Gap Inc. Nixes Plan To Spin Off Old Navy
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Gap Inc. announced it no longer plans to spin off Old Navy brand following softer business performance and abrupt departure of two top company executives.
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Gap Inc. Reverses Decision To Split From Old Navy Brand
Gap Inc. announced that its plans to split off Old Navy into a separate company are off. Analysts had grown skeptical of the separation plan devised by longtime CEO, Art Peck, last year. Robert Fisher took over as interim president and CEO after Peck’s abrupt departure in November and many observers expected the split to be canceled then. But the board reiterated the plan the next day.
In a company press release, Fisher stated, “The plan to separate was rooted in our commitment to value creation from our portfolio of iconic brands." He also noted that while the objectives of the separation remain relevant, the board found that the cost and complexity of splitting into two companies, combined with softer business performance, made it difficult to benefit from a separation.
In his statement, Fisher also said the company has learned from the process and intends to, “operate Gap Inc. in a more rigorous and transformational manner that empowers our growth brands, Old Navy and Athleta, and appropriately focuses on profitability for Banana Republic and Gap brand." Alongside the announcement of the nixed plans, the company revealed that Neil Fiske, president and CEO of the Gap brand, is departing.