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Gap Inc., parent company of Gap, Banana Republic, Old Navy, and Athleta, saw 2% sales growth overall in the most recent fiscal quarter, with growth spearheaded by Old Navy and Athleta. It was the seventh consecutive quarter of positive comparable sales growth for the company.
Old Navy is the most successful of the Gap brands, with comparable sales up 5% this quarter. So far in 2018, Old Navy has opened 28 stores and completed 85 remodels. CEO Art Peck announced in an earnings call on Thursday that Old Navy will be launching a plus size collection, which was previously only available online and in select stores.
Meanwhile, Gap's comparable sales slipped 5%, in large part because it offers a lot of what Old Navy does for a higher price. Old Navy is able to prevail over Gap and the other Gap Inc. brands, in part, because it sells similar styles to Gap at a lower price point. When we visited Gap recently, we noticed a lot of sale signs, a small variety of products, and generally high prices.
We recently visited an Old Navy, and saw why it's doing so well.
Denim was the first thing in the store. Everything was 30%.
Denim was also lining a wall to the right of the entrance. There was more to choose from then at Gap, and it was less expensive. Each pair cost $39 before the discount.
Old Navy had a huge variety of styles throughout the store, as it was clearing out summer inventory to make way for fall.
Most of the prices were pretty low — a striped t-shirt like this cost over $30 at Old Navy's sister store Gap, but only $15 at Old Navy, plus it was 50% off at Old Navy. The quality wasn't much different than Gap.
Old Navy's women's department was huge, and had a lot of variety in everything from t-shirts to business casual clothing.
There was also a lot of workout gear...
...and a ton of inexpensive accessories.
Old Navy had a lot of accessories, shoes, belts, and small products like hand lotion and face masks. Everything was under $20, with the exception of some shoes.
The lower level was divided between menswear, which had similar prices and deals to the women's department...
...and a huge clearance section that had a little bit of everything for under $10. Almost every style in the store was in the clearance section as well.
Old Navy carries everything — men's, women's, children's, accessories, and soon plus size — that Gap does, at the same quality, and for a lower price. After visiting the store it's clear why the brand is the main reason for Gap Inc.'s continued growth.
