Should Gap do for Old Navy what Dayton’s did for Target?

Earnings reports are out for Gap Inc, and they don’t look good. The flagship brand (Gap) continues to plod along. Banana Republic isn’t doing much better, but at least growth is positive. Athleta is growing…but only because you could fall out of bed and make money in athleisure (analysts say that brand is playing it way too safe to grow if the market softens).

But discount brand Old Navy? For another quarter, Old Navy comes to the rescue. Sales are up. Loyalty is strong. Awareness is off the charts.

The analysts don’t seems to be saying this, so I will. A couple of decades ago, department store giant Dayton’s realized that it was what was holding back growth at its discount chain – Target. By separating itself, it could allow Target to grow into a powerful (and increasingly resurgent) competitor to Walmart (and now Amazon). Meanwhile, it could arrange a merger/sale with the Macy’s chain to allow it to become more competitive.

I believe it’s time for Gap to break itself apart. It is not stronger together.

#marketing #brandstrategy

RetailDive has a great article outlining the backstory and financial data, but stops short of teh obvious conclusion.

Jason T Voiovich

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