Gap has been growing at an average annual rate of 3.4 per cent over the last three years. This growth has been driven almost completely by Old Navy, which contributed more than 95 per cent of the revenue growth over this period. Old Navy’s strong revenue growth coupled with a lower tax rate helped the company’s net income margin expand from 4.4 per cent in 2016 to over six per cent in 2018. However, Gap’s iconic brand, Gap Global, continued to struggle. The brand’s revenues over the last three years have fallen at an average annual rate of 5.4 per cent. Gap Global’s contribution to total revenue has gone down from more than 35 per cent in 2016 to about 31 per cent in 2018.

Banana Republic’s revenue is projected to remain flat while Gap Global’s revenue is likely to continue to decline over the next couple of years. Earlier this year, Gap unveiled a plan to split itself into two independent, publicly-traded companies – an independent Old Navy, and a yet-to-be-christened new company that would include a smaller portfolio of niche brands in denim (Gap), upper middle-class fashion (Banana Republic), female athleisure (Athleta), and men’s performance lifestyle (Hill City).