Gap is in trouble; spinning off Old Navy up in the air
Perhaps more troubling, Gap said that sales at Old Navy stores open at least a year slipped 4% during its most recent quarter compared with the same period a year earlier. For investors, the lack of a clear succession plan atop Gap and weakness at Old Navy are signs of trouble. "Weaker results at the [Old Navy] business reduce the upside potential to the value of a standalone entity," Dana Telsey, analyst at Telsey Advisory Group, said in a note to clients Friday. Old Navy, born in 1994, has been the top prize in Gap's often inconsistent brand portfolio. Old Navy reached $1 billion in annual sales in its first four years by hawking trendy, low-priced clothes.