Gap Inc. (NYSE: GPS) today announced that, following the
completion of the planned spin-off of Old Navy, the new public
company, currently referred to as NewCo, will retain the Gap Inc.
name. The new Gap Inc. will be a portfolio of brands, including Gap
brand, Banana Republic, Athleta, Intermix, Janie and Jack, and Hill
City. The announcement comes as the company wraps-up a week-long
celebration of its iconic Gap brand’s 50th anniversary.
“As we celebrate this milestone anniversary, we have reflected
on the remarkable history of this amazing company and the power and
global influence of the Gap name,” said Art Peck, President and
Chief Executive Officer of Gap Inc. “Over the past 50 years the
credibility and reputation the company has built with the Gap Inc.
name transcends any individual brand.”
“Our brands remain a cultural cornerstone with global
relevance,” Peck continued. “I am optimistic and excited about the
future of the new Gap Inc. Our focus will be on delivering quality
revenue growth, and accelerating profitability and cash flow, while
positively impacting our employees, our shareholders, the
communities in which we do business, and our planet.”
Old Navy will continue to operate under its current name when it
becomes a standalone, publicly traded company. As previously
announced, Sonia Syngal— who has led Old Navy since 2016 — will
continue as the CEO of Old Navy and Art Peck will become CEO of the
new Gap Inc.
Gap Inc. will host an investor event on September 12, 2019 in
New York where Peck and Syngal will provide an update on the
planned separation.
The transaction remains subject to certain conditions, including
final approval by Gap Inc.’s Board of Directors, receipt of a tax
opinion from counsel and the filing and effectiveness of a
registration statement with the U.S. Securities and Exchange
Commission.
Forward-Looking Statements
This press release contains forward-looking statements within
the “safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995. All statements other than those that are purely
historical are forward-looking statements. Words such as “expect,”
“anticipate,” “believe,” “estimate,” “intend,” “plan,” “project,”
and similar expressions also identify forward-looking statements.
Forward-looking statements include statements regarding the
following: future revenue growth, profitability, cash flow,
potential future plans or strategies of the company or the
independent companies following the proposed separation
transaction, the structure, benefits, and completion of the
separation transaction.
Because these forward-looking statements involve risks and
uncertainties, there are important factors that could cause the
company’s actual results to differ materially from those in the
forward-looking statements. These factors include, without
limitation, the following risks, any of which could have an adverse
effect on the company’s financial condition, results of operations,
and reputation: the risk that additional information may arise
during the company’s close process or as a result of subsequent
events that would require the company to make adjustments to its
financial information; the risk that the company or its franchisees
will be unsuccessful in gauging apparel trends and changing
consumer preferences; the highly competitive nature of the
company’s business in the United States and internationally; the
risk of failure to maintain, enhance and protect the company’s
brand image; the risk of failure to attract and retain key
personnel, or effectively manage succession; the risk that the
company’s investments in customer, digital, and omni-channel
shopping initiatives may not deliver the results the company
anticipates; the risk if the company is unable to manage its
inventory effectively; the risk that the company is subject to data
or other security breaches that may result in increased costs,
violations of law, significant legal and financial exposure, and a
loss of confidence in the company’s security measures; the risk
that a failure of, or updates or changes to, the company’s
information technology systems may disrupt its operations; the risk
that trade matters could increase the cost or reduce the supply of
apparel available to the company; the risk of changes in the
regulatory or administrative landscape; the risks to the company’s
business, including its costs and supply chain, associated with
global sourcing and manufacturing; the risk of changes in global
economic conditions or consumer spending patterns; the risks to the
company’s efforts to expand internationally, including its ability
to operate in regions where it has less experience; the risks to
the company’s reputation or operations associated with importing
merchandise from foreign countries, including failure of the
company’s vendors to adhere to its Code of Vendor Conduct; the risk
that the company’s franchisees’ operation of franchise stores is
not directly within the company’s control and could impair the
value of its brands; the risk that the company or its franchisees
will be unsuccessful in identifying, negotiating, and securing new
store locations and renewing, modifying, or terminating leases for
existing store locations effectively; the risk of foreign currency
exchange rate fluctuations; the risk that comparable sales and
margins will experience fluctuations; the risk that changes in the
company’s credit profile or deterioration in market conditions may
limit the company’s access to the capital markets; the risk of
natural disasters, public health crises, political crises, negative
global climate patterns, or other catastrophic events; the risk of
reductions in income and cash flow from the company’s credit card
agreement related to its private label and co-branded credit cards;
the risk that the adoption of new accounting pronouncements will
impact future results; the risk that the company does not
repurchase some or all of the shares it anticipates purchasing
pursuant to its repurchase program; the risk that the company will
not be successful in defending various proceedings, lawsuits,
disputes, and claims; risks associated with the impact, timing or
terms of the separation transaction; the risks associated with the
expected benefits and costs of the separation transaction,
including the risk that the expected benefits of the separation
transaction will not be realized within the expected time frame, in
full or at all, and the risk that conditions to the separation
transaction will not be satisfied and/or that the separation
transaction will not be completed within the expected time frame,
on the expected terms or at all; the expected qualification of the
separation transaction as a tax-free transaction for U.S. federal
income tax purposes, including whether or not an IRS ruling will be
sought or obtained; the risk that any consents or approvals
required in connection with the separation transaction will not be
received or obtained within the expected time frame, on the
expected terms or at all; risks associated with expected financing
transactions undertaken in connection with the separation
transaction and risks associated with indebtedness incurred in
connection with the separation transaction; the risk that
dissynergy costs, costs of restructuring transactions and other
costs incurred in connection with the separation transaction will
exceed our estimates; and the impact of the separation transaction
on our businesses and the risk that the separation transaction may
be more difficult, time-consuming or costly than expected,
including the impact on our resources, systems, procedures and
controls, diversion of management’s attention and the impact on
relationships with customers, suppliers, employees and other
business counterparties. There can be no assurance that the
company’s separation transaction will in fact be completed in the
manner described or at all.
Additional information regarding factors that could cause
results to differ can be found in the company’s Annual Report on
Form 10-K for the fiscal year ended February 2, 2019, as well as
the company’s subsequent filings with the Securities and Exchange
Commission.
These forward-looking statements are based on information as of
August 28, 2019. The company assumes no obligation to publicly
update or revise its forward-looking statements even if experience
or future changes make it clear that any projected results
expressed or implied therein will not be realized.
About Gap Inc.
Gap Inc. is a leading global retailer offering clothing,
accessories, and personal care products for men, women, and
children under the Old Navy, Gap, Banana Republic, Athleta,
Intermix, Janie and Jack, and Hill City brands. Fiscal year 2018
net sales were $16.6 billion. Gap Inc. products are available for
purchase in more than 90 countries worldwide through
company-operated stores, franchise stores, and e-commerce sites.
For more information, please visit www.gapinc.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20190828005756/en/
Investor Relations Contact: Tina Romani (415) 427-5264
Investor_relations@gap.com
Media Relations Contact: Trina Somera (415) 427-3145
Press@gap.com
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