Old Navy and Gap are Separating into Two Different onlinepanies – And One is Closing Stores
Old Navy and Gap are breaking up!
Gap Inc. just announced in a press release that they are planning to separate into two independent publicly traded onlinepanies by 2020: (1) Old Navy, as a standalone, and (2) a yet-to-be-named onlinepany (currently NewCo), which will consist of the iconic Gap brand, Athleta, Banana Republic, Intermix, and newly-launched Hill City.
Each brand has been going in separate ways over the years. The separation will allow each onlinepany to focus on its unique business needs. Old Navy, one of the fastest growing apparel brands in the U.S., has been successful in recent years, with a 3% increase in sales at stores in 2018. Gap’s sales, however, fell 5% last year.
“…it’s clear that Old Navy’s business model and customers have increasingly diverged from our specialty brands over time, and each onlinepany now requires a different strategy to thrive moving forward. Recognizing that, we determined that pursuing a separation is the most onlinepelling path forward for our brands – creating two separate onlinepanies with distinct financial profiles, tailored operating priorities, and unique capital allocation strategies, both well positioned to achieve their strategic goals and create significant value for our customers, employees and shareholders” -Robert Fisher, Gap Inc.’s Board Chairman
As part of the restructuring process, the onlinepany plans to close approximately 230 Gap specialty stores over the next two years, which includes mall-based stores that have seen declining traffic over the years. However, they plan to open more Old Navy stores, as well as a few Athleta locations under the NewCo brand.
Store closures mean great sales, so be sure to keep an eye out for possible Gap sales!
