Business Wars – Gap’s Revival | Faded Khakis | Episode 1

Date: November 5, 2025
Host: David Brown (Wondery)

Episode Overview

The season premiere of Business Wars’ new series, "Gap’s Revival," explores the dramatic highs and lows of The Gap, once the go-to American fashion brand for casual basics and a Wall Street darling. This episode, “Faded Khakis,” investigates Gap's attempts to reclaim its cultural relevance and profitability in a rapidly changing retail world — from devastating fires and failed rebrands to high-stakes celebrity partnerships, including the tumultuous, headline-making deal with Kanye West (Ye). Listeners get a behind-the-scenes account of Gap’s struggles, missed innovations, and whether a fading icon can reinvent itself for a new era.

Key Discussion Points & Insights

1. The Kanye West (Ye) Partnership and Breakup

[00:09–09:00]

• Scene Setting: September 2022, Gap is in crisis. Ye appears on CNBC live from what looks like a shipping container, criticizing Gap’s leadership and design copying.
  • Notable moment: Ye, hidden behind his trademark mirrored sunglasses, calls out Gap for ignoring his input:

    “Sometimes I would talk to the guys, the heads up, the leaders, and it would just be like I was on mute or something.” — Ye, [02:07]

  • He laments the lack of creative control, declaring:

    “You know, I’m the leader, I’m the king, right? So a king can’t live in someone else’s castle. A king has to make his own castle.” — Ye, [03:13]

• Result: Ye publicly announces the end of his Gap partnership, calling it “the day of liberation.” It's a PR disaster for Gap.
  • Host’s interpretation:

    “Otherwise, you’re not hiring a savior, you’re renting drama.” — David Brown, [05:14]

2. Gap’s Cultural and Financial Decline

[09:05–21:00]

• Cultural Peak vs. Decline: Host asks listeners, "When was the last time you fell into the Gap?" The brand's 1990s glory days contrasted with a steady decline in relevance and sales.
• Competition: Fast fashion upstarts like Zara and H&M outpaced Gap on style, price, and speed, leaving it saddled with slow-moving inventory and outdated business models.
• Identity Crisis: Gap brand is sandwiched between price points and brand identities (not as affordable as Old Navy, nor as trendy as Zara).

  “Is it a slightly more expensive Old Navy? A slightly less expensive Banana Republic? A somewhat less hip Zara? A somewhat hipper Target?” — David Brown, [19:45]

3. The 2016 Fishkill Distribution Center Fire

[21:00–26:00]

• Incident: A catastrophic fire destroys Gap’s largest U.S. distribution center, compounding existing woes.
• Inventory Headaches: The disaster is so severe, one analyst calls it “a fortuitous reduction in inventory.”
• Host Commentary:

  “A devastating fire is good news. Yeah, that’s how bad things have gotten at the Gap.” — David Brown, [25:45]

4. Data Over Design – Art Peck and the Loss of Gut Instinct

[26:00–31:30]

• Leadership Shift: When Art Peck becomes CEO (2015), he ousts creative directors, betting on analytics and data-driven decisions over fashion instinct.
• Flaw in Philosophy:

  “But no spreadsheet ever invented the miniskirt or the Air Jordan … If you wait for the numbers to bless innovation, you’ll always be three steps behind the team taking chances.” — David Brown, [29:00]

• Result: Sales and stock prices drop further; Gap becomes reactive and uninspired.

5. The Attempted Old Navy Spin-off

[31:30–37:00]

• Announcement: Peck’s 2019 plan to spin Old Navy into a separate company (Newco) temporarily excites Wall Street, but underlying problems persist.
• Stock Snapback: Despite a brief 16% stock jump, continued weak sales lead to Peck’s abrupt resignation and the plan’s collapse.

  “Gap is now on the clearance rack.” — David Brown, [36:51]

6. Iconic Rise: From San Francisco Counterculture to Mainstream Cool

[37:00–46:00]

• Gap’s Origin Story: Founded in 1969 by Donald and Doris Fisher, the first Gap store was about more than clothes — it was identity for a new generation.
• 90s Ubiquity:
  • Celeb endorsements (Spike Lee, Madonna), innovative ads (swing-dancing khaki spots), and even Oscar red carpet moments (Sharon Stone in a $26 turtleneck).
  • Pop culture moments: SNL’s “Gap Girls” sketches, Vogue spreads, Seinfeld finale ad spots, etc.
• Comedic Dig:

  “Cal, be better than the Gap. Be better than the Gap. Say it. I’m better than the Gap.” — Crazy Stupid Love, quoted [44:30]

7. Market Shifts and CEO Warnings

[46:00–54:00]

• Fast Fashion’s Impact: Zara, H&M, and Uniqlo not only match Gap’s price points but deliver new trends at breakneck speeds.
• Drexler’s Advice to Ye: Ex-CEO Mickey Drexler warns Kanye against signing with Gap (“It’s a bad cultural fit for you.”), but Ye persists, wanting to realize his “Steve Jobs of the Gap” vision.

8. Old Navy’s “BODEQUALITY” Gamble

[54:00–59:00]

• Inclusive Sizing Launch (2021): Old Navy debuts all sizes (0–28) at the same price, removing the plus-size section and retooling manufacturing for inclusivity.
  • Customer Feedback: “Wow, this is actually so cool to be able to look through the entire section ... I feel like an actual wanted customer.” — Old Navy shopper, [58:40]
• Profitability Problems: Extended sizing creates inventory headaches and hits margins, showing the limits of one-size-fits-all in both garments and business.

9. Yeezy Gap: Hype Meets Corporate Friction

[59:00–1:11:00]

• Product Launches: The $200 Yeezy “Round Jacket” and the “Perfect Hoodie” (which breaks Gap’s single-day sales record).
• Demographic Win: 70% of hoodie buyers are new to Gap. But...
• Internal Tension: Design and production delays, finger-pointing, culture clashes between Ye’s high-fashion team and Gap’s retail ops.
• Host Analysis:

  “Zara moves like a tech company that happens to make clothes ... Legacy brands like Gap want tidy seasons and massive volumes. But in a world where TikTok can kill a trend in six days, neatness is a liability. Agility beats precision every time.” — David Brown, [24:10]

10. The Balenciaga Collaboration and Store Stunt

[1:11:00–1:19:00]

• July 2022: Flagship Gap store in Times Square transforms into a monochrome, post-apocalyptic space for the Yeezy Gap/Balenciaga launch.
  • Memorable Moment: Clothing is piled in gigantic trash bags, requiring shoppers to “dig for their gear.” It’s “performance art with a cash register.”
• Controversy: The stunt, criticized as insensitive to homelessness, sparks debate; Ye stands firm:

  “This is like, not a joke. This is not a game. This is not just some celebrity collaboration. This is my life. You know, I’m fighting for a position to be able to change clothing and bring the best design to the people.” — Ye, [1:18:10]

11. Collapse and Uncertain Future

[1:19:00–End]

• Breakup Fallout: Gap ends its relationship with Ye following his controversial statements; the brand is left adrift.
• Leadership Turnover: Another “savior” CEO (from Mattel, who revived Barbie) steps in, with the company’s fate again in question.
• Big Question:

  “Can Gap Inc. truly reinvent itself as a culturally relevant and profitable fashion house ... or will it fall back into the Gap, riding its own nostalgia into irrelevance?” — David Brown, [20:30 and 1:20:10]

Notable Quotes & Memorable Moments

• Ye on his failed partnership:

  "Well, don’t bring a leader in and have them not lead. ... I’m not going to argue with people that are broker than me about money." — Ye, [04:40]

• On celebrity partnerships:

  "Partnerships work best when both sides want the same future and agree on who’s in charge. Otherwise, you’re not hiring a savior. You’re renting drama." — David Brown, [05:16]

• On Gap's identity crisis:

  "Their identity seems lost out there in the fog over the San Francisco Bay." — David Brown, [19:53]

• On fast fashion vs. legacy retail:

  "In a world where TikTok can kill a trend in six days, neatness is a liability. Agility beats precision every time." — David Brown, [24:17]

Timestamps for Key Segments

• 00:09 — Kanye West trashes Gap CEO and ends partnership live on CNBC
• 09:05 — Gap’s downfall from ‘90s dominance to early 2000s stagnation
• 21:00 — The 2016 warehouse fire and mounting inventory woes
• 26:00 — Art Peck’s data-driven leadership and creative stagnation
• 31:30 — The failed Old Navy spin-off: announcement and fallout
• 37:00 — Gap’s cultural impact: ads, supermodels, and SNL
• 46:00 — Fast fashion’s disruption and Drexler’s advice to Ye
• 54:00 — Old Navy’s inclusive sizing revolution and challenges
• 59:00 — Yeezy Gap’s launches, fanfare, and internal clashes
• 1:11:00 — Trash bag stunt at Yeezy Gap/Balenciaga Times Square launch
• 1:19:00 — Collapse of the Ye partnership and leadership overhaul

Conclusion

Tone and Final Thoughts:
Blending nostalgia, vivid storytelling, and sharp business insight, this episode unflinchingly charts Gap’s descent from fashion kingpin to struggling mall tenant — and raises the stakes for its would-be revival. By centering on larger-than-life personalities from Mickey Drexler to Kanye West, the show examines the perils of desperate reinvention in a market where cool and agility are in short supply at legacy players. It lays the groundwork for a season that asks: Is redemption possible, or is The Gap destined to fade further into irrelevance?

End of Summary