Make your money go further for just 25p per day

PREMIUM

Gap: growth stock at a value price

03/07/2019 · Gap Inc (GPS) 

Investment Ideas Retail US

Gap store front on high street with shoppers rushing past

Gap is displaying all the classic signs of a retailer in trouble: dwindling sales and not enough exposure to e-commerce. After becoming a staple of the high street in the 1990’s, the company now appears to be falling out of fashion. But management has a big plan to turn things around which could benefit investors buying in at the current multi-year lows. Read on to find out why we’re excited by the strategy. 


US fashion chain Gap Inc (US: GPS) is still a fixture in shopping centres and high streets around the UK. But shares in the firm have fallen by nearly 60% over the last five years, as it struggles with retail sector headwinds and company-specific problems.

Management now plan to split the company in two to try and revitalise the group's portfolio of brands, which include Banana Republic and ‘athleisure’ brand Athleta. The faster-growing Old Navy discount brand will be spun out into a separate business, while the remaining Gap brands will be grouped together and (hopefully) revived.

With Gap shareholders set to receive shares in the new Old Navy business, this could be an opportunity to buy a growth stock at a value price.

Has this fashion pioneer run out of ideas?

When Gap launched in 1969, the firm's target customer base was 12 to 25 year olds. Early stores sold just two things, music and jeans, with a focus on the iconic Levi…

Continue reading this article…

Enjoy FREE access to the top news and insights from the investment world and our introductory finance guides.
  • Informative guides
  • Unique podcasts
  • Financial news and political insight
Gain access to all our excellent content for just £90 per year, that’s just 25p per day for financial freedom.
  • In depth coverage of many of the world’s great companies
  • Breaking news on potential upcoming disasters
  • Unique insights from our top research team

Have your say

Log in or register to view or add comments.

For access to the top news and insights from the investment world

REGISTER FREE TODAY

Become a Champion Investor for as little as £3.20 per report or get a year's worth of money-making analysis for just £90.

SUBSCRIBE NOW

More on Gap Inc

Gap: growth stock at a value price

03/07/2019 · Investors Clinic

Gap is displaying all the classic signs of a retailer in trouble: dwindling sales and not…


More Investors Clinic

Daily Mail vs New York Times: which newspaper makes a better investment?

How are the housebuilders coping with the UK property market?

Dear FCA, it’s time to act

09/07/2019