Old Navy Is Still The Only Part Of Gap Inc. That’s Doing Well

Image courtesy of Mike Mozart

As retailers continue to struggle to keep sales up and stores open, Gap Inc. has been able to stay profitable. It’s all thanks to one brand, Old Navy.

Propped up by the low-end brand

According to the company’s earnings statement released late yesterday, sales at comparable stores were up 1% across the whole company, but here’s the problem: All of that growth came from Old Navy. Gap stores’ sales actually fell by 1%, and Banana Republic stores’ sales fell by 5%. Old Navy, meanwhile, had a 5% sales increase in comparable stores.

Art Peck, the company’s president and CEO, says that Gap Inc. is planning for the long term, and working to be less slow to respond to trends when it faces competition from the H&Ms and Zaras of the world, brands that turn new products around faster and at lower prices.

“As we continue to focus on long-term growth, we are accelerating our strategies that put the customer at the center of everything we do – including a focus on product categories where we have clear differentiation, continued investment in our online and mobile offerings, and taking advantage of our operating scale to drive speed to market, responsiveness to customer demands and efficiency,” Peck said in a statement. Imagine that: A retailer planning to focus on what customers want to buy!

Clothes that people want to wear?

The company wasn’t supposed to still be depending so heavily on Old Navy. Two years ago, the Gap brand even promised to produce some clothes that customers would actually want to wear by the spring of 2016.

Instead, it turned out to be almost good news for the company when one of its warehouses caught fire in the fall of 2016, destroying inventory that customers didn’t want anyway.

Now Gap Inc. just needs to concentrate on making clothes that people can wear and want to wear across the rest of its brands. Old Navy is the company’s low-end brand, but notably is the only one of the company’s fashion brands that offers extended sizes, if only online.