NEW YORK: Gap Inc said on Thursday it would separate its Old Navy brand into a publicly traded company, to focus on its struggling namesake apparel business, sending its shares up 18 per cent.
Old Navy has had a better success than the Gap brand in recent years as a wide range of budget apparel has made it more appealing to a broader base of consumers."It's clear that Old Navy's business model and customers have increasingly diverged from our specialty brands over time," Gap's Chairman Robert Fisher said.Gap's overall same-store sales fell one per cent in the fourth quarter ended Feb 2, compared to analysts' average estimate of 0.
Gap, Athleta, Banana Republic and the remaining brands will be part of a yet-to-be-named company. The separation is expected to be completed by 2020, Gap said.Source: Reuters/de