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[Voost Kain]

In what reads as a desperate move, Gap Inc. is spinning off the best part of its business -- Old Navy. The market liked the news, sending shares soaring 25 percent in premarket trading.
The remaining company -- which still needs a name -- will consist of the namesake Gap brand, Athleta and Banana Republic, plus a couple of lesser known brands. It will have annual revenue of about $9 billion, compared to Old Navy’s $8 billion, the company said.
Analysts called the split a smart one -- and one the struggling parent company should have considered long ago.

“It’s absolutely long overdue. I’m stunned it hadn’t happened already. How much more can the strength of Old Navy prop up the rest of the business?” said Wendy Liebmann, chief executive officer of WSL Strategic Retail. “It’s almost as if they used Old Navy as a smokescreen to hide the absolute urgency to do some fundamental things with the other businesses.”

The Gap brand has struggled as part of a broader slump for brick and mortar retailers, even as the lower-priced Old Navy brand has resonated with discount shoppers. In the latest quarter -- the critical holiday period -- Old Navy’s same-store sales were flat, while Gap and Banana Republic sales were both negative.

As part of the reorganization, the company will slash the store count of the struggling Gap brand by closing 230 locations over the next two years. These closures will erase $625 million in sales. Art Peck, who’s been leading parent company Gap, said the company doesn’t know the exact number of job losses from the planned store closures but will try to minimize the number.

Ok, I'm a bit confused on this one. I'm aware of how a split would be a good idea in certain situations, but Old Navy, based on old and recent investor and finance reports, was TH REASON Gap made it through a few years in the past to stay in business.

So By removing what has saved them, how would this...what?

 

[Dirk Benedict]

I actually like Gap clothing. They're clothes have lasted me years and become very nice lounge wear when replaced with something new. I have some very nice, dark colored two toned socks that are comfy as all fuck.

With that piled of words said above, I am kinda bummed to see they're not doing so hot.

 

[Dice]

Gap clothes are decent quality but they're overpriced. H&M and Uniqlo slaughter them on value. People who want to pay Gap prices will go to L.L. Bean or nab the standard brands at Macy's or a step up at Nordstrom. Cultural competition is high, so if people are going to drop dollars it will be to look snazzy, not casual. This is not even looking at the online movement of dress basics for cheap, which is being forwarded by Amazon, MassDrop, etc. Even if you're being casual, you generally want to look like you have your shit together and will probably meet someone important later. If you don't, then people around you enjoy feeling like they are that important person for whom you got decently put together. Welcome to the Instagram generation.

 

[StreetsofBeige]

I actually like Gap clothing. They're clothes have lasted me years and become very nice lounge wear when replaced with something new. I have some very nice, dark colored two toned socks that are comfy as all fuck.

With that piled of words said above, I am kinda bummed to see they're not doing so hot.

I don't shop Gapor Old Navy anymore, but I always found their stuff good. Holds up well. And good return policies. Some of their Banana Republic stuff has lasted forever.