Gap Scraps Old Navy Spin-Off; Moderately Raises Its Fiscal 2019 Outlook

Executive Summary

On January 16, 2020, Gap Inc. announced that it had canceled its plans to spin off the Old Navy business.

• Gap cited investors’ concerns regarding the complexity of the Old Navy separation, cash outlay to split the brands and softer business performance, particularly at Old Navy.
• The company raised its fiscal year 2019 outlook moderately, owing to better-than-expected promotional levels over the holiday period.
• Gap also announced the departure of Neil Friske, President and CEO of the Gap brand.