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Gap jeans go premium in move to fill style gap

(Agencies)
Updated: 2009-08-19 17:43

HIGH STAKES

Gap's casual, relaxed styles were adequately represented, but there was a gaping hole in the assortment: premium, upscale denim that Robinson calls "high-stakes" jeans.

A surge of premium brands from True Religion Apparel Inc to Rock & Republic -- whose jeans cost over $100 but purportedly offer more sophisticated styling and fits -- has cut into sales at a host of former denim stalwarts.

Style Our New Jeans from Gap

Levi Strauss, whose jeans were carried at Gap stores in the 1970s and 1980s before the retailer began selling only Gap label merchandise in 1992, also has been upgrading its denim to positive consumer response in the past two years.

And a host of teen retailers have made denim a key part of their lines. Jeans at American Eagle Outfitters Inc and Aeropostale Inc can sell for as low as $25, while Abercrombie & Fitch Co price them at $69.90 and up.

Brean Murray Carret analyst Eric Beder called denim the "weapon of war" among teen retailers in a recent note.

Needham & Co analyst Christine Chen said women who won't shell out $200 for jeans but are looking for "age-appropriate" fits could make the denim launch at Gap -- whose target customer is ages 25 to 35 -- a success.

"They've (Gap) had a hard time with their denim even though historically they were a denim destination," said Chen. "It's been a missed opportunity for them and they've had to compete with so many new entrants."

Designer Robinson strove for premium fits, but without the high price tag: "What learning could we take from the premium market? I didn't want to create a $125 jean. I think that's obnoxious. I wanted to make it Gap."

Robinson assembled a production team and brought in senior factory workers to be trained on new sewing techniques to make better-fitting jeans. He would not elaborate.

Gap, which posts second-quarter results on August 20, has seen a recent sales uptick at its Old Navy chain, whose lower-cost clothing appeals to families. However, thrifty consumers have shied away from higher prices at Banana Republic, and same-store sales at Gap stores have fallen every month this year.

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