On Thursday, Gap Inc. announced it no longer planned to pursue spinning off Old Navy into a standalone company, citing the "cost and complexity" of splitting the brand from its parent company.
"The plan to separate was rooted in our commitment to value creation from our portfolio of iconic brands," Robert Fisher, Gap Inc. interim president and CEO,. "While the objectives of the separation remain relevant, our board of directors has concluded that the cost and complexity of splitting into two companies, combined with softer business performance, limited our ability to create appropriate value from separation.
The company also shared that Neil Fiske, president and CEO of the Gap brand, will leave the company. Fiske's departure is just the latest in an ongoing executive shakeup at Gap Inc., which included theGap first shared its plan to separate Old Navy, the company's top performing brand, in February 2019.
In the statement, Fisher said the process of splitting the companies shone a "bright light on operational inefficiencies and areas for improvement" for the Old Navy brand, ultimately contributing to the decision reversal. "We have learned a lot and intend to operate Gap Inc. in a more rigorous and transformational manner that empowers our growth brands, Old Navy and Athleta, and appropriately focuses on profitability for Banana Republic and Gap brand," Fisher said in a statement.
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