Old Navy Sailing Along
Gap Inc.’s fourth quarter numbers look pretty
good and that, in large part, is due to the increased contribution the
company is getting from its Old Navy apparel chain. The low price apparel
division, which grew same-store sales three percent in the fourth quarter,
has been reenergized in the past year, according to a Wall
Street Journal report, after making the decision
to focus its marketing on young moms rather than teenagers.
Old Navy was among
those companies receiving high marks in a Retail Advertising and Marketing
Association (RAMA) survey conducted by BIGresearch that polled consumers
on their favorite commercials for the holiday season. The chain, which ranked
sixth among retailers for television spots, was also among the favorites
for best online promotions.
The chain, which represents 37 percent of
Gap Inc.’s sales, has also benefited from the rollout of a new format.
The company announced yesterday that it would remodel 200 stores this year
on top of 52 units already operating with the concept.
Last June, according
Merchandising and Store Design, Gap Inc. CEO
Glenn Murphy, said, “The new layouts create a better experience for our
customers that better captures the unique energy that’s central to Old
Navy’s fun personality."
Chief Financial Officer Sabrina Simmons told the Journal that
expanding the concept to more stores will “be a big win for us.”
Discussion Questions: What do you think are the keys to
Old Navy’s recent success? Are the changes implemented by the chain enough to
keep it growing for the long term?
- Gap Looks Abroad for New Sales, Profit
Gains – The Wall Street Journal
- Gap to Remodel 50 Old Navy Stores – Visual
Merchandising and Store Design
- Gap Inc. Reports Fourth Quarter Earnings
Per Share Up 50 Percent – Gap Inc.