Gap and Old Navy have decided to spilt up. Gap, with sales down 5%, will keep a number of portfolio brands and Old Navy, more of a value brand whose sales are up, will land on its own. Explanations for the split suggest Old Navy and Gap customers don’t really overlap and store operations are a bit different – so it’s a good split.
From a branding standpoint, I like the idea. Retail brands staying with the Gap include Banana Republic, Athleta, Intermix and Hill City. Old Navy is reported to be “a little more fast-fashion, more quick, lower price point,” according to Greg Portell of consulting firm A.T Kearney. That makes Old Navy a good $9B standalone company.
When looking at the care-abouts and good-ats of each brand (Gap and Old Navy), you are likely to uncover competitive advantages, unflattering to the other. And while I’m religious about building positive brand value, playing off of a competitor’s negatives is fair. When both brands are under one roof, management does not allow insinuations or pot shots, which can inhibit brandcraft.
So the gloves will come off. Gap continues to have work to do. Old Navy better double down. Let’s go!