Gap Will Split Into Two Listed Companies.

Gap Inc. (GPS) is splitting the fast-growing low-end brand Old Navy from other businesses to create two publicly listed companies.

The split plan is both a recognition of the different fortunes of the two clothing chain corporation and a reflection of the loss of the strong control of American consumers in the past.

Over the years, Old Navy has been better than sister brand cape and Banana Republic in terms of lower prices and attractive marketing.

Old Navy currently generates more revenue than cape and Banana Republic, which accounts for almost half of the parent company's US $16 billion 600 million sales in 2018.

Nowadays, many consumers are unwilling to spend 80 dollars on buying a pair of jeans, forcing the brand to rely heavily on promotions and price reductions.

The company's market share was also taken away by fashion chains such as H&M and Zara.

At present, the market value of Cape has dropped from a peak of about $40 billion in 2000 to less than $10 billion.

Since its peak, the basic elements of clothing have been evolving. Now many consumers prefer sports friendly fabrics instead of denim.

In order to revive the brand of the same name, he closed the store, replaced the leadership and updated the product lineup.

In 2018, the same store brand sales of Gapu had dropped by 5%, and the company announced on Thursday that it plans to further close 230 stores in the next two years.

In 2018, Old Navy same store sales increased 3%.

Art Peck, CEO of Cape, will continue to manage the parent company.

The parent company will include cover brand, Banana Republic, Athleta, Intermix and new sports brand Hill City.

The parent company will be renamed with an annual income of about $9 billion.

Old Navy chief executive Sonia Syngal will be responsible for the operation of a new company that is spun out. The annual revenue of the new company is about $8 billion.

Robert Fisher, the chairman and founder of Cape Pu, said the measure was evaluated by the board.

In a statement, he said it is clear that over time, the business model of Old Navy and the differences between customers and the company's professional brand are growing.

The Fisher family controls about 1/3 of the company's stock.

The company's goal is to complete the deal in 2020, he said.

After the disclosure of the above news, the price of cap Pu rose 25% to $31.80.

The stock market has been underperforming in recent years. The regular trading session on Thursday was $25.40, compared with $34 a year ago.