Gap Made a Smart Decision in Calling Off Its Old Navy Spinoff

Gap (NYSE: GPS) has called off its plans to spin off its Old Navy brand from the parent company and its iconic namesake brand.

That makes sense, given that the separation was always of questionable value to shareholders. Yes, it would have put Old Navy in a better place financially with it not having to support its sister brand, but the two smaller companies would have been less resistant to the same changing consumer demand that has, at the moment, made Gap less popular.

"The plan to separate was rooted in our commitment to value creation from our portfolio of iconic brands,"  said interim Gap CEO Robert Fisher in a press release.

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Source Fool.com