Gap Plans to Spin Off Old Navy After a Dismal Year

[Eugene]

Source: New York Times

Gap Plans to Spin Off Old Navy After a Dismal Year

By Sapna Maheshwari
Feb. 28, 2019

Gap, one of the largest operators of mall stores in the United States, said on Thursday that it planned to spin off Old Navy into a separate public company, drawing a line between the family-friendly apparel chain and its classic, more expensive brands.

The separate company would contain Gap’s namesake label, Banana Republic, Athleta, Intermix and its new Hill City brand. Gap is aiming to complete the transaction in 2020, and the two companies will end up similar in size. Old Navy brought in about $8 billion in revenue in the last fiscal year while the brands that will make up the new entity combined to take in around $9 billion.

Art Peck, Gap’s chief executive, said on an earnings call that the proposed split was an opportunity “to write the next chapter for specialty retail.” He said that, over time, Old Navy’s needs have differed from those of the rest of the brands. It shares fewer customers with the other labels, has a smaller international footprint and uses different in-store technology.

“Old Navy is a little bit more fast-fashion, move quick, lower price point,” said Greg Portell, lead partner in the global consumer and retail practice of A. T. Kearney, a consulting firm. “If you think about the more mall-based brands, they are foundational, they’re classic, they’re not as quick to turn. Athleta’s a little bit different, but it still targets that consumer that is looking for a different experience than the Old Navy, price-based, go-now shopper.”

-snip-

Read more: https://www.nytimes.com/2019/02/28/business/gap-old-navy-spinoff.html

[rickford66]

1. More business management nonsense.

Why not put a Starbucks in each store ?

On edit:

You know what every clothing store really needs ? Comfortable seating for husbands and boyfriends.

[kysrsoze]

2. I wouldn't care if all of Gap went away. Awful styles and quality.

Gap brands are a textbook case of how to run a company into the ground. I used to love shopping at Banana Republic and was willing to pay extra because the styles were all modern and super high quality. Then they just threw in the towel and became a generic J. Crew clone.

After that, the whole family shopped at Gap and Old Navy because things were of decent quality at reasonable prices. However, over the last 5 years, the quality dropped to cheap, paper-thin fabrics that were good for only a year before they started falling apart. It’s now just garbage clothing like Forever 21 and other disposable clothing stores. The style was dismal. Much of the industry has gone this way, to the point that we don’t know where to buy decent clothes anymore. My wife has Target, which actually isn’t that bad. But the men’s section is horrifying. We can sometimes find decent stuff at Kohl’s.

[Farmer-Rick]

3. How come all these corporations are going down and yet our economy is supposedly doing just fine?

I was ready to buy a RoadTrek class B camper van and they just went into receivership. So, their warranty is useless.

Something is brewing.