Gap to spin off Old Navy as stand-alone company

Gap on Thursday announced plans to split into two publicly traded companies, putting Old Navy on a stand-alone path apart from the company’s other brands.

Old Navy will become its own company, distinct from a yet-to-be-named company made up of the Gap, Athleta, Banana Republic, Intermix and Hill City. In a statement, Gap Chairman Robert Fisher said that after a review of the company by its board of directors, it was clear that Old Navy’s business model and customer base had diverged from the Gap’s other specialty brands.

“Each company now requires a different strategy to thrive moving forward,” Fisher said.

As part of the separation, Gap shareholders will receive a proportional stock distribution and own equal shares of both Old Navy and the new company. The deal is set to be completed in 2020 and must receive final approval from Gap’s board of directors.

Gap’s president and CEO, Art Peck, will stay at the helm of the new company. Sonia Syngal, Old Navy’s president and CEO, will lead that franchise.