Old Navy commands a fleet of more than 1,025 family clothing stores throughout the US and Canada, offering items under its own brand name at discounted prices. (The apparel retailer also operates a Web-based store at oldnavy.com.) Products include men's, women's, and children's (even dogs') apparel and accessories. Founded in 1994, Old Navy is owned by the king of casual apparel Gap Inc. and is known for advertising that plays up the kitsch factor of various celebrities. Old Navy, which has suffered from sales declines in recent years, appears to be back on track, and has extended its brand to include maternity and women's plus-size apparel, as well as accessories and personal care products.
The performance of Old Navy is critical as the budget chain accounts for about 40% of its parent Gap's total sales. Indeed, in fiscal 2011 (ends January) Old Navy rang up $5.9 billion in sales vs. $5.7 billion for Gap. Old Navy's sales grew by 2% in 2011 vs. the previous year, with a same-store sales gain of 2%. The modest overall gain reflected a smaller store base (the chain has reduced its store count by about 40 locations over the past two years), flat sales in the US, and a 10% increase in Canadian sales. Online sales were up more than 12%, due in part to the launch of an e-commerce site in Canada in 2010.
To attract more customers, Old Navy is remodeling its tired looking stores. By the end of fiscal 2011 the chain had remodeled about a quarter of its store base. The retailer is also relying on social media and music, including a spring 2011 ad campaign rooted it music, to increase sales.
Under president Tom Wyatt Old Navy has returned to its roots as a fun, family value brand. Assisting Wyatt is Chief Creative Officer Nancy Green, who in 2010 was tapped to guide the product strategy for the Old Navy brand. Now that Wyatt has left the business in early February 2012, Green and EVP of stores and operations Tom Sands will share the president's duties, while Old Navy searches for a new skipper.
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