Jan. 16 (UPI) -- Clothing retailer Gap announced on Thursday that it no longer plans to spin off its Old Navy brand into a separate company.
Robert Fisher, Gap interim president and CEO, cited the cost of the separation and poor performance by the stores as reasons behind the decision.
"While the objectives of the separation remain relevant, our board of directors has concluded that the cost and complexity of splitting into two companies, combined with softer business performance, limited our ability to create appropriate value from separation," he said.
Gap announced the plans to split Old Navy into its own publicly traded company in March and group its other brands -- Gap, Athleta, Banana Republic, Intermix and Hill City -- into NewCo, the placeholder name for the other company, in order to allow each company to optimize its cost structure by focusing on its specific business needs.
"The work we've done to prepare for the pin shone a bright light on operational inefficiencies and areas for improvement," Fishier said Thursday. "We have learned a lot and intend to operate Gap Inc. in a more rigorous and transformational manner that empowers our growth brands, Old Navy and Athleta and appropriately focuses on profitability for Banana Republic and Gap brand."