Gap Inc. said on Thursday that one of the companies would include an old navy. The other, unnamed company is Gap, Banana Republic and other brands, including Athleta.
"It is obvious that the business model and customers of Old Navy are increasingly different from our special brands over time," said Gap Board chairman Robert Fisher. He said that every company "now requires another strategy to move forward."
Gap said on Thursday that Sonia Syngal, CEO of Old Navy, is constantly leading this brand. The other company is led by Art Peck, CEO of Gap.
Separation is a history of two very different companies: in recent years, Old Navy has flourished, and sales of stores that have been open for at least a year have increased by 3% in 2018.
Meanwhile, Gap struggled – its sales last year fell by 5%.
Gap is the best brand in retail: In the late 20th century, sweaters and turtleneckers with logos in the mall were won from teenagers to moms and celebrities as Sharon Stone.
But the brand did not reach the branded Baby Boomers brand and could not attract the Millennials who are leading fashion trends today.
The company speaks for a while about how to make Gap a healthy part of it again. In November, Peck said the Gap store was not profitable. At the end of the last quarter, there were 1,242 Gap stores worldwide. Of these, 758 were in North America.
On Thursday, the company said it would close 230 Gap stores in the next two years as part of the "revitalization" of the Gap brand. The closures will affect the “special” Gap stores, which include mall-based stores.
Most of these stores will be in North America, Peck said they were calling analysts on Thursday. Teri Stoll Chief Financial Officer added that the company focusing on non-selling businesses was in "bad places" or had no "strategic fit".
The closures will be about 130 this year, according to Gap. The company also plans to open the sites of Old Navy and Athleta. Athleta, part of the new Gap company, is a successful women's sports chain.
Gap believes that according to the Securities Register, it will lead to savings of between $ 250 million and $ 300 million in the next two years. The company is expected to complete the division of companies in 2020.