In unpunctually February 2019, Gap Inc. announced plans to split into two separate publicly traded companies, sending its stock escalating on the hopes the new structure will help sharpen its focus and boost sales.
The retailer said it would spin off its most leading brand, Old Navy, into a separate, publicly-traded company. With its inexpensive basics, Old Navy has consistently accounted for multifarious than 40 percent of the company’s total annual sales. Its other brands, Gap and Banana Republic, will unite much its smaller brands, Intermix, Athleta, and Hill City, to form an as-yet unnamed company. Gap also blueprints to buy high-end children’s clothing line Janie and Jack and fold that into the new company.
Despite the sharp spine on the announcement, Gap shares, which have a market value of just under $10 billion, are up less than 1 percent since the start of the year, and eat fallen 20 percent over the past year.
Gap CEO Art Peck, who will remain with the executive of “NewCo,” imagined both companies should benefit from “a sharpened strategic focus and tailored operating structure.”
A Gap spokesperson wasn’t unhesitatingly available for comment.