We inform you that on this website we use our own and third-party cookies to collect information about its use, improve our services and, where appropriate, display advertising by analyzing your browsing habits. You can expressly accept its use by pressing the "ACCEPT" button or configure and select the cookies you want to accept or reject in the settings. You can also get more information about our cookie policy here.

The global fashion business journal

Mar 28, 20248:57pm

Gap to split into two public companies, with Old Navy as a standalone

After presenting the results of 2018, the board of directors of the group announced the split, which will be effective in 2020.

Mar 1, 2019 — 10:00am
Modaes
Related topics
Save

Gap to split into two public companies, with Old Navy as a standalone

 

 

Gap to split in two. The American company, the fourth largest fashion distribution group in the world by revenue, has split Old Navy, which will quote as a standalone.

 

The rest of the group’s brands, Gap, Banana Republic, Athleta, Intermix and Hill City, which jointly register an average revenue of 9 billion dollars per year, will continue to trade under a new name. The group will also draw up a growth strategy for this division with the aim of improving the profitability of the brands.

 

“Each company now requires a different strategy to thrive moving forward,” said Robert Fisher, chairman, in a statement. “We determined to create two separate companies with distinct financial profiles, tailored operating priorities and unique capital allocation strategies,” added the executive.

 

 

 

 

The group explained that “the Old Navy’s business model and customers have increasingly diverged from our specialty brands over time, and each company now requires a different strategy”.

 

The company closed the fiscal year 2018 (finished on February 2) with an increase of 18% of its net profit, up to 1 billion dollars. The group’s sales, meanwhile, also registered a positive performance, with a growth of 4.5% to 16.58 billion dollars. Gap’s ebitda, however, fell in 2018, with a drop of 7% to 1.32 billion dollars.

 

By chains, Old Navy was the concept that performed best from the group, with a growth of 3% compared to the same period of the previous year. The Gap brand, on the other hand, recorded a 5% decrease in its revenue while Banana Republic remained stable, with an increase of 1% in 2018.

Following the announcement on the split, which is expected to be effective by 2020, the group explained that Art Peck will remain in the company’s management board, while Sonia Syngel will continue to lead Old Navy. The group composed by Gap, Banana Republic, Athleta, Intermix and Hill City will remain at its current headquarters, just like Old Navy, both located in San Francisco.

After the statement, the shares of the company soared by more than 20% on the Wall Street stock market. Gap accumulated a fall of 25% in the last twelve months, and its capitalization is below the 10 billion dollars.

Advertising
Participation rules

info@themds.com

 

Validation policy for comments: 

 
MDS does not perform prior verification for the publication of comments. However, to prevent anonymous comments from affecting the rights of third parties without the ability to reply, all comments require a valid email address, which won’t be visible or shared.
 
Enter your name and email address to be able to comment on this news: once you click on the link you will find within your verification email, your comment will be published.

0 comments — Be the first to comment
...