This Iconic American Retailer Is Worth Nearly $8 Billion. Now It’s Trying to Break into the $15 Billion Handbag Market.

Gap is extending its denim brand into handbags and betting that a deliberate push into accessories can turn everyday staples into fashion items.

According to a recent report from The Wall Street Journal, Gap is expanding beyond jeans and logo sweatshirts with a new handbag collection designed by Reed Krakoff, the former Coach creative leader credited with helping transform Coach into a global accessories giant.

The line, called GapBag, reworks some of Gap’s best-known wardrobe staples, like denim apparel and hoodies, into totes, shoulder bags, crossbodies, pouches and other small accessories. The first collection is scheduled to arrive online and in select North American Gap stores on September 8. 

The effort is part of Gap’s broader attempt to regain cultural relevance and expand into new categories. The company has spent the past few years rebuilding excitement through celebrity-led marketing campaigns and design initiatives such as GapStudio, its higher-end in-house label led by creative director Zac Posen.

Gap’s comparable sales rose 10% in its most recent quarter ending August 1, showing investors evidence of a turnaround after years of uneven performance. 

Differentiating Gap accessories

For Krakoff, the point is to give Gap an accessories perspective that it has historically lacked. Richard Dickson, the chief executive of Gap, which also owns Old Navy, Banana Republic and Athleta, said in an interview with the Journal that “accessories are not a new business for Gap, but we’ve never been in it with distinction or conviction.” 

Krakoff’s designs aim to change that by making the bags feel unmistakably Gap. For example, the Five-Pocket Tote borrows the belt loops, metal hardware and stitching of classic jeans, while the Hoodie Tote uses fleece, ribbing and a drawstring closure inspired by the retailer’s signature sweatshirt.

Gap’s revival is a campaign to make a mall brand feel culturally relevant again, not just to sell more clothes. Dickson joined as CEO in 2023 after the company cycled through five CEOs in five years. He emphasized the importance of storytelling and cultural connection that once made Gap a defining brand in the 1990s and early 2000s. 

His strategy included releasing high-visibility creative campaigns and collaborations, including Gap’s “Better in Denim” campaign starring global girl group Katseye, which Fortune reported generated 80 million views.

Going after a $15 billion market

Now the handbag launch tests whether renewed attention for Gap can become a solid business. Gap is targeting a $15 billion accessories market and pricing the bags from $29.95 to $148, with a limited-edition patchwork denim tote on sale for $498, per the Journal.

Krakoff brings category expertise that Gap has not traditionally possessed. He led Coach creatively during a period when the company became a mainstream accessories name, and he has also worked at Tiffany & Co. and at his own label. Gap hired him as executive director of accessories in 2025 as it began building a more focused accessories business.

Gap had a market capitalization of nearly $8 billion at the time of writing.