Gap: scraps Old Navy spinoff
(CercleFinance.com) - Gap said that it has cancelled plans to separate its Old Navy family apparel brand into a standalone public company.
In a statement late on Thursday, the company said that the cost and complexity of splitting into two companies, combined with softer business performance, limited ability to create value.
The US fashion retailer had planned to separate its "accessible" fashion essentials brand through a spin-off that was intended to generally be tax-free for shareholders.
Now, citing better-than-anticipated promotional levels over the holiday period, particularly at Old Navy, the company said it expects its adjusted fiscal year 2019 EPS to be "moderately above" its previous guidance range of 1.70 dollar - 1.75 dollar.
Its shares jumped over 5% in pre-market trading on this news.
Gap plans to report its fourth-quarter earnings on 27 February.
Copyright (c) 2020 CercleFinance.com. All rights reserved.