BULKY DOCUMENTS
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`Proceeding] Serial No: 9 I V I Qxg (/3
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`How Gap Keeps Rivals at Bay Ability to change inventory quickly is key The San Francisco
`Chronicle NOVEMBER 12, 1990, MONDAY, FINAL EDITION
`
`Copyright 1990 The Chronicle Publishing Co.
`The San Francisco Chronicle
`
`6 View Related Topics
`
`NOVEMBER 12, 1990, MONDAY, FINAL EDITION
`
`SECTION: BUSINESS; Pg. C1
`
`LENGTH: 2113 words
`
`HEADLINE: How Gap Keeps Rivals at Bay
`Ability to change inventory quickly is key
`
`BYLINE: BEATRICE MOTAMEDI, Chronicle Staff Writer
`
`BODY:
`Donald Fisher sat in his office on a recent afternoon, mulling the latest bad news to hit an
`already troubled retail industry.
`But it wasn't the companyhe heads -— The Gap Inc. -- that was commanding his attention. It
`was a textile import freeze and troubled talks under the General Agreement on Tariffs and
`Trade.
`
`Suddenly, Fisher's voice trailed off. "But we're here about The Gap," he acknowledged, with
`a smile. "Not the GATT."
`
`Fisher's global worries are a sign of The Gap's unique position in the retail trade these days.
`With giants such as R.H. Macy & Co. and Saks Fifth Avenue selling assets and firing workers,
`tracking what bureaucrats are doing on the other side of the world is a luxury few in this
`beleaguered business can afford.
`
`At the same time, Fisher's concerns point to the complex mix of U.S. real estate, Asian
`factories and global markets that underlies The Gap's surprising transformation over the past
`several years from an industry weakling into a $ 2 billion-a-year apparel giant.
`A strategy of snapping up good retail real estate, sticking to its business and sewing up.
`clothes that span the market from infants to adults has enabled The Gap to keep most -- if
`not all —- of its competition at bay.
`
`Fashion analyst Alan Millstein calls The Gap "the Oakland A's of retailing."
`
`"They have outrun, outstripped and out-hit all of the competition," says Millstein, editor of
`Fashion Network Report, a New York—based newsletter.
`
`"They have built a mystique with the 15- to 34-year-old that no other retailer has in this
`ll
`
`GAP 003787
`
`

`
`Much of that is the result of some heavy housecleaning, begun in 1983 with the arrival of
`Millard (Mickey) Drexler as The Gap's president.
`
`Drexler, a former Macy's buyer and president of Ann Taylor, abandoned promotional pricing,
`liquidated huge inventories, cut out most of the dozen brands on sale and began updating
`decor. He also introduced a few new words to the Gap vocabulary.
`
`"At that point, The Gap was a commodity-driven, price-oriented business, built on jeans that
`were usually on sale," said Drexler. ''Quality and taste and style were not a premium to
`'
`running the business."
`
`Another Gap advantage is the fact that the company is in charge of virtually every part of its
`own business, from the drawing table to distribution.
`
`With its own designers, its own label, its own stores, its own warehouses and more than 300
`suppliers from Hong Kong to Zimbabwe, it can take The Gap as little as six weeks to identify
`a hot new item and get it to market, compared to months for other retailers. The company
`generally introduces new collections six times a year, or at the nearly unrivaled rate of once
`every 8 weeks.
`
`"They turn their inventory so quickly that once they notice something that's doing well, they
`can duplicate it
`put it into stores in larger supply, and enhance their sales," said Thomas
`Tashjian, a retail analyst at Seidler Amdec in Los Angeles. "There are few other companies
`that are so positioned."
`
`Asked where The Gap is headed, Fisher -- The Gap's chairman and chief executive -- sounds
`almost cosmic.
`
`"Our major objective is to be the masters of our own fate, our own destiny," Fisher said.
`"The Gap has had a major transformation over the years. I think today we're in the best
`competitive position we've ever been in."
`
`LEADER OF THE PACK
`
`For now, The Gap appears at least to be well ahead of the pack.
`
`The company has seen 22 consecutive quarters of sales growth and eight straight quarters of
`growth in profits. Earnings for the second quarter ended August 4 rose 36 percent to $ 19.2
`million, with sales jumping 24 percent to $ 405 million. Third-quarter results are due
`Thursday.
`
`Despite the recent plunge in retail sales industrywide, Fisher says The Gap "won't have any
`trouble" meeting its sales goal of $ 2 billion in 1991.
`
`"We'll maybe be a hair under it this year," he said.
`
`Growth is being fueled by new stores -- 98 in 1989 and a projected 160 in 1990, bringing
`The Gap's total to about 1,100 locations by yearend. But business is also strong at stores
`open a year or more.
`
`Most retailers have been posting no change -- or worse, declines -- in same-store sales since
`January. Not so at The Gap. With the exception of May, the company saw double-digit
`increases until September, when consumer spending was torpedoed by the Iraq-Kuwait
`conflict. Even so, The Gap last week posted a robust 14 percent rise in same-store sales in
`October.
`
`GAP 003788
`
`

`
`LESS DEBT
`
`But perhaps the biggest difference between The Gap and most of its competitors is that it
`doesn't start the sales day burdened by debt.
`
`The Gap will take on up to $ 60 million in short-term borrowings this year and next to help
`finance its store-improvement program. The company also has long-term debt of $ 17.5
`million. The total is roughly one-tenth as much as Macy will pay in 1990 just to service its
`debt of $ 4.8 billion.
`-
`
`As the economy heads into a downturn, The Gap's balance sheet may be its biggest strategic
`advantage.
`
`"We are virtually debt—free," Fisher said. "If anything does happen in a recession, we are not
`in a position where the burden of debt is going to be a major impediment."
`
`Given The Gap's plans to add stores, Fisher said, a recession could even have a silver lining:
`Lower real-estate values will make it cheaper for the company to expand.
`
`"We're not concerned about the recession, or the recession potential on our company,
`because we're finding opportunities in real estate today that are substantially better than
`what we had before," said Fisher.
`
`EXPANSION PLANS
`
`Indeed, The Gap these days is as much about real estate as about retailing. The company's
`plans for each of the next five years include opening:
`
`* 50 to 60 Gap stores a year;
`
`* 35 to 50 GapKids stores;
`
`* 15 to 20 Banana Republic stores;
`
`* 15 to 25 Gap and GapKids stores in Canada and the United Kingdom.
`
`Rehabbing existing Gap stores would be enough to keep Fisher busy. Spurred in part by
`stronger-than-expected response to its children's clothing, The Gap is doubling the size of
`200 locations. It is also softening the safari-esque decor at Banana Republic, its high-end
`chain of 128 stores.
`
`Not surprisingly, capital expenditures have swelled, from $ 68 million in 1988 to $ 94 million
`in 1989. The Gap also is depending on new stores to generate new customers, a task that
`may be difficult in such places as Chicago, where the company plans to open a new store just
`blocks from an existing location on Michigan Avenue.
`
`Still, The Gap's fashion—on-every-corner strategy has already prompted some to call it the 7-
`Eleven of Style.
`
`"The secret in retailing is: location, location, location," said Millstein. The Gap, he adds, has
`"the best locations in every market and mall in the country."
`
`One piece of property The Gap doesn't have is a company campus, but that, too, may
`change. The Gap currently leases office space in San Francisco and San Bruno.
`
`GAP 003789
`
`

`
`"Certainly, over the next three to five years we'll need additional office space in the Bay
`Area," said Drexler. "We don't know where it will be, at this point."
`
`NEW RETAIL STYLE
`
`Real estate is only half of the retail equation. In the merchandise and marketing department,
`The Gap is reaping the benefits of a change in consumer attitudes toward fashion as well as
`the influence of Drexler, a fast—talking New Yorker who likes to wear jeans on the job but has
`a rigorous approach to retailing.
`
`Once known as a chain of cheap sweatshirt-and-jeans shops, The Gap has changed into a
`retailer with a "look" -- stylish, classy, even hip.
`
`The Gap's celebrity-packed Individuals of Style advertising campaign is a long way from the
`company's first splash in the retail business -- a 1969 pitch that offered "four tons of Levis"
`on sale.
`
`Indeed, Gap stores show a meticulous attention to detail. Window displays are crisp, colorful;
`clothing on racks and shelves is rarely rumpled or out of place; merchandise is marked down
`only to get it out of the store, the company says, not to lure customers in.
`
`A visitor to the company's Post Street store in San Francisco recently found two salespeople
`working in a back room, carefully steaming the wrinkles out of a shirt before placing it out for
`sale.
`
`Before Drexler, The Gap carried some 14 different brands of clothing; Drexler cut that to
`two: Levi Strauss and The Gap's own label.
`
`STICKING TO CORE BUSINESS
`
`Before Drexler, The Gap ran Pottery Barn, a housewares chain; two years after Drexler
`arrived, it was sold and Drexler now vetoes any venture that doesn't fit into the company's
`core business or even its color scheme.
`
`Earlier this year, Drexler experimented with a new line of women's underwear, but he killed it
`after deciding that the pink, black and white lingerie clashed with other Gap colors.
`
`"It didn't really go with the rest of the palette in the stores," he explained.
`
`A few months ago, Drexler and Fisher discussed getting into the bed linen business. But they
`nixed that idea, too.
`
`"Any business has to make a decision as to how much they take on at a particular point, and
`can they keep running their business well," Drexler said. Owning Pottery Barn, he said, was
`an example of being "unfocused."
`
`"Whatever we do, we want to do in a dominant way. We want it to look right in the store,"
`Drexler said. "Hopefully, when a customer sees a Gap store, they'll see a picture that's been
`very well painted: everything flows together."
`
`There's just one wrinkle: price.
`
`Once known simply for jeans and sweats, The Gap is heading into the upscale sportswear
`market, with items such as handmade sweaters, coats, hosiery and soft luggage. But along
`with a change in image has come a change in price.
`
`GAP 003790
`
`

`
`Drexler is surprised at the mention of a cotton turtleneck selling for at a local Gap store. "It
`sounds expensive for us," he said, quickly adding that for consumers, "I don't think price is
`the driving factor."
`
`Even so, The Gap could solve any problems by putting items on sale. But unlike other
`retailers, it disdains promotional pricing, preferring to rely on a computerized point—of-sale
`system that identifies each store's sales each day and orders more merchandise from
`warehouses in Kentucky, California and Canada. "1 don't believe that there's another retailer
`of any size
`that actually warehouses and backstocks its merchandise," Fisher said.
`
`"We're not taking some of the markdowns that other people are taking," he added.
`
`In a recession, that may be difficult to avoid. Like other retailers, The Gap has already had to
`resort to big sales to move merchandise prior to the crucial Christmas season. Widespread
`fear that retailers will see even lower profits in coming months has depressed the value of
`most retailing stocks, although The Gap, which is selling for 27 after a two-for—one stock split
`in August, is doing better than most.
`
`Industry analyst Janet Kloppenburg says The Gap is in a "tough situation."
`
`"Do their competitors start price-discounting, which could force Gap sales to slow? Or does
`Gap have to turn around and discount their stuff as well?" she asked.
`
`Drexler prefers to focus on coming up with better and-better design, believing The Gap's
`future is already in its hands.
`
`"If we keep doing what we do better, why can't we in fact grow pieces of our business in a
`dramatic way?" Drexler asked. "Why can't we own more of a market share in, say, active
`wear, or jeans wear, or accessories?"
`
`"The days of easy growth for any of our businesses are obviously over," he added. "At the
`end of the day, the thing that we all try to do best is please the customer. The ones that
`please them the most, win."
`CHART:
`
`THE GAP INC.
`
`AT A GLANCE
`
`Business: Apparel retailer, with 1,070 stores nationwide. Its four
`lines of business include: Gap (adult sportswear), Baby-
`
`Gap (infant and
`
`toddler wear), GapKids (children's clothing) and Banana Republic (specialty
`apparel for men and women).
`
`Headquarters:
`
`San Francisco
`
`Employees:
`CEO:
`
`23,000
`Donald G. Fisher
`
`President:
`
`Millard S. Drexler
`
`Yesterday's
`
`stock price:
`
`27, up
`
`52-week hi.gh—low:
`Operating Results
`
`(In millions)
`Revenues
`
`35-22
`
`Net Income
`
`1990 (X)
`
`$807.4
`
`1989
`
`1,586.6
`
`$40.3
`
`97.6
`
`GAP 003791
`
`

`
`J
`
`\$"l'l
`
`'
`
`\‘
`
`1988
`
`1987
`
`1986
`
`1,252.1
`
`1,062
`
`848
`
`74.2
`
`69.6
`
`68.1
`
`(x) First—half results only
`
`GRAPHIC: PHOTO(2), CHART,(1) Marissa Heresco, The Gap merchandise coordinator,
`shelved clothes from the spring 1991 line, (2) The Gap President Mickey Drexler (left) and
`Chairman Donald Fisher , PHOTOS BY ERIC LUSE, THE CHRONICLE
`
`GAP 003792
`
`

`
`Gap (Apparel), LLC v. Gap One Enterprises, LLC
`Opposition No. 91172505
`Serial No. 78683999
`
`OPPOSER’S NOTICE OF RELIANCE NO. 3 UNDER 37 CFR § 2.122(e)
`
`Exhibit 20
`
`

`
`IU.S. WINNERS IN JAPAN o IAco_CcA SPEAKS at COMPUTER wARs IN THE 1990s V
`
`FEBRUARY 12, 1990
`
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`GAP 004456
`
`

`
`

`
`SELLING
`
`en the Gap a claustrophobic feel.
`In their place Drexler installed
`white modular shelves that dis-
`play neatly folded merchandise.
`More important, he had a Gap la-
`bel sewn into virtually every gar-
`ment to raise the name to the
`dignity of a brand in customers’
`consciousness.
`(Levi Strauss &
`Co. clothing is
`the only other
`brand sold in a Gap store; last
`year it accounted for about 5% of
`sales.) The recognition of the
`Gap name is such that it has even
`been granted generic status by
`the fashion press. Magazines now
`write about “a good jacket that
`looks great with a Gap T-shirt.”
`
`
`
`CEO Fisher: “My dream of this company is exactly what it is today.”
`
`way it has. I do know you can’t
`run a business without
`taking
`risks.” Plans call for up to 50
`GapKids to open in 1990. For the
`fiscal year ending in February,
`the division is expected to have
`sales of about $85 million, an
`80% increase over 1988. Joining
`GapKids at the end_ of January
`will be a new line for infants and
`toddlers called—you guessed
`it—-babyGap. (Fisher wanted
`Gapbaby but went along with
`Drexler, who thought babyGap
`sounded cuter.) The babyGap
`clothes will be made from the
`same soft cotton fabric used for
`adult clothing.
`Fisher believes the magic of the Gap
`name will work abroad as well. The 16 Gap
`stores in Great Britain generate an average
`sales volume greater than the $1.7 million
`average for a U.S. store. During 1990 the
`company plans to open between 15 and 25
`more Gap stores overseas and is looking to
`expand further into Canada, where it has six
`stores.
`
`(Gap brand), a shirt and tie, tweed jacket,
`T TAKES MORE than a well-made
`and suede loafers, he throws questions at
`garment to get people talking about
`Gap salespeople the way Nolan Ryan throws
`cotton T—shirts that way. It also takes
`baseballs: very fast. “How’s this selling?”
`clever advertising, which is precisely
`he’ll ask. “Why is this sale sign here? What
`what the Gap’s in-house ad department cre-
`are you using to clean the floors?” Walking
`ated in 1988 with its “Individuals of style”
`to get his car from a parking garage after
`campaign. The ads, all shot in black and
`visiting a store, he yells out to the attendant,
`white, feature celebrities and lesser-known
`“Hey, Frankie, how’s it going?” Even after
`artists, singers, and actors wearing their fa-
`six years of West Coast
`living, Drexler
`vorite piece of Gap clothing. Full-page mag-
`makes the question sound more New York
`azine ads have ranged from actress Kim
`City than California.
`Basinger in a white T-shirt and pearls to
`Fisher, by contrast, is quiet and elegant.
`jazz great Dizzy Gillespie wearing a black
`Though he started the Gap nearly 20 years
`turtleneck. “We get hundreds of letters from
`ago and owns, along with his family——two of
`people who think they would be perfect for
`his three sons, Bob, 35, and Bill, 32, work
`the ads,” says Drexler. “It’s a real kick.”
`for the company—42% of the stock (worth
`The company had 550 stores when Drex-
`$762 million), his personal style doesn’t
`ler joined. There are now 965, including‘ 111
`mimic that of his company. Most days he
`Banana Republics and 109 GapKids. Gross
`wears a dark suit. He comes from a long line
`sales per square foot—an important mea-
`of San Franciscans, and he and his wife, Do-
`sure of success—for'all Gap-owned stores
`ris, are active in the city’s cultural life. An
`rank among the highest in the
`avid collector of contemporary
`industry. As Goldman Sachs’s
`art, he has decorated the Gap’s
`Ellis recently noted, “The
`ohfing
`new headquarters with his per-
`Gap’s sales productivity, at $366
`sonal collection. Ask Fisher a
`GapKids at
`per square foot of selling space,
`question and he’ll consider it
`now appears to equal or exceed
`carefully before answering.
`theendof
`that of the Limited Stores divi-
`Where the two men difier
`very little is in their desire to
`'
`sion of the Limited.” Fisher
`spread the Gap name even far-
`proclaims himself satisfied: January WI"
`ther afield.
`In 1985 when
`“My dream of this company is
`[)3 a new fine
`Drexler couldn’t find good-
`exactly what it is today. Mickey
`_
`_
`looking, durable clothing for his
`was the first person to under-
`f0l' Infants
`6-year-old son, he figured other
`stand that.”
`parents might be having the
`Take one look at Drexler and and toddlers
`same problem. His solution:
`Fisher and you Would never
`_
`GapKids shops, which have the
`--think they work for the same called y_ou
`company. Drexler, a fast-talk— guessed |t— same crisp look as a grown—up’s
`ing, faster-thinking Bronx boy,
`Gap. Says Drexler of the store’s
`babyGap.
`is a study in perpetual motion.
`beginning: “I didn’t know if
`Dressed most days
`in jeans
`GapKids was going to work the
`
`— J
`
`HE GAP’S GROWTH hasn’t come
`without a few missteps, particularly
`at Banana Republic. When the
`company bought the stores in 1983,
`they featured an Indiana Jones safari look
`that customers loved. But not much was
`done to update either the merchandise or
`the stores, so when shoppers decided they
`had tired of khaki clothes and jungle—in-
`spired interiors, Banana’s appeal slipped.
`Goldman’s Ellis says the division had an op-
`erating loss of $10 million in 1988.
`Drexler spent
`last year revamping the
`stores and the merchandise they carry.
`Though the khaki-safari look is still a sta-
`ple, he toned down the jungle motif and
`fortified the clothing mix with more
`fashionable, higher-priced goods. Items
`like suede skirts ($370) and leather bomb-
`er jackets ($325) are now sold alongside
`raw-silk sweater sets and chambray shirts.
`The chain will still
`likely suffer another
`$10 million operating loss in fiscal 1989-
`on about $195 million in sales, vs. $191
`million in 1988—but Ellis expects it
`to
`make money in 1990.
`In November the Gap announced it was
`closing an experimental division called
`Hemisphere. The shops, selling mostly ups-
`cale European-designed clothing, opened in
`1987 as the Gap’s attempt to capture more-
`affluent customers. “Even though there
`Reprinted through the courtesy of the Editors of FORTUNE
`© 1990 The Time Inc. Magazine Company.
`
`GAP 004458
`
`

`
`were only nine stores, getting Hemisphere
`off theiground took a lot of time, and we re-
`alized the profits for it were way, way down
`the road,” says Drexler. “We thought
`it
`would be better to concentrate our efforts
`on what we already had going.” Says Fisher:
`“Hemisphere was a distraction.”
`
`OR NOW, both men say they see
`more than enough growth ahead
`with Gap, GapKids, Banana Re-
`public, and stores abroad. Claims
`Fisher: “We can have 15% to 20% growth
`per year for the next five years and make
`that happen without adding another con-
`cept.” One of the main items on their agen-
`da this year will be to start expanding the
`size of about 170 existing Gap stores. As for
`new stores, look for-the.m=.not in fancy shop»
`ping malls but on main streets downtown.
`Says Jim O’Donnell, who oversees the
`Gap’s real estate deals, among other duties:
`“We’re already in all the best malls, and
`since mall growth is slowing, it’s time to find
`other locations. We think downtowns are
`going to be the place to shop.”
`Tell that to the two dozen or so shoppers
`inside the Gap recently at the Paramus Park
`mall in Paramus, New Jersey. Like all Gap
`stores,
`this one is clean and bright, with
`neatly displayed merchandise and bold win-
`dow displays. On this day most customers
`seem to be in their 20s and 30s. But over
`near the corner is a 60ish woman holding a
`white cotton turtleneck. Soon a young girl
`walks over. “Grandma, I think that might be
`a little big on me,” she says. “It’s not for
`you,” laughs the grandmother. “It’s for me.”
`Mickey Drexler would be thrilled.
`I3
`
`INVESTOR'S SNAPSHOT
`
`SALES
`(lolesl four quaders)
`CHANGE FROM VEAR EARLIER
`
`$1.5 BILLION
`UP 23.3%
`
`$95.6 MILLION
`UP 50. l%
`
`NET PROFIT
`CHANGE
`RETURN ON COMMON
`STOCKHOLDERS’ EQUITY
`FIVE-YEAR AVERAGE
`STOCK PRICE RANGE
`_____________:__:_____
`(last I? months)
`$35.25-$61.50
`__________________._____
`RECENT SHARE PRICE
`$50.00
`
`30.0%
`22.5%
`
`
`
`PRICE/EARNINGS MULTIPLE
`
`19
`
`TOTAL RETURN TO INVESTORS
`(12 months to l/I2)
`41-9%
`
`GAP 004459
`
`

`
`Gap (Apparel), LLC v. Gap One Enterprises, LLC
`Opposition No. 91172505
`Serial No. 78683999
`
`OPPOSER’S NOTICE OF RELIANCE NO. 3 UNDER 37 CFR § 2.122(e)
`
`Exhibit 21
`
`

`
`GAP 004316
`
`

`
`
`
`‘Julian Schnabel with a tablecloth, one of
`his more unorthodox painting tools. Page 428.
`
`424
`Winning Streep
`For years Meryl Streep was the queen
`of accents and Oscar nominations. But
`now, David Handelman finds. she's
`lightening up. taking her life and
`career in a new direction
`
`428
`Emperor Julian
`With his grand gestures. huge
`canvases. and challenging ambition.
`Julian Schnabel has reigned as the art
`world's most controversial figure for
`more than a decade. On the eve of his
`first New York showings in more than
`two years, Dodie Kazanjian sees a
`new direction in his work—and signs
`of mellowing
`
`436
`Oscar in abundance
`He may be the most intemational of all
`American designers—and one of the
`shrewdest. But even as Oscar de la Renta
`launches a new perfume and expands
`his European operations, Julia Reed finds
`that for him, business never interferes
`with the good life
`
`469-498
`Vogue style
`
`Living: Garden season is forever now. as
`flowers are gathered from around the world
`
`Travel: Adventures in fitness. The Fitness
`required. may be aerobic or Darwinian—active
`travelers have many choices. Tad Friend rafts
`the Yukon, Alexis Jetter kayaks in Italy
`
`Food: Can a drink before or wine with
`dinner actually be good for your heart?
`Jeffrey Steingartcn raises a glass in
`salute to the latest findings on alcohol
`
`COVER LOOK Making a comeback for
`, spring: the classic white shirt. The newest
`way to wear it——tiecl at the midriff, as shown
`on our ten cover models, clockwise from
`top, Christy Turlington, Linda Evangelista,
`Cindy Crawford, Karen Mulder, Elaine
`Irwin, Niki Taylor, Yusmeen Ghauri,
`Claudia Schiifer, Naomi Campbell, and
`center, Tatiana Patitz. Shirts and jeans by
`The Gap. Details, stores, see In This Issue.
`Hair, Oribe at Elizabeth Arden; makeup,
`Mary Greenwell. Fashion Editor: Grace
`Coddington. Photographer: Patrick
`Demarchelier. (For more on our 100th-
`
`anniversary issue cover, see page 138.)
`
`VOGUE APRIL I992
`
`
`
`‘I96
`Vogue alive!
`
`31 2
`Fitness
`Women versus men. Men set the
`most records but only because sports
`are too easy. Ed Dolnick uncovers
`women's true fitness advantage
`Health notes
`
`331-352
`Vogue beauty
`Cover Girls are made, not born.
`Robert E. Sullivan, Jr., goes behind
`the scenes to report on the selection of
`a new face for the nineties. . Beauty
`answers: sunscreens for sensitive skin
`are the brightest news in sun
`defense. . .Beauty clips
`
`Movies: A new- documentary, funded by
`Robert Redford, aims to reopen the case of
`Native American Leonard Peltier.
`Robert Spillman reports
`
`Theater: With movie stars, major new
`productions. and a fresh spirit of optimism,
`Broadway seems to be bouncing back.
`John Heilpem reports from backstage
`
`Radio: Graydon Carter braves the vast
`wasteland of the American airwaves and
`discovers a few bright spots on the dial
`
`Music: The middle-aged icons of “classic
`rock" no longer trash hotel rooms. Now
`they're celebrated in boxed CD sets and a
`pious Hall of Fame. Kurt Andersen spends a
`hard day's night
`
`Books: Eleanor Roosevelt put up with
`FDR's philandering and with his domineering
`mother—and still became America's leading
`female activist. Hortense Calisher examines
`Blanche Wiesen Cook's new biography
`
`444
`Raising eyebrows
`Eyebrows-—from demure to dramatic—are
`bringing a new focus to the face. Jody Shields
`takes a look
`
` 8
`
`Letter from the Editor
`
`66, 76
`Masthead
`
`94
`
`Talking back: letters from readers
`
`138, ‘I42
`Contributors
`
`‘I46
`Lisa Fonssagrives Penn
`
`‘I53
`
`Arts in brief: Books, music, theater, TV
`
`People are talking about
`People have been talking about Vogue's People
`Are Talking About section since it began
`during World War II: news, views, and the
`latest attitudes——-all the barometers of style.
`Here, a brief recap
`
`253-306
`Vogue arts
`
`Movies: From Jim Jarmusch's taxi drivers to
`Barbara Kopple‘s meat packers, Joan Juliet
`Buck looks at the late-industrial malaise
`
`324
`Horoscope
`By Athena Starwoman
`
`382
`At Vogue
`Three celebrated fonner editors recall their
`days at Vogue-——an exotic education that
`included proper manners and morals, wartime
`dispatches, and the correct way to skin a
`peach. Joan Didion, Rosamond Bemier, and
`Millicent Fenwick remember how it was
`
`l$1;
`
`xx
`
`GAP 004317
`
`

`
`Gap (Apparel), LLC v. Gap One Enterprises, LLC
`Opposition No. 91172505
`Serial No. 78683999
`
`OPPOSER’S NOTICE OF RELIANCE NO. 3 UNDER 37 CFR § 2.122(e)
`
`Exhibit 22
`
`

`
`"v -The llctailers Daily Newspaper °Tuesday - Aipril 1. 1992- Vol. I53. No. as -$1.00
`
`
`
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`,1: max -— Square shoulders. I '
`and long. a dash ol leopard and .
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`ptarlonnc to boot. It‘: Calvin‘: trash latte
`on the Fortles. Hm. lrom the collection
`he show:lod_:y,_
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`Accessories. For more on the
`ew York
`shows. see pages 6 and 7._
`
`
`
`'IIII.IllI
`
`Designers:
`Endangered
`Dr Extinct?
`NEW YORK — Armani's doing ba-
`sics and The Gap is on the cover of
`Vogue.
`,
`"The
`it.
`As Karl Lagerteld puts
`days ol
`the Mrs. Paleys are gone."
`The designer may not be a dino-
`saur. but
`the species could be endan-
`gered.
`loll
`As SA marches on with its
`collections this week. designers here
`rd abroad continue to be conlronted
`uy a recessionary economy and a con-
`sumer whose obsession with value is
`dictating,
`in large measure. the look ol
`lashion.
`in response. designers have spun
`oli countless secondary lines. cut pric-
`es. huslled new linancing and licenses.
`‘
`Sn l.\', page I0
`
`xfi
`
`L
`
`

`
`

`
`

`
`Gap (Apparel), LLC v. Gap One Enterprises, LLC
`Opposition No. 91172505
`Serial No. 78683999
`
`OPPOSER’S NOTICE OF RELIANCE NO. 3 UNDER 37 CFR § 2.122(e)
`
`Exhibit 23
`
`

`
`Copyright 1992 The New York Times Company
`The New York Times
`
`November 9, 1992, Monday, Late Edition - Final
`
`SECTION: Section D; Page 1; Column 3; Financial Desk
`
`LENGTH: 1363 words
`
`HEADLINE: A Quiet Alteration at Brooks Bros.
`
`BYLINE: By STEPHANIE STROM
`
`BODY:
`
`When Brooks Brothers installed escalators in its flagship store on Madison Avenue
`three years ago, it incited something approaching hysteria among its clientele. The offend-
`ing contraptions, standard fixtures in most stores of more than two levels, became the
`symbol of unwelcome change at an institution that had stoically upheld the status quo for
`well over 150 years.
`
`Today the escalators rarely arouse the attention of anyone other than the occasional
`repairman, and the revolution theygwere supposed to portend has failed to materialize.
`Brooks Brothers has instead undergone an appropriately subdued metamorphosis, evident
`in Hermes-esque neckwear, stylishly faded sports shirts and stirrup pants hanging unob-
`trusively alongside the rep ties, button-downs and kilts that are the chain's signature mer-
`chandise.
`
`Its most obvious deference to the times is the liberation of its boxer shorts, now en-
`sconced in help-yourself fixtures instead of discreetly housed under glass counters.
`
`Owned by British Retailer
`
`After four tumultuous years in which economic recession and life-style changes made
`the nation's oldest retail clothier seem every bit of its 174 years, Brooks Brothers has fi-
`nally started giving Marks & Spencer P.L.C. a return on the $750 million it spent to acquire
`the company in 1988.
`
`In a recent interview, Sir Richard Greenbury, chairman of Marks & Spencer, firmly set
`aside the persistent rumor that the British retailer wanted to sell Brooks Brothers. "We're
`here for the long run," he said, although tartly adding that Marks & Spencer had paid too
`much for its American subsidiary.
`
`For the year that ended on March 31, Brooks Brothers‘ sales rose 4.6 percent to $314
`million, an increase that was somewhat better than average compared with other American
`retailers. But operating profits accelerated 64 percent, thanks to stringent cost controls and
`computerized inventory management systems. For the first six months of fiscal 1992,
`through September, operating profits rose 30 percent from the comparable period a year
`ago, while sales increased about 10 percent.
`
`GAP 4653
`
`

`
`"The message today is: we're back," said William V. Roberti, president of Brooks
`Brothers, who nonetheless is still sensitive about the escalators. He refused to have his
`photographtaken anywhere near them.
`'
`
`Independent assessments of the chain's status are difficult to obtain. British investment
`analysts who follow Marks & Spencer say Brooks's parent keeps news about its American
`stepchild to itself. And since Brooks contributes less than 2 percent to the bottom line and
`generates only about 3 percent of the British retailer's revenue, they find it easy to ignore.
`''I'm quite sure you know much more than us," said one analyst at a major British invest-
`ment bank.
`
`Locked Into a Niche
`
`Retail consultants contend that Brooks's very strength, its lock on the niche market for
`traditional clothing, is its weakness. They say Brooks has so locked itself into that niche
`that it cannot respond to changes in tastes. "They cannot go out of suit," said Walter K.
`Levy of Walter K. Levy & Robert E. Kerson Associates lnc., a retail consulting firm. "They
`have no credibility with the updated customer."
`
`The chain has also been dogged by questions about the quality of its merchandise and
`its relevance in a world enamored of deconstructed casual clothes, jeans and Lycra. lt
`narrowly averted a strike by unionized employees this spring, and the weak economy in
`Japan is buffeting its stores there.
`
`Most recently, Consumer Reports gave a lukewarm rating to a $595 Brooks Brothers
`suit called a Brooks Ease, the chain's second-best seller in tailored clothing. While the
`magazine's panel, which tested 17 men's suits, gave the Brooks suit high marks for tailor-
`ing, it did not like the way it dry-cleaned, its finishing details or its price. In fact, the panel
`preferred $240 and $325 suits from J. C. Penney to the Brooks suit.
`
`The peppery Sir Richard is undaunted, although irritated, by such adversity. "Men have
`got to have a trouser to cover their backsides," he said, putting into perspective others‘
`concerns about the impact of currency fluctuations, the weak Japanese economy and de-
`clining sales of the tailored suits that were once Brooks Brothers‘ bread and butter.
`
`- For men who still want a suit but do not want to spend $500 or more, Brooks has de-
`veloped what it calls the Wardrobe Collection. Using new dyeing techniques that allow it to
`match different bolts of fabric instead of having to use the same bolt of woven fabric to
`create a suit, Brooks Brothers has cultivated sales of "suit separates," pants and jackets
`for men whose waistline