Old Navy’s business model and customer base have diverged from the Gap’s other specialty brands, executive says.
Gap on Thursday announced plans to split into two publicly traded companies, putting Old Navy on a stand-alone path. By Rachel Siegel Rachel Siegel National business reporter Email Bio Follow February 28 at 4:47 PM Gap on Thursday announced plans to split into two publicly traded companies, putting Old Navy on a stand-alone path apart from the company’s other brands.
As part of the separation, Gap shareholders will receive a pro-rata stock distribution and own equal shares of both Old Navy and the new company. The deal is set to be completed in 2020 and must receive final approval from Gap’s board of directors. On an earnings call Thursday evening, said Teri List-Stoll, Gap’s chief financial officer, said the company had been grappling with “what’s right for Old Navy versus what’s right for the other brands,” whether with online strategies or technology tools.Gap’s president and chief executive, Art Peck, will stay at the helm of the new company. Sonia Syngal, Old Navy’s president and chief executive, will take over that franchise.
Plus, closing 230 stores signals that Gap “must have seen that there was too much waste in its business model.”
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