When the Music's Over ...

Gap announced recently that their same-store sales have declined for the 12th consecutive quarter, a stunning run of -- well, is it bad luck, bad merchandising, bad choices, or what?

(Despite the decline the company does continue to make a profit, but same-store sales declines bode ill for the future.)

As a part of its ongoing effort to turn things around, the company recently hired a new CEO, Glenn Murphy, who comes not from the fashion industry, but retail.

What would you do if you were Murphy?

Well, one of the first things I would look into the possibility that the Gap's problem isn't fashion, it's demographics. Like Levi's, another struggling brand, the Gap's roots are in the sixties. Founded in 1969, the company hit its stride in the 70's and 80's carrying the image of rebellion for a generation of young people.

But those people are now too old to care about the brand, and younger customers have made other choices. Rebellion is not what it used to be.

It's not the first time this has happened - actually, it happens all the time. Sears, for example, dominated American middle-market retail until it lost contact with its customers, and Wal-Mart stepped in.

And remember Oldsmobile? GM laid this brand to rest in 2004 after 107 years, but it wasn't all down hill. In fact, the Olds Cutlass was America's #1 selling car in 1976. So somehow between a rousing success '76 and the decision to shut the brand down in 2000, the company completely lost its way. Or perhaps it merely followed its target customer demographic right into the grave.

Now it seems that unless something significant changes, the Gap is doing the same thing. Can Murphy can lead a process of innovation that will create the clothes attractive to a new generation of customers? Or is it just a matter of time until the music's over?