Gap Inc. said Thursday that one of the companies would contain Old Navy. The other company yet to be named will include Gap, Banana Republic and other brands, including Athleta.
"It is clear that the business model and Old Navy customers have become increasingly differentiated from our specialty brands," said Gap board chairman Robert Fisher. He said that every business "now needs a different strategy to thrive and move forward".
The Gap was once the coolest brand in retail: it had a commercial boom in the mid-twentieth century, and its logo-turtleneck sweatshirts and collars won over everyone from teens to moms, to by Sharon Stone.
But the brand has lost touch with baby boomers who have grown up in the brand and has failed to attract the Millennials who lead the fashion trends today.
Gap announced Thursday that Sonia Syngal, CEO of Old Navy, would continue to manage this brand. Art Peck, CEO of Gap, will lead the other company.
This is a story in development.