According to the Gap management, the procedure for turning the Old Navy brand into a separate company would be too "complicated and expensive."
About intention highlight Old Navy in a separate company was announced back in March 2019. It was expected that this procedure would allow for a complete restructuring Gap Inc., the cases in which a long time ago are not going well. It was assumed that the young brand will gain independence in the foreseeable future, but in the end something went wrong.
Interim President and CEO of Gap Inc. Robert Fisher stated that in the process of spinning off Old Navy, some facts came to light that "shed a bright light on operational inefficiencies" and showed areas for improvement. As a result, the board of directors considered that the spin-off procedure would cost the company too much, while its effectiveness was questionable. But the revealed facts will allow, as expected, to make the management of the company "more rigid and fundamentally new."
In other words, it was decided once again to restructure the company, without resorting to extreme measures. The company also shared information that Neil Fiske, president and CEO of the Gap brand, will be leaving the company. Fiske's departure is just one of the latest in an ongoing change in executive power at Gap Inc. Earlier, in November 2019, CEO Arthur Peck, who had held his position for the past 15 years, was fired.
The story with Old Navy is classic example when the young brand began to compete too strongly with the parent company. Created in 1994, it eventually surpassed the main Gap brand in all respects. However, the problems of Gap Inc. recently, it has also been touched - in 2019, a decline in sales of Old Navy on 4% was announced.