Gap will split into two publicly traded companies; stock surges

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One of the most 'iconic brands in the history of time,' Gap, is spinning off Old Navy as a separate publicly traded company. Here's what you need to know.

Gap Inc. said Thursday that it will split into two independent publicly traded companies — one comprised of its Old Navy brand, and the second a yet-to-be-named company that includes its other brands like Banana Republic and Athleta.

Following a review by Gap's board of directors,"it's clear that Old Navy's business model and customers have increasingly diverged from our specialty brands over time, and each company now requires a different strategy to thrive moving forward," Robert Fisher, Gap's board chairman, said. Old Navy, meanwhile, brings in about $8 billion in annual sales by itself. This brand has notably been the strongest within the company as Gap's namesake label has struggled to grow sales of late. Old Navy has been successful in targeting shoppers on a budget, rivaling off-price channels like T.J. Maxx and Ross Stores.

The spinoff should help both companies operate with"a sharpened strategic focus and tailored operating structure," Peck said in a statement. The transaction is expected to be completed in 2020, subject to final approval by Gap's board of directors."Separating Old Navy to a standalone company is what we have argued for over the past few years," Jefferies' Randal Konik said in a research note.

 

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WHEN PEOPLE DON'T HAVE MONEY TO SPEND.!!

Both out of business in 2 years

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