Big changes for The Gap

Gap Inc. signage is displayed in front of a store in San Francisco, California, U.S., on Tuesday, May 15, 2012. The Gap Inc. is scheduled to release first-quarter 2013 earnings on May 17. Photographer: David Paul Morris/Bloomberg via Getty Images

American apparel retailer The Gap is preparing for some extreme business changes. The group is preparing to divide itself into two separate retailing companies, which will be in full effect as of 2020.

The split will see Old Navy separate from a yet to be named second retailers which will include Gap, Athleta, Banana Republic, Hill City and Intermix. This overhaul is a part of the brand’s strategy to outrun their recent issues. The Gap has closed 68 of their stores in the past year, leaving them at 41 percent of their total fleet. They are also experiencing more closures up to and beyond the separation of 2020.

Teri List-Stoll of Gap Inc. released a comment regarding these closures and the upcoming split. “It has become increasingly clear that our balanced growth strategy, while successful in building necessary capabilities in areas like supply chain and digital capability that are important to a scaled operating platform, no longer effectively supports the diverging needs of Old Navy versus our traditional speciality brands,” she explained. “Now is the right time for us to take the next step on our journey to both ensure the competitiveness of our brands and to deliver shareholder value.”

The brand has expressed that with this split will come a focus on their online sectors as well as a great deal of attention on the brands’ consumer overlap.

With an additional 230 Gap branded stores expected to be closed in the next two years, it is uncertain as to whether this move will be a resurgence for the brand or the nail in their coffin.