Gap Inc. is splitting into two. The retailer said Thursday that it’s creating two independent publicly traded companies — low-priced juggernaut Old Navy and a yet-to-be named company, which will consist of the iconic…
NEW YORK — Gap Inc. is splitting into two.
The retailer said Thursday that it’s creating two independent publicly traded companies — low-priced juggernaut Old Navy and a yet-to-be named company, which will consist of the iconic Gap brand, Athleta, Banana Republic as well as the lesser known names Athleta, Intermix and Hill City.
The San Francisco-based company said the spin-off will enable each company to focus on flexibility and pare down costs.
The company also said that it will be shuttering 230 Gap brand stores over the next two years. A year ago, the Gap brand had 725 stores worldwide. After the closures, which also include the 68 stores it shuttered this year, the chain will be down to roughly 427 stores. It expects to have more than 40 percent of Gap’s business coming from online after the restructuring.
Gap’s stock surged 25 percent in after-market trading.
The split up, which followed a comprehensive board review, comes as Old Navy has been thriving, while Gap still hasn’t been able to regain its footing despite numerous attempts to fix the business.
