a new designer could very well be just what Gap needs to get its fashion back in focus. On the other hand, I can't help but think that today's announcement has a tinge of déjà vu, hearkening to the beginning of Ferlisi's tenure, when she, in fact, was seen as the one to save Gap's image. (Plus, I can't help but wonder whether a designer coming from New York & Co. will bring the pizzazz that Gap most surely needs.)

Investors surely hope that Neuville can get Gap back in action, but her impact on the brand probably won't be felt until the Fall 2006 fashion lineup. Therefore, investors may have a while to wait before they see whether a new designer will bring magic -- or just more of the same.

For more on Gap and retail, see the following articles:

• Profit from panic, the retail way.
• Gap may be sluggish, but does it have a silver lining?
• Here are more ways Gap goes for growth.

Gap is a Motley Fool Stock Advisor pick. New York & Co. is a Motley Fool Hidden Gems recommendation. Find out which of our suite of newsletters is right for you.

Alyce Lomax does not own shares of any of the companies mentioned.