Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (2024)

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Old Navy was founded in 1994 in Colmar, California, with the aim to bring cheaper fashion to the masses. Old Navy was named after a café and bar in Paris located on Boulevard Saint-Germain, which has since closed. It originally started as a Gap Warehouse, which sold overstock and off-season Gap products at a discount before former CEO Mickey Drexler opted to create a new brand. Drexler was partially inspired due to pressure from competitor Dayton Hudson Corp. — then-owner of Target and Mervyn's — which had formerly announced plans to create a discount chain that functioned as a cheaper version of Gap. Within just a year, Old Navy had 59 stores around the country. By 1997, the brand became the first retailer to hit $1 billion in annual sales in less than four years. Old Navy stores were designed to be significantly larger than Gap stores, in order to provide more of a value-store feel. Building upon Old Navy's early success, the company looked to partner with celebrities and build out advertising campaigns. Before long, the Old Navy name was everywhere. Also in 1997, Old Navy began airing the first of its traditionally quirky television commercials, starring fashion editor Carrie Donovan. These would set the tone for campaigns over the decades. In the coming years, Old Navy would feature many popular stars of the time, including twins Tia and Tamera Mowry in a 1999 performance fleece commercial. In 2000, Old Navy hit its first bump in the road. The company reported declining sales as a result of a strategy that neglected its over-30 shoppers. Despite the troubles, Old Navy continued to eye expansion. In 2001, the brand opened 12 stores in Canada. In 2004, Old Navy celebrated a decade in business. By then, Old Navy had become known as a one-stop shop for the entire family. In the mid-2000s, Old Navy continued to raise its profile with the help of celebrities. Stars including Betty White came out en masse to a series of high-profile events helping the brand to elevate its image. Pete Wentz and Ashlee Simpson did, too ... ... as did Jessica Biel ... ... and Arianna Huffington, among others. Old Navy also teamed with notables like Mark Wahlberg on charity events like a 2006 effort with the Boys & Girls Club. In 2005, Old Navy began offering plus sizes, expanding its customer demographic. Over the course of the early 2000s, Old Navy became the go-to place for items like multi-colored bargain flip flops ... ... as well as fun fuzzy socks. Old Navy has also long been beloved for its Fourth of July apparel. Old Navy also increased its visibility by sponsoring major cultural events like the American Music Awards. Old Navy hit another slump as a result of the 2009 financial crisis and recession, joining many other retailers in a period of sales declines. In 2012, Old Navy appointed Stefan Larsson as president. He has widely been credited with revitalizing the brand. That same year, Old Navy opened its first store in Japan, marking the beginning of a major expansion in Asia. Old Navy was once again at its peak, leading the way for Gap as its most profitable and successful brand. In February 2019, Gap announced plans to spin off Old Navy into an independent company. However, in the subsequent months, Old Navy began to join its sister brands in showing signs of struggle. On January 16, Gap announced it would halt its plans to spin off Old Navy, citing "cost and complexity." Though Old Navy won't operate as an autonomous company in the future, it still holds an important place in the hearts of American shoppers. FAQs

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Retail

Bethany Biron

2020-01-23T18:50:44Z

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (1)

Though Gap reversed its decision to spin off its Old Navy brand last week, the brand remains beloved among Americans, outfitting families for nearly three decades.
We took a look at the rise of Old Navy, starting with its founding as a low-cost alternative to Gap and the quirky celebrity-filled ads that propelled it to popularity.
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Since its founding as a low-cost alternative to Gap in 1994, Old Navy has evolved into a beloved American brand.

The company skyrocketed in popularity in the late 1990s and 2000s, becoming synonymous with its quirky ad campaigns and low-cost styles for the entire family. From its multi-colored flip flops and its Fourth of July screen-printed T-shirts, Old Navy has solidified itself as a go-to retailer across consumer demographics.

For several years, Old Navy has been Gap's golden child and top performing brand, so much so that Gap announced plans to spin off the brand into an autonomous company in 2019. However, last week Gap officials announced that it was halting the split, citing "cost and complexity" as the reason for the reversal.

Still, Old Navy remains an integral part of the American retail industry. We took a look at its rise over the years.

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Old Navy was founded in 1994 in Colmar, California, with the aim to bring cheaper fashion to the masses.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (5)

"We didn't take ourselves too seriously, and we broke the industry's rules," the Gap Inc. corporate page says of its Old Navy brand. "We said fashion didn't have to be just for rich people — it could be for everyone."

Old Navy was named after a café and bar in Paris located on Boulevard Saint-Germain, which has since closed.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (6)

Source: Gap Inc.

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It originally started as a Gap Warehouse, which sold overstock and off-season Gap products at a discount before former CEO Mickey Drexler opted to create a new brand.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (7)

Source: Funding Universe

Drexler was partially inspired due to pressure from competitor Dayton Hudson Corp. — then-owner of Target and Mervyn's — which had formerly announced plans to create a discount chain that functioned as a cheaper version of Gap.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (8)

Source: Funding Universe

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Within just a year, Old Navy had 59 stores around the country. By 1997, the brand became the first retailer to hit $1 billion in annual sales in less than four years.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (9)

Source: Gap Inc.

Old Navy stores were designed to be significantly larger than Gap stores, in order to provide more of a value-store feel.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (10)

In its early days, Old Navy stores were designed to be twice as large as Gap stores, and they had an industrial aesthetic.

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Building upon Old Navy's early success, the company looked to partner with celebrities and build out advertising campaigns.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (11)

Before long, the Old Navy name was everywhere.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (12)

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Also in 1997, Old Navy began airing the first of its traditionally quirky television commercials, starring fashion editor Carrie Donovan. These would set the tone for campaigns over the decades.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (13)

Source: The New York Times

In the coming years, Old Navy would feature many popular stars of the time, including twins Tia and Tamera Mowry in a 1999 performance fleece commercial.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (14)

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In 2000, Old Navy hit its first bump in the road. The company reported declining sales as a result of a strategy that neglected its over-30 shoppers.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (15)

Despite the troubles, Old Navy continued to eye expansion. In 2001, the brand opened 12 stores in Canada.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (16)

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In 2004, Old Navy celebrated a decade in business.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (17)

By then, Old Navy had become known as a one-stop shop for the entire family.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (18)

Advertisem*nt

In the mid-2000s, Old Navy continued to raise its profile with the help of celebrities. Stars including Betty White came out en masse to a series of high-profile events helping the brand to elevate its image.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (19)

Pete Wentz and Ashlee Simpson did, too ...

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (20)

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... as did Jessica Biel ...

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (21)

... and Arianna Huffington, among others.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (22)

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Old Navy also teamed with notables like Mark Wahlberg on charity events like a 2006 effort with the Boys & Girls Club.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (23)

In 2005, Old Navy began offering plus sizes, expanding its customer demographic.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (24)

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Over the course of the early 2000s, Old Navy became the go-to place for items like multi-colored bargain flip flops ...

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (25)

... as well as fun fuzzy socks.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (26)

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Old Navy has also long been beloved for its Fourth of July apparel.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (27)

Old Navy also increased its visibility by sponsoring major cultural events like the American Music Awards.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (28)

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Old Navy hit another slump as a result of the 2009 financial crisis and recession, joining many other retailers in a period of sales declines.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (29)

Source: CNN Business

In 2012, Old Navy appointed Stefan Larsson as president. He has widely been credited with revitalizing the brand.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (30)

Larsson used his background at H&M to bring in more fashionable styles similar to the fast-fashion model.

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That same year, Old Navy opened its first store in Japan, marking the beginning of a major expansion in Asia.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (31)

Old Navy was once again at its peak, leading the way for Gap as its most profitable and successful brand.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (32)

Advertisem*nt

In February 2019, Gap announced plans to spin off Old Navy into an independent company.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (33)

Source: Business Insider

However, in the subsequent months, Old Navy began to join its sister brands in showing signs of struggle.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (34)

Advertisem*nt

On January 16, Gap announced it would halt its plans to spin off Old Navy, citing "cost and complexity."

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (35)

Source: Business Insider

Though Old Navy won't operate as an autonomous company in the future, it still holds an important place in the hearts of American shoppers.

Gap canceled its spinoff of Old Navy, but it's still one of America's most beloved brands. Here's a look at its rise to be a retail powerhouse. (36)

Source: Business Insider

FAQs

Why did Gap unbundle Old Navy? ›

Robert Fisher, interim CEO and son of Gap Inc.'s founders, said in a statement that “the cost and complexity of splitting into two companies, combined with softer business performance, limited our ability to create appropriate value from separation.” Wall Street analysts agreed.

Discover More ›

Why is the Old Navy successful? ›

“Old Navy is reasserting its position as the style authority in the value space, with a combination of storytelling and pricing with wow prices in-store and online,” Dickson said. “Old Navy's brand acceptance scores for quality, impression and reputation are strong, giving us confidence.”

See Details ›

What are some interesting facts about Old Navy? ›

Old Navy had campy television ads featuring Carrie Donovan, Morgan Fairchild, and the mascot Magic, the dog. The Old Navy division grew quickly; in 1997, it became the first retailer to pass $1 billion in its first four years in business, and opened 500 stores by 2000.

Read The Full Story ›

Who is the founder of the Old Navy? ›

Mickey Drexler

Old Navy / Founder

Find Out More ›

What is the sister company of Gap and Old Navy? ›

The company operates four primary divisions: Gap (the namesake banner), Banana Republic, Old Navy, and Athleta. Gap Inc. is the largest specialty retailer in the United States, and is 3rd in total international locations, behind Inditex Group and H&M. As of early 2023, Gap employs about 95,000 people.

View Details ›

Why did Gap lose popularity? ›

Once known as a staple American mall brand, Gap lost its relevance among consumers who traded shopping centers for e-commerce. As mall traffic declined, so did Gap's sales.

Tell Me More ›

Why is Gap Inc. struggling? ›

Enduring Hard Times. The apparel maker is struggling to compete against fast fashion companies like Shein, Uniqlo, and H&M. The company has been late to fashion trends, botched rollouts, and often resorts to profit-killing discounts to clear inventory consumers won't buy at full price.

Discover More ›

Is Gap's turnaround finally working? ›

This spring, Gap Inc.'s long losing streak finally ended. In late May, the company reported that all four brands in its portfolio had seen growth in quarterly comparable sales for the first time in seven years.

Get More Info Here ›

How are Gap and Old Navy different? ›

Gap discounts nearly everything in the store, threatening margins, and ultimately making shoppers less likely to pay full price. It also offers a lot of the same styles and quality clothing as Old Navy, but for a higher price.

Get More Info ›

Who manufactures Old Navy clothes? ›

Where Does Old Navy Make Its Clothes? Old Navy manufactures its clothes in countries including China, Bangladesh, Vietnam, Indonesia, India, and Sri Lanka. You can find a full list of the countries The Gap, Old Navy's parent company, sources its clothes from here.

Keep Reading ›

What is the culture of Old Navy? ›

At Old Navy, we believe that everyone is family, that we are better together, that we all belong. We believe in the democracy of style, and a world of equality & opportunity, for everyone.

View Details ›

Does Gap own Banana Republic? ›

Gap Inc. acquired Banana Republic in 1983.

Who is the new face of Old Navy? ›

For Natasha Lyonne, comfort and style go hand in hand. The Poker Face star — who fronts Old Navy's newest campaign, launching today — knows how to turn it up for a red carpet or a night out, but always in something that makes her feel confident and completely herself.

Learn More ›

What is The Gap controversy? ›

Gap Apologizes For 'Racist' Ad

Apparel maker Gap on Tuesday has apologized for an image used in an ad that some critics said was racially insensitive. The ad in question depicts four young girls that are part of Le Petit Cirque, a traveling circus company that features boys and girls between the ages of 5 to 14.

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Why is it called Old Navy? ›

Drexler, president of Gap Inc. since 1987 and CEO since 1997, happened upon the name "Old Navy" on the marquee of a bar in Paris in the early 1980s. A decade later he was on the verge of opening a new venture under the name Gap Warehouse when he remembered passing that bar in Paris.

Know More ›

Why did Gap choose to rebrand? ›

While the third logo lasted for almost 25 years, in 2010, Gap hired Laird and Partners to update their logo for the third time. This decision came after a decline in revenue, so Gap thought that redesigning its logo could get sales back on track.

Why did Gap CEO step down? ›

Gap Inc. president and CEO Sonia Syngal is leaving the apparel retailer effective immediately after just a little over two years at the helm.