At a moment when affordability is becoming the key factor determining where people shop, Old Navy—Gap Inc.’s value-focused spinoff launched in 1994—has hit the skids. The Gap brand has performed worse than Old Navy since corporate revenues peaked at $16.7 billion in fiscal 2021; Gap dropped 14 percent through 2025 versus Old Navy down 5 percent over the same period. Yet, Gap Inc.’s fate hinges on getting Old Navy back on track. It alone accounted for 56 percent of last year’s total $15.4 billion in revenues.
Will yet another new CEO save Old Navy? And the answer is: Old Navy’s pattern when things are going the wrong direction is to hire a new CEO—four in the last 10 years—this time Gap CEO Dickson is looking to the entertainment sector to revitalize the brand.
New Captain for a Drifting Ship
It’s another quarter of disappointing Old Navy sales that are up a mere 1 percent in the first quarter, followed by a 4 percent drop in the second quarter. Traffic slowed, and the women’s summer assortment missed the mark. Mothership Gap finally posted a 10 percent gain in the consecutive quarters. In an all-hands-on-deck move, Gap Inc. CEO Richard Dickson announced a “planned leadership transition” at Old Navy during the latest earnings call. On the news, Gap Inc. shares jumped 12 percent, even after corporate second-quarter net sales slipped 2 percent to $3.7 billion.
Even under new leadership, Old Navy followed its familiar playbook: Kick out the CEO and try someone new (four CEOs in 10 years). As of November 2, current CEO, Haio Barbeito, will move into an executive advisor role, and Michael Francis will take the helm. Francis joined Old Navy in March as chief customer officer, so he has a short head start on addressing the brand’s challenges.
Francis brings an impressive resume, including nearly 27 years at Target that ended in 2011, a C-suite strategic advisor, and two-time interim CMO at Walmart. He also brings entertainment experience with DreamWorks Animation and Big Shot Pictures. And that’s the Dickson trigger point; he is an entertainment guy at heart.
Francis’ remit is clear: “Strengthen its relevance, accelerate growth, and deliver even greater value for customers,” Dickson stated. Francis added that he intends to “build on the momentum already underway,” whatever that means.
Old Navy Is Missing What Gap Found
After the post-pandemic crash when Old Navy sales dropped from its 2021 high of $9.1 billion to $8.2 billion in 2022 and stayed there during 2023, things started to improve, rising 2.4 percent in 2024 and 3 percent in 2025. OK, it’s not groundbreaking, but respectable for a retailer of its size. It’s been holding steady at around 1,250 stores over those years.
The flagship Gap brand, by contrast, dropped further—from $4.1 billion in fiscal 2021 to $3.3 billion in 2024—but then snapped back with a 5 percent rise to $3.5 billion in 2025. Currently, it boasts 11 consecutive quarters of positive comp growth. Dickson credits Gap’s resurgence to a clear strategic formula: bigger ideas, stronger storytelling, and culturally relevant narratives that deepen customer engagement. He also emphasized that Gap’s momentum is “broad-based,” cutting across all major categories as “customers continue to respond positively to our more elevated product aesthetic.”
That’s precisely what’s missing at Old Navy. Dickson acknowledged the brand’s missteps after conducting a thorough review of the business. “We have a clear understanding of where our execution fell short and have moved quickly to strengthen our plans,” he said. But the fixes he outlined were largely product-centric, such as denim, activewear and beauty, rather than the kind of expansive brand-level storytelling that’s powering Gap’s revival. It’s pretty reasonable to assume that Francis will be the new storyteller, but is storytelling enough?
The only big idea Old Navy has been touting is its national launch of Old Navy Beauty Co. But this move raises more questions. While beauty may lift average ticket sales, it’s unlikely to make Old Navy a destination; Ulta and Sephora can relax. TRR’s Dana Wood is more positive about Old Navy beauty than I am, but on this one point we both agree: Old Navy has lost its relevancy and meaning by establishing ONBC as a separate brand, it only muddies the waters further.
Caught in a Doom Loop
A recent study from Gartner describes a useful way to think about the state of Old Navy: a “Brand Doom Loop.” Gartner clarifies that a brand enters the doom loop when it underinvests in brand strategy, often by conflating brand strategy with marketing strategy. “Most organizations still treat the brand as a marketing asset, limiting its impact on business strategy and growth,” co-author Julie Reees explains, adding, “CMOs must elevate brand concerns beyond marketing to influence the product and commercial decisions that make up the company’s value proposition.”
Old Navy’s recent messaging illustrates the point. Back in 2022, when Gap Inc. announced Barbeito’s appointment as CEO, Old Navy was described as “rooted in fun, family, fashion and value,” with its unique value proposition built on “style, fit, quality and cultural relevance at jaw-dropping prices.” That’s energetic, meaningful, and unmistakably brand aligned.
Compare that to the Francis announcement. There’s plenty of praise of Francis’ accomplishments—”His experience building iconic brands, cultivating customer connections, and driving transformation at scale will help Old Navy strengthen its relevance, accelerate growth, and deliver even greater value for customers,” said Dickson. Francis talked about strengthening the cultural relevance of Old Navy as an “iconic American brand,” without any clear explanation of what that relevance actually is. Instead, the release is self-congratulatory—bragging that Old Navy is the number one specialty apparel brand—with nothing about how it got there or what makes it special.
Here’s the evidence of this doom loop: Old Navy is losing track of what the brand is at its core, reducing it to just another merchant of affordable fashion. Pinning hopes on beauty is not a culturally resonant, exciting value brand. While beauty at Old Navy is not as off brand as Banana Republic’s ill-fated launch into home décor and furnishings in 2023, establishing beauty as a standalone brand ultimately distracts from the hard work needed to restore Old Navy’s core.
What Made Old Navy Great in the First Place
Brands in their mature growth phase, as John B.R. Long describes in his book Hire Without Ego, are especially vulnerable to the brand doom loop. Maturity typically results in two paths a brand follows:
- The path Old Navy is on: “Stasis followed by irrelevance into a potentially excruciatingly painful decline.”
- Characterized by Jeff Bezos’ Day 1 philosophy, where the inventiveness, urgency, and energy of a startup are preserved even as it scales.
To be clear: Old Navy’s move into beauty isn’t reinvention — it’s dilution. A mature brand adding tangential categories without fixing its core may help it hold on a little longer, but ultimately it only accelerates the doom loop.
The good news is that Old Navy doesn’t need to reinvent the brand. It needs to return it to what made it great in the first place, focusing on that fun, family-focused place to shop for style, with fit and quality at amazing prices. Originally conceived as a sister brand to Gap, it surprised the industry by overtaking the flagship business with a distinct, defensible, unforgettable value proposition. Regrettably, it’s lost much of that over the years.
GlobalData’s Neil Saunders diagnoses the problem: Old Navy is missing the critical must-have style advantage. “Because this problem has been embedded in the business for a while, we think it is reducing visit frequency, which may now make it challenging for the brand to rebuild quickly.” But the problem goes deeper than that. Old Navy can’t blame the overall market for its declining performance. Through July, clothing and fashion accessories retail is up nearly 6 percent year over year. The truth is more foundational: Old Navy isn’t giving customers enough reasons to visit and buy. The brand was once compelling and unforgettable; today it is too easily overlooked.
Perhaps a new CEO can fix what’s broken at Old Navy; it’s their predictable approach. But it surely won’t be a quick fix. Until then, Old Navy remains caught in a downward spiraling brand doom loop—and each passing twist makes it harder to climb back out.
