GAP is spinning off Old Navy. The successful low-price apparel brand is becoming its own, separate company.
GAP shares rose in price after the company announced its intention to separate its Old Navy brand into a separate public company.
Many well-known analysts welcomed this decision since such a restructuring would improve the company's business. In recent years, the Old Navy brand has been successfully developing and has shown good sales dynamics, while Gap is experiencing a slowdown, which has even led to the decision to close some 230 chain stores around the world. Allocating a popular brand to a separate company will make the business more flexible and transparent, it will be possible to respond more quickly to the latest market trends and ever-changing consumer tastes. Moreover, this approach is more convenient in the heyday of e-commerce.
After the division, Gap will also have brands like Athleta, Banana Republic, Intermix and Hill City. At the helm of the company will remain CEO Arthur Peck (Arthur Peck). And Sonia Syngal, CEO of Old Navy, will continue to lead the brand, but as a separate company.
This is not the first such case. So, last year, clothing manufacturer VF Corp. singled out Lee and Wrangler brands into separate public companies. It can be assumed that in the near future other brands from the fashion world may take similar steps.