While Gap is continuing to shrink its presence in malls around the country, Old Navy is doing the opposite.
Setting out her intentions for the 25-year-old Old Navy when it is spun off from Gap Inc. as a separate entity next year, president and chief executive officer Sonia Syngal told analysts at an investor day in New York that she will open an additional 800 stores over an unspecified time period, pushing the total fleet up to around 2,000.
These stores will predominantly be located in smaller towns and are part of Syngal’s plan to transform Old Navy into a $10 billion revenue company.
“We’ll almost double our fleet to 2,000 stores in North America, predominantly in underserved small markets. And we’ll acquire new customers and drive lifetime value, taking that 42 million customer base, growing it through new stores and through online and getting more deeply connected to our customers to unleash the full potential,” she said.
In contrast, Art Peck, the president and ceo of Gap Inc., who will oversee Gap, Athleta, Banana Republic, Intermix and Hill City post-split, has previously laid out plans to shutter 230 Gap stores, mainly in North America, and an unspecified number of Banana Republic stores, although he indicated at the investor day that the Gap number may not be as high.
“One surprise I would say is the degree of the intensity that landlords have with wanting to keep a Gap store in their centers,” he said. “Now there are some centers, we’re leaving. There are some centers we want to be in, but the economics don’t make sense. That can lead us to a conversation about how do we change the terms.”
The investor day gave the executives the opportunity to update analysts on the split, which was first announced in February with the idea being that siphoning off a strong Old Navy will give executives a better chance to revive struggling brands like Gap and Banana Republic.