Gap (GPS - Get Report) announced late Thursday night that it's spinning off its Old Navy division.

Old Navy will be run by current brand CEO Sonia Syngal, while the Gap portion of the business will continue to be lead by Art Peck and will include Athleta, Banana Republic and Hill City brands and a projected $9 billion in annual revenues. Gap, however, said it would close around 230 specialty stores over the next two years, a move that would result in annualized sales losses of $625 million and a pre-tax charge of as much as $300 million.

"In Old Navy, we have one of the fastest growing apparel retailers in the United States with the winning business model and an impressive runway for future growth, including capitalizing on opportunities like opening new stores and expanding into new product categories," Peck told investors on a conference call late Thursday. "The stand-alone company will have approximately $8 billion in annual revenue, and we'll be able to capitalize on this scale, broad consumer awareness and unique positioning to drive growth."

Jim Cramer wrote about the split in his morning column over on Real Money Friday morning. 

"I think the company has no choice but to do this in order to return to growth -- and growth is all that really matters to the stock market," Cramer wrote.

Related. Jim Cramer: This Company Divide Is Just What the Gap Needs to Succeed