Gap has ditched its plans to separate its subsidiary Old Navy from the rest of the group – which includes Gap, Old Navy and Banana Republic.
Despite first revealing plans to break up the fashion group last year to “revitalise” the company, resulting in 230 store closures worldwide, the US retailer has now said the “cost and complexity” of the plans are not worth pursuing.
Gap’s head of brand Neil Fiske will also be stepping down just two months after chief executive Art Peck left the business.
Gap said its stock price rose 16 per cent a day after the plans were first announced as investors welcomed the initiative.
However, the retailer’s weaker operating results spurred the change of course.
Gap’s like-for-like sales fell four per cent during its fourth quarter compared with the same period the previous year.
Gap chair Robert Fisher said the original plan “remains relevant” and the preparation work done “shone a bright light on operational inefficiencies”.