Gap Makes Itself a Laughingstock

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Years of competing with younger, hipper retail rivals have left Gap (NYSE: GPS  ) suffering from a seriously tarnished image. A recent uproar over its new logo -- now its quickly retired new logo -- provides the latest case study in how not to reinvigorate a flagging brand.

Last week, the venerable retailer's launch of a bland, simplistic new logo triggered an Internet swarm of acidic mockery. As the folks at Brandchannel said, "Yes, after dominating the late 1990s and early 2000s, Gap has dropped its iconic logo in favor of something that looks like it cost $17 from an old Microsoft Word clipart gallery." Ouch.

Worse, Twitter parody accounts (like the ones that plagued BP (NYSE: BP  ) after its disastrous Gulf spill) cropped up to further lampoon Gap's new logo. The old adage that "all publicity is good publicity" probably doesn't apply when you're struggling to get your brand back on track.

Gap has now pulled its new logo and reinstated the old one. It's not the first major consumer-facing company to backtrack on a decision after an Internet-fueled backlash. Starbucks (Nasdaq: SBUX  ) recently reversed course after a similar ruckus over its drive-through menus.

Brand is an essential asset that investors shouldn't ignore. According to Interbrand's recent data, the strongest five global brands are currently Coca-Cola (NYSE: KO  ) , IBM, Microsoft, Google, and General Electric. (Gap rates 84th on Interbrand's list.)

Even these leaders can't be too cavalier about changes that impact their brand image. Remember the "New Coke" fiasco more than 20 years ago? Snafus like these have a habit of lingering in consumers' minds.

Folks suddenly remembered their passion for Coca-Cola's original formula when Coke tried to change into something new. I doubt Gap will be so fortunate with this "new-and-unimproved" branding blunder; it probably simply reminds customers that Gap has not only lost its former hot status, but has also its direction in general.

What do you think of the uproar? Do you think Gap's new logo was a brand-busting design atrocity, merely shrug-inducing, or actually kinda cool? Let us know in the comment box below.

Google, Coca-Cola, and Microsoft are Motley Fool Inside Value picks. Google is a Motley Fool Rule Breakers choice. Starbucks is a Motley Fool Stock Advisor selection. Coca-Cola is a Motley Fool Income Investor recommendation. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Coca-Cola, Google, International Business Machines, and Microsoft. Try any of our Foolish newsletter services free for 30 days.

Alyce Lomax owns shares of Starbucks. The Fool has a disclosure policy. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Read/Post Comments (3) | Recommend This Article (9)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 12, 2010, at 5:27 PM, caltex1nomad wrote:

    I think the NEW LOGO was a Marketing Scheme. They had to get people talking about them somehow, why not this ? When was the last time the web was abuzz with GAP news ?

  • Report this Comment On October 13, 2010, at 10:51 AM, Brent2223 wrote:

    I think companies need to get a backbone and stop caving into the fear of negative comments in the twitterverse. I'm sure the experts they hired know a little bit more about marketing than the yahoo's on twitter so give it a chance at least!

  • Report this Comment On October 13, 2010, at 1:39 PM, mikecart1 wrote:

    caltex1nomad is correct. Gap is a genius at what they did. If you guys would use your head for once and analyze the new logo, you'd see it was a joke. It looked like something that was developed with Microsoft Paint and a couple of hrs in a meeting room. "What is a cheap way to get free advertising, that requires little effort, and will put Gap back on the map". Oh that's right!

    1. Create lousy logo and pretend it is real

    2. Make it seem official

    3. Wait til facebook and twitter get mad

    4. Replace old logo

    5. Profit

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