Old Navy and Gap are splitting into two companies. We visited both stores, and realised why one company is dominating the other.

Business Insider/Jessica TylerOld Navy and Gap each had plenty of sales, but the deals were much better at Old Navy.

  • Gap Inc. on Thursday announced it was splitting Old Navy off into its own publicly traded company.
  • The Gap brand has recently struggled to keep up with Old Navy, which has become the most successful of the Gap Inc. brands.
  • In late 2018 we shopped at both Old Navy and Gap.
  • We discovered why Old Navy had been carrying Gap Inc. before the brand spun off as its own company.

Old Navy is splitting from the Gap.

Gap Inc. on Thursday announced it would be splitting the retail company into two publicly traded companies – Old Navy and a yet-to-be-named company that will consist of the Gap brand, Athleta, Banana Republic, Intermix, and Hill City.

Recently, Old Navy has been spearheading Gap Inc.’s growth as its namesake brand struggles to keep up.

Gap discounts nearly everything in the store, threatening margins, and ultimately making shoppers less likely to pay full price. It also offers a lot of the same styles and quality clothing as Old Navy, but for a higher price.

“We are clearly not satisfied with the performance of Gap brand. We know this iconic brand is important to customers, and we are committed to taking the bold and necessary steps to ensure that it delivers value to shareholders,” Gap Inc. CEO Art Peck said in the company’s earnings release in November.

In late 2018, we shopped at Gap and Old Navy. We saw for ourselves why one store was helping Gap Inc. while the other is hurting it.


The first store we went to was Gap, in New York’s Financial District. There were two large 50%-off signs in the entryway.

Business Insider/Jessica Tyler

Women’s clothing was on the first floor.

Business Insider/Jessica Tyler

There were a lot of plain sweaters for sale …

Business Insider/Jessica Tyler

… but they weren’t cheap. Most sweaters cost around $US60, and a lot of the styles seemed to be very similar to each other.

Business Insider/Jessica Tyler

It wasn’t just the sweaters that were pricey. A pair of pants cost $US70.

Business Insider/Jessica Tyler

However, a ton of women’s clothes were on sale for $US20.

Business Insider/Jessica Tyler

And many basics were on sale for even less than that.

Business Insider/Jessica Tyler

Luckily for shoppers, nearly everything in store was 50% off when we visited.

Business Insider/Jessica Tyler

Although the sales are good for shoppers, they are threatening margins at Gap and ultimately making shoppers less likely to pay full price when the sales go away.

Business Insider/Jessica Tyler


Read more:
Gap is doubling down on one of retail’s deadliest mistakes


The back of the first floor carried sleepwear, bras and underwear, slippers, and sweatshirts.

Business Insider/Jessica Tyler

There was also activewear, although half of the department was just lightweight coats. There wasn’t very much activewear to choose from.

Business Insider/Jessica Tyler

There was a sale rack reading “$US11.99 & up,” but the first thing I pulled off the rack was $US89.95.

Business Insider/Jessica Tyler

The clearance prices didn’t seem much cheaper than the original prices in most cases.

Business Insider/Jessica Tyler

Downstairs was a men’s section that had similar prices …

Business Insider/Jessica Tyler

… and similar sales offering 50% off, or clothes for $US25.

Business Insider/Jessica Tyler

There were some sweaters and jackets …

Business Insider/Jessica Tyler

… and a wall of denim. Most jeans were around $US70 before the 50%-off sales.

Business Insider/Jessica Tyler

The men’s section was a bit smaller than the women’s, and it didn’t have a ton of variety to offer in terms of style and colour.

Business Insider/Jessica Tyler

Upstairs was a children’s department. The prices were almost the same as the women’s clothing on the first floor.

Business Insider/Jessica Tyler

There was a sales rack in the back of the kids’ department …

Business Insider/Jessica Tyler

… and a few shirts for as low as $US9.

Business Insider/Jessica Tyler

While the store was pleasant to shop at, and there were a lot of sales, many products were very expensive, even after taking 50% off. Some sections of the store also felt very repetitive.

Business Insider/Jessica Tyler

We then went to an Old Navy in New York’s Flatiron District.

Business Insider/Jessica Tyler

There were just as many sale signs as at Gap.

Business Insider/Jessica Tyler

But prices were much lower to begin with.

Business Insider/Jessica Tyler

Denim, prior to sales, was generally below $US40 at Old Navy, and above $US60 at Gap. Even though Gap’s sales were steeper than Old Navy’s, prices were still lower at the latter.

Business Insider/Jessica Tyler

Old Navy also sold a lot of similar sleepwear and basics. However, a plain long-sleeved shirt was $US15 at Gap, and just $US6 at Old Navy. There wasn’t a noticeable quality difference.

Business Insider/Jessica Tyler

The activewear at Old Navy was less expensive, and it seemed more practical.

Business Insider/Jessica Tyler

There were fewer coats and more clothes to actually exercise in.

Business Insider/Jessica Tyler

There were hand lotions, candles, and perfumes. There weren’t as many small products at Gap.

Business Insider/Jessica Tyler

I also noticed a lot more accessories at Old Navy.

Business Insider/Jessica Tyler

Downstairs was a huge men’s department. It was about double the size of the one at Gap.

Business Insider/Jessica Tyler

Denim was on sale for $US15, but it was originally priced at $US30. Even when Gap’s denim was on sale for 50% off, it was still more expensive than that.

Business Insider/Jessica Tyler

There seemed to be a much greater variety of styles available at Old Navy …

Business Insider/Jessica Tyler

… and the clearance sales were much better deals. Most clearance products were under $US20, as opposed to being $US75 or more.

Business Insider/Jessica Tyler

Children’s clothing was upstairs. Prices weren’t terribly different from Gap, though most products were a few dollars cheaper at Old Navy.

Business Insider/Jessica Tyler

The kids’ styles were pretty similar at the two stores.

Business Insider/Jessica Tyler

Overall, Old Navy had a greater variety of styles and lower prices than Gap did. Both stores had the sales that Gap Inc. is known for, but Old Navy’s sales led to better prices. It’s clear why the store is carrying the brand.

Business Insider/Jessica Tyler

Jessica Tyler contributed to an earlier version of this story.

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