Why Old Navy Is Opening 60 Stores Amid a Brick-and-Mortar Downturn

Old Navy is bucking retail’s doom-and-gloom trend and opening more than 60 new stores in 2018.

The lower-priced brand has been a bright spot in parent company Gap Inc.’s portfolio in recent years, posting consistent growth even as Banana Republic and Gap have stumbled. The brick-and-mortar openings will bring Old Navy’s total count up to more than 1,000 and, along with Athleta’s new locations, will balance out closures elsewhere in the company for an expected net total of about 25 new stores this year, according to its most recent earnings report.

By comparison, J.Crew closed more than 50 stores last year and will be in the red again for 2018 despite plans for 10 new Madewell doors.

“Investing in Old Navy’s retail presence is central to our continued growth and delivering a seamless brand experience, wherever and however customers choose to shop,” said Old Navy president and CEO Sonia Syngal. “We are fueling all the ways our customers want to engage with us, starting with providing greater access to our brand through new store openings and remodeling hundreds of locations to underscore the fun, fashion and value for the whole family that only Old Navy can offer.”

Old Navy’s strengths include its discount price point — a pair of full-price sandals can be had for $24.99, compared with $44.95 at the Gap — which appeals to the same shoppers that are driving growth at off-price retailers T.J. Maxx and Ross Stores and an assortment managed largely by responsive technology, allowing the company to minimize inventory risk and maximize sales.

For fourth-quarter 2017, the brand posted comparable sales of 9 percent, boosting Gap Inc.’s overall same-store-sales figure to 5 percent. Its next earnings report is expected May 17.

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