Image Courtesy of Gap Inc.
September 4, 2025
Will Gap’s Move Into Beauty and Personal Care Be Successful?
The crowded beauty and personal care segment is about to see another entrant into the space. According to a Sept. 4 press release, Gap intends to enter the market this year, also expanding its existing accessories business while doing so.
Citing its resilience and a more sure financial footing, Gap indicated that — with momentum on its side — it was seeking to capitalize on a market (worth more than $100 billion in the U.S. as of 2025, per Euromonitor) it saw both quickly growing and resistant to contemporary macroeconomic headwinds.
“Gap Inc. sees a clear and meaningful opportunity to expand into this category with plans for a phased launch, starting with an initial test-and-learn expression at Old Navy later this fall. This will include 150 Old Navy stores featuring a curated assortment of beauty and personal care products, with select stores offering dedicated shop-in-shops and Beauty Associates,” the company wrote.
“In 2026, the company plans to seed to scale its Old Navy beauty business, as well as launch brand-right expressions across the portfolio,” it added.
Gap Stock Rises, Expansion Signals New Direction
Perhaps as a result of the announcement of its expansion plans, Gap stock rose modestly — up nearly 5% as of 12:30 p.m. ET — with the effort being part of a new direction ushered in by CEO Richard Dickson, as Invezz reporter Vatsala Gaur outlined.
Dickson, who took the helm at Gap in August 2023 following a period overseeing the reinvigoration of several core properties with Mattel, emphasized the importance of stabilizing its embattled core apparel business before targeting growth in nearby categories.
Now, however, with Gap showing wide-ranging sales growth, the beauty, personal care, and accessories segments seem a sensible next step for the apparel retailer. Gaur quoted Dickson on the subject:
“We have the credibility with consumers to start to venture into categories adjacent to our core,” Dickson said.
Bolstering this play: An internal survey reportedly indicated that 70% of existing Gap customers were interested in buying beauty items from the retailer.
Private Label and Third-Party Brands To Share Shelf Space, But Competition Exists
According to Gaur, some of the ~150 Old Navy stores to play host to the beauty and personal care sales experiment will see products near checkout lanes, while a smaller group of about 45 locations will have dedicated space for the category, along with beauty advisors on hand.
Private label Old Navy-branded body mist, body wash, and lotions will be sharing shelf space with third party products coming from brands such as E.l.f., Mixik, TonyMoly, and Mario Badescu.
However, Gap is a bit late to the party. Kohl’s has had Sephora store-in-store placements for some time now, and Target made an effort to pair up with Ulta Beauty in a deal which eventually unraveled. High-end retailers such as Chanel and Louis Vuitton have already moved into the beauty and personal care business, as have Gap’s direct competitors Abercrombie & Fitch and Urban Outfitters.
On the other hand, as Gaur highlighted, Dickson has a history in the segment, having served as a beauty buyer for Bloomingdale’s in addition to co-founding Gloss — an online cosmetics retailer which was acquired by Estée Lauder in 2000. This experience could serve to give Gap a competitive edge in the days to come.
Discussion Questions
Will Gap’s move into the beauty and personal care business be successful? Why or why not?
Is the beauty and personal care segment overcrowded as-is? How can Gap differentiate itself from competitors in this space?
How valuable will Dickson’s previous experience in beauty be for Gap as it attempts to break in to this market?
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Old Navy already sells a limited range of beauty and wellness products in some stores, usually in the serpentine queue line where shoppers pick them up on impulse. This isn’t a major source of revenue relative to apparel, but it does drive incremental sales. That suggests a more serious expansion at Old Navy and an introduction at Gap could be effective; after all, there is a natural synergy between fashion and beauty. However, to generate meaningful returns, the space must be highly productive. That requires careful curation of brands and products to ensure relevance. There also needs to be some differentiation as beauty is an already crowded category with plenty of choice in where to shop.
You have a point of the definition of “success”… furthering the incremental sales vs stand alone stream (requiring its own store space; marketing).
Success also depends on the store traffic stability. (Online sales would be a constant juggle of shipping & returns).
Gap is coming to the cosmetics party late, but it seems this party shows no signs of slowing down. The natural connection between fashion and beauty products is obvious, but it’s a crowded and competitive market. Having leadership with bona fide cosmetics chops is noteworthy, but there’s no guarantee of success. I appreciate Gap’s test and learn approach to this. I’d advise them to carefully monitor their cosmetic product SKU-level conversion rates to really understand demand signals. Gap is still a recovery in progress, and this move makes good sense, so it has the makings of a meaningful strategic move. As for the cosmetics category…when Home Depot decides to offer cosmetics in their stores, then we’ll know it’s gone too far 😉
As mentioned in the article, Gap isn’t the first retailer to expand into new products. And customers of Gap who already trust their products. It has been proven that competing retailers have achieved success with private-label beauty and personal care products. While it might be nice to differentiate themselves from competitors in the space, for now, they should focus on getting existing customers to try their products.
If they have something meaningful to add to the zillion-and-one other PC products they’ll do well; if not…well then then they’ll just be the zillion-and-second.
I’m hardly impressed by the stock movement: over the past five years it’s shown the same pattern as the previous twenty – that’s a quarter century if you’re keeping count – it’s been all over the place… “Never tanked” is the upbeat take, “never went anywhere, either” the less so.
I can see the logic – they have a loyal customer base and credibility to try adjacent categories – but beauty and personal care is crowded. If shoppers are open to trying their products, they might very well toss them in their basket. But this feels more like an impulse add-on than a traffic driver, so success will likely come down to having the right display and product mix.
Gap is leveraging its core strength: understanding the fashion and lifestyle customer journey. On the surface, beauty may appear overcrowded, but it’s fragmenting into micro-segments while simultaneously demanding scale for supply chain efficiency. They’re beta-testing whether their customer data and store economics can create a sustainable business model for beauty. If Gap can manage the inventory turn economics, then the higher margins could offset the apparel’s promotional periods. With dedicated space and advisers in a small 45-store pilot, execution will be key to success, which, if it fails, will signal deeper organizational capability issues that no amount of beauty products can fix.
Lifestyle… that is an opportunity to shift the merchandising away from checkout-aisle-impulse. Change the randomness into purpose.
Old Navy currently has apparel edits for: Halloween, NFL, Sleep, Occasion/party, to be followed by Winter/cold, travel/getaway, college, etc.
Each could lend itself to products (broad, repeat self care + a dash of holiday/trend/fun). Products could be introduced in context of the lifestyle.
What portion of beauty and personal care purchases are planned replenishment versus impulse? I can’t speak from experience, but I’m guessing this is a product category with high to very high loyalty relationships? So how is Gap going to steal market share? Sounds like an ambitious project but also a project that deserves to be tested. If Kohl’s and Target can be in the business, I can see why Gap wants to give it a shot.
My guess is that Dickson’s prior experience in this category will be no small factor in the ultimate success. He will have probed all the obvious and nuanced pitfalls. He will have a keen sense of the competitive horsepower he is up against. But this equation offers incremental sales and profits and a fun opportunity for the various Gap divisions to offer some distinction and differentiation. This is a great move. Beats the hell out of selling apparel out of garbage bags on the sales floor.
Yes, classier than garbage cans as fixtures!!
But Kohl’s and Target had the pure benefit… rub off (& assumed traffic) of separate sought-after beauty brands.
Gap Inc.’s move into beauty and personal care—starting with a test launch in 150 Old Navy stores this fall, followed by broader expansion in 2026—could very well succeed, provided it’s executed smartly. The category’s value and resilience (market size exceeding $100 billion in the U.S.) make it an attractive arena for growth .
It is a crowded space, but Gap has levers for differentiation: curated mixes of own-label and trendy third-party brands; value pricing under $25; immersive shop-in-shops with beauty advisors; and natural synergies with its fashion core. Neil Saunders’ insight is worth noting: If you curate carefully and drive relevance, beauty can fuel incremental sales—even from the checkout lane .
Richard Dickson’s beauty background—from founding Gloss to being a beauty buyer—gives Gap a strategic edge few fashion peers can claim. Combined with its renewed brand momentum and strong financial footing, Gap’s beauty initiative is more than plausible—it’s compelling.
I’m OK with their personal care business being offered in Neil’s serpentine queue line, where shoppers pick them up on impulse. But who would go to Gap specifically for beauty and personal care products?
I see the temptation- high margin items, lots of impulse purchases, there is some opportunity here. That said, my bias has always been for retailers to stick to their knitting when it comes to brand and assortment. Gap won’t ever be a destination for HBA, but as a side offer, as Neil has mentioned, worth a try. I would strongly suggest, however, that they not try to pour a ton of resources into this project if it’s slow to take off or not meaningful for their customers. This is a good place to be nimble.
Selling private label fragrances, lotions and cosmetics in the Old Navy checkout queue is a no-brainer.