The company had announced back in February of 2019 that it was planning to separate the two companies, under former CEO Art Peck.
Peck had unveiled plans to split off its better-performing Old Navy brand and told investors it, as well as the closure of around 230 specialty stores over the next two years, would result in annualized sales losses of $625 million and a pre-tax charge of as much as $300 million.
“The plan to separate was rooted in our commitment to value creation from our portfolio of iconic brands,” said Robert Fisher, Gap interim president and chief executive officer. “While the objectives of the separation remain relevant, our board of directors has concluded that the cost and complexity of splitting into two companies, combined with softer business performance, limited our ability to create appropriate value from separation.”
Jeff Marks, senior portfolio analyst with Action Alerts PLUS, weighed in on the news.
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