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- Gap Inc.’s sales grew in the fourth quarter thanks to strong sales at its Old Navy brand.
- Old Navy has become the parent company’s saving grace. While Gap Inc. has struggled in recent years, Old Navy has seen positive same-store sales growth for the past five years.
- The store has a cult following of price-conscious customers who choose it over Gap because of its lower prices.
Old Navy is Gap’s saving grace.
In Gap Inc.’s fourth-quarter earnings, reported Thursday, same-store sales were up 5% overall at Gap Inc. This growth was driven by Old Navy, which was up 9% in the quarter. The company’s namesake brand, on the other hand, showed flat growth compared to the year before.
Old Navy has become Gap Inc.’s sweet spot. While its parent company has struggled in recent years, Old Navy has seen positive same-store sales growth for the past five years.
The growth at Old Navy is not specific to any one section of the store. “Old Navy had a super strong fourth quarter,” Gap Inc CEO Art Peck said on the earnings call. “It was very diversified and was not relying on any one horse to pull the cart.”
We visited a Gap and an Old Navy store in one of New York’s busiest shopping areas — Herald Square — on a rainy Thursday afternoon last May, and we saw firsthand why Old Navy is resonating well with customers:
We timed our visit to Old Navy with the start of Memorial Day weekend sales. The first thing that struck us was the amount of clothing and accessories that were on sale.
Business Insider/Mary Hanbury
The store was awash with signs offering discounts ranging from 20% to 60% off.
There were also several clearance sections around the store.
Business Insider/Mary Hanbury
Even before discounts, however, Old Navy was still much cheaper than Gap.
Business Insider/Mary Hanbury
A basic women’s cardigan cost $ 24.94 at Old Navy. At Gap, it was $ 49.95 (on sale for $ 25 with the Memorial Day weekend discount).
See the rest of the story at Business Insider
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