Gap and Old Navy will go their separate ways, splitting into two public companies as Gap shutters more than 200 stores.
As part of a restructure of its fleet, Gap will close 230 stores over the next two years, according to a statement today. The company estimates a sales loss of $625 million from the closures, but they will result in an annual savings of $90 million.
“The remaining specialty fleet will serve as a more appropriate foundation for future growth of the brand across the specialty, outlet and online channels,” the company said in a statement. “There will be a healthier channel mix after the restructuring, with nearly 40 percent of sales coming from online, and the remainder split fairly evenly between the specialty and value channels.”
The company will also split into two publicly traded companies: Old Navy and a new company that is yet to be named, which will include Gap, Athleta, Banana Republic, Intermix and Hill City.
“As we look ahead to 2019 and beyond, we know what we need to do to win and, combined with the separation we announced today, we will be well positioned to leverage the power of our brands and the talented teams that lead them to accelerate the pace of change, improve execution and deliver profitable growth,” said Art Peck, president and CEO of Gap.
The company as a whole saw a 1 percent decrease in comparable sales in the fourth quarter of 2018. During the same period of 2017, comparable sales were up 5 percent.
Old Navy’s comparable sales were flat despite a 9 percent increase in 2017, Gap’s were down 5 percent versus no change in 2017 and Banana Republic dropped from a 1 percent increase in 2017 to a 1 percent decrease in 2018.
Gap at The Greene Town Center in Beavercreek is already set to close. There are still stores at the Cincinnati Premium Outlets, Jeffersonville Tanger Outlets and others in Cincinnati and Columbus.
Old Navy has a larger presence in the area with stores at the Greene, Liberty Center, Bridgewater Falls, Waterstone Center, Jeffersonville Tanger Outlets and several others in Cincinnati. The Old Navy store at the Dayton Mall recently closed but another is under construction at Austin Landing.
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