Old Navy chief departs as Gap Inc leans on Gap brand's revival

Gap Inc reported a slip in second-quarter sales and confirmed a change in leadership at Old Navy, its largest and historically most important banner. The company trimmed its full-year sales forecast slightly but raised its outlook for earnings per share, suggesting cost discipline and mix improvements are offsetting softer top-line growth.

The leadership change at Old Navy comes as the division's sales falter again, a reversal after a period of stabilisation. Retail Dive reported that the Gap brand itself, once written off after years in the doldrums, has become the standout performer within the portfolio, a notable shift for a company whose fortunes have long been tied to Old Navy's mass-market scale.

The divergence between Gap's revival and Old Navy's renewed struggles illustrates how differently positioned brands within the same house are faring in a cautious consumer environment. Gap's comeback has been built on sharper design collaborations and marketing that reconnected the brand with younger shoppers, while Old Navy's value proposition faces more direct pressure from off-price and fast-fashion competitors squeezed by tariff-driven cost inflation.

For the wider apparel sector, the results reinforce a pattern seen elsewhere this earnings season: portfolios with multiple brands are seeing sharply uneven performance, rewarding those that have invested in brand relevance over pure value positioning. Investors will watch whether Old Navy's new leadership can arrest the slide before the holiday quarter, when the banner's scale makes it disproportionately important to Gap Inc's overall results.

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