Gap to split into two companies

Wall Street Journal has reported that Gap Inc., the parent company of Gap, Banana Republic, Athleta, and Intermix, will be splitting into two publicly traded companies. The companies will now be split into Old Navy and a yet-to-be-named company, which will consist of Gap, Athleta, Banana Republic, Intermix and Hill City. Gap Inc. expects to effect the separation through a spin-off that is intended to generally be tax-free to Gap Inc.’s shareholders for U.S. federal income tax purposes. The spin-off will enable each company to maximize focus and flexibility, align investments and incentives to meet its unique business needs and optimize its cost structure to deliver profitable growth.