Gap and Old Navy are parting ways as the two companies plan to split. Gap will retain Banana Republic, Athleta and other brands, but Old Navy will be on its own. Gap is also closing more than 230 stores all over the world during the next two years. At the end of 2018, there were 758 stores in North America and 1,242 stores worldwide.
Old Navy has long outperformed the other companies under the current umbrella of NewCo brands, and this split will allow Old Navy to expand on its own. Old Navy is currently one of the fastest growing apparel brands in the United States. Gap, founded in 1969, experienced a boom with the popularity of malls late in the 20th century. However, the brand failed to attract the same level of loyalty from millennials as it enjoyed from baby boomers. Gap lost shoppers to H&M, Zara, Levi’s, and Target.
Gap sales fell 7% during the holiday quarter according to Business Insider. Gap says they’ll lose about $625 million due to store closures. The Athleta branch of NewCo brands is doing well, however. The company plans to open new Athlena locations. Gap is also launching a new men’s athleisure brand called Hill City, which they hope will help draw in new customers.
