Gap Inc (NYSE: GPS) recently saw its CEO step down amidst weakening sales and supply chain issues. However, our consumer transaction data shows that while some brands within Gap Inc’s portfolio—Old Navy and its namesake brand Gap—saw their U.S. sales decline year-over-year in Q2 2022, other brands like Athleta, Banana Republic, and Banana Republic Factory experienced positive growth. Our analysis shows that in addition to year-over-year sales growth, these three brands experienced increases in average quarterly sales per customer compared to before the pandemic.
Among Gap Inc’s (NYSE: GPS) brands, Banana Republic and Banana Republic Factory saw the most U.S. sales growth in Q2 2022
Among Gap Inc’s brands, Banana Republic and its discounted equivalent, Banana Republic Factory, experienced the most year-over-year sales growth in Q2 2022. Banana Republic saw its U.S. sales increase 25 percent year-over-year in the most recent quarter, while Banana Republic Factory saw 20 percent year-over-year growth in the same period. This may have been driven in part by workers gradually returning to offices and opting for dressier clothing options rather than athletic wear, which gained in popularity during the pandemic lockdowns.
Notwithstanding, Athleta, Gap Inc’s athleisure brand, also experienced year-over-year growth in Q2 2022, with U.S. sales up 7 percent compared to Q2 2021. Meanwhile, Old Navy and Gap saw their U.S. sales in Q2 2022 decline 16 percent and 18 percent year-over-year, respectively. Janie and Jack, a children’s clothing brand, and Intermix, a luxury apparel brand, were sold by Gap Inc to private equity firms in 2021 and were excluded from this analysis.
Sales per customer generally grew at Banana Republic and Banana Republic Factory during the pandemic
Transaction data shows that customers at Banana Republic and Banana Republic Factory spent more on average in the second quarter of 2022 compared to the same quarter in the previous year. In Q2 2022, the average U.S. sales per customer was $197 at Banana Republic and $109 at Banana Republic Factory, up 46 percent and 22 percent year-over-year, respectively.
Both companies also saw growth in average quarterly sales per customer compared with the same period before the pandemic. Between Q2 2019 and Q2 2022, Banana Republic’s average sales per customer grew 47 percent, while Banana Republic Factory’s grew 32 percent.
Interestingly, while the average sales per customer increased at both brands, U.S. customer counts did not. In Q2 2022, Banana Republic saw 15 percent fewer U.S. customers than in Q2 2021. The decline in customer counts at Banana Republic is even steeper compared to Q2 2019, as it attracted 21 percent fewer shoppers in Q2 2022. Meanwhile, Banana Republic Factory’s U.S. customer counts remained relatively consistent in Q2 2022, both on a year-over-year basis and compared to Q2 2019.
Athleta saw fewer shoppers in Q2 2022 than the year before, but significantly more than pre-pandemic
Similar to Banana Republic, Athleta saw fewer U.S. customers in Q2 2022 than the year before. Between Q2 2021 and Q2 2022, Athleta’s customer counts decreased 3 percent.
However, Athleta’s U.S. customer counts remain elevated compared to the pandemic, with Q2 2022 attracting 64 percent more shoppers than Q2 2019. Athleta experienced strong increases in customer counts between Q3 2020 and Q2 2021, when year-over-year customer counts grew 60 percent on average each quarter, as many U.S. customers sought comfortable clothes to wear while working from home during the peak of the pandemic.
Athleta’s average U.S. sales per customer in Q2 2022, at $215, was higher than Banana Republic’s and Banana Republic Factory’s. Among these brands, Athleta’s average quarterly spend per customer grew the least, both on a year-over-year basis and compared to Q2 2019. Between Q2 2021 and Q2 2022, Athleta’s average sales per customer grew 10 percent, while between Q2 2019 and Q2 2022, average sales per customer grew 3 percent.
A flurry of new initiatives and possible Athleta spin-off
Gap Inc introduced a number of activities to accelerate the company’s growth as part of the “Power Plan 2023” strategy launched in October 2020. Some more recent initiatives announced by the company included closing a number of Gap and Banana Republic locations and opening new Old Navy stores. Internationally, Gap Inc is closing a number of its stores across Europe, ramping up digital operations in European markets via joint-venture franchise partnerships, and opening five new Athleta stores in Canada.
Gap Inc also launched baby and athletic categories at Banana Republic and is planning to open its first Athleta outlet stores. Athleta has also been seen as a possible spin-off candidate. Meanwhile, Old Navy, a company that was also reportedly considered for a spinoff from Gap Inc, gained a new CEO.
Bloomberg Second Measure launched a new and exclusive transaction dataset in July 2022. Our data continues to be broadly representative of U.S. consumers. As a result of this panel change, however, we recommend using only the latest post in assessing metrics, and do not support referring to historical blog posts to infer period-over-period comparisons.