Old Navy Bets Big on Denim for Turnaround

Gap Inc. experienced a disappointing Q2, with overall sales falling short of projections primarily due to underperformance at Old Navy. Old Navy's comparable sales saw a 4% decrease, prompting a leadership change and a strategic shift towards becoming a 'denim destination.' This new focus on denim, a historically strong category, is being amplified by recent marketing efforts, including a Cardi B-featured campaign that has seen significant traffic improvements in August. The brand is also collaborating with creator MrBeast for its back-to-school promotions.

Meanwhile, Athleta, Gap Inc.'s smallest brand, is also in turnaround mode with another double-digit drop in comparable sales. The activewear brand has launched a new fall campaign to kickstart a broader marketing revamp, emphasizing bolder purpose-driven narratives and distinct visual storytelling. Investments in social media and partnerships with agencies specializing in brand transformations are key components of Athleta's strategy. The namesake Gap brand, however, continues its positive momentum, marking its eleventh consecutive quarter of sales growth with a 10% increase.