- Old Navy is spearheading Gap Inc.’s growth.
- Gap Inc. saw flat sales in the most recent fiscal quarter, with the Old Navy brand reporting comparable sales were up 4%.
- We visited an Old Navy store to see why it’s doing so well.
Gap Inc., parent company of Gap, Banana Republic, Old Navy, and Athleta, reported on Tuesday that sales were flat overall in the most recent fiscal quarter, with growth spearheaded by Old Navy and Athleta.
Old Navy is the most successful of the Gap brands, reporting that comparable sales were up 4% this quarter. So far in 2018, Old Navy has opened 24 stores. CEO Art Peck announced in an earnings call in August 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 7% in the third quarter. 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.
We visited the Old Navy in the Chelsea neighbourhood of New York City.
In the entryway was a 75% off sign.
Denim was the first thing in the store. Everything was 30% off.
Denim was also lining a wall to the right of the entrance. There was more to choose from than at Gap, and it was less expensive. Each pair cost $US39 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 $US30 at Old Navy’s sister store Gap, but only $US15 at Old Navy, plus it was 50% off at Old Navy. The quality wasn’t much different than at Gap.
Old Navy’s women’s department was huge, and it 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 $US20, 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 $US10. Almost every style in the store was in the clearance section as well.
Old Navy carries everything — men’s, women’s, children’s, accessories — 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 area of growth for Gap.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.