GAP and Old Navy announce plan to separate into independent companies
Date Posted: Monday 4th March 2019
GAP Inc has announced its plans to create two independent publicly traded companies: Old Navy, a category-leader in family apparel, and a yet-to-be-named company (“NewCo”), which will consist of the iconic GAP brand, Athleta, Banana Republic, Intermix and Hill City. GAP Inc. expects to effect the separation through a spin-off that is intended to generally be tax-free to GAP Inc.’s shareholders for U.S. federal income tax purposes. The spin-off will enable each company to maximize focus and flexibility, align investments and incentives to meet its unique business needs and optimize its cost structure to deliver profitable growth. Both companies will have experienced leadership teams, well suited to lead these organisations on their separate, defined paths.
GAP Inc.’s current President and Chief Executive Officer, Art Peck, will hold the same position with NewCo after the separation. Following the separation, Sonia Syngal, current President and Chief Executive Officer of Old Navy, will continue to lead the brand as a standalone company.
After the separation, NewCo and Old Navy are expected to be appropriately capitalised with sufficient cash to support planned operating and investment plans.
NewCo will be based in GAP Inc.’s current headquarters and Old Navy will remain at its current headquarters, both located in San Francisco.