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Bottom's Not Up - Yet: Why Gap Should Stay the Course on Premium Jeans

When sartorial strategies are at stake, management would do well to continually remind itself what their company stands for. Especially when an initiative isn't an immediately sell out, it's probably a good idea to continue building, at least for a few seasons. So it's only proper that Gap's (GPS) Patrick Robinson is continuing his push into 1969 Premium Denim despite incremental sales gains.

When 1969 jeans hit the stores last fall, they not only signaled the revival of a core product for Gap, but also its management's investment in hybrid customer engagement and sales. The Stylemixer iPhone app, the interactive Facebook gallery, the in-store parties and special promotions, and the slew of celebrities sliding their toned buns into Gap's true blues -- all cost a pretty penny.

But Gap's still investing. The company's taking a seat smack in the middle of the denim industry in downtown LA. The new office is modest in size (5,400 square feet) but big on function, housing everything from design, merchandising, tech services, wash development, and production. Gap's banking on the fact that this one-stop shop will be able to turn out trends tout de suite -- not exactly Forever 21 fast -- but more than it's been able to in the past.

Then there's the new Web site at Gap1969.com featuring more celebrities, more stylists and more links to indie insiders including everyone's fave fashion boy blogger, The Sartorialist.

Gap's also hyping its upcoming documentary, Blue Gold: The Story of American Jeans. For release in 2011, it's going to be a splashy affair chock full of musicians, designers, historians and the like, waxing poetic on the "power and spirit of jeans in America." While the gravitas of documentary is certainly a solid way to establish a brand as the undisputed authority on an iconic wardrobe staple (maybe even to, ahem, unseat Levi's) it may not ultimately pack too much sales oomph.

That said, time is on team Gap's side. Though the pay-off has been merely middling thus far, Robinson and company need to stay the course. The company's net sales for June and July were up two and three percent respectively. Even though Gap North America's comps were down 4 percent in the second quarter, it's still better than the 10 percent loss for the same period in 2009.

Back in March, I suggested Kenneth Cole (KCP) stick to its plan as well, and the company's second quarter revenues climbed 15 percent, beating Wall Street estimates. As fashion turns ever faster, sometimes it pays to be slow and steady.

Images via GAP

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