Can Old Navy Disrupt Athleisure? | Fast Five Shorts

Old Navy headline number five.

Old Navy is reportedly set to launch a new freestanding Athleisure format later this year under the sub brand name Old Navy Sport.

According to wwd, Old Navy Sport is expected to include leggings, sweats, sports bras and T shirts.

And Old Navy declined to comment in response to the story.

And Gap Inc. Said only in response that we don't comment on rumor or speculation.

End quote.

I always love when I see that for context.

Gap Inc. Has said Old Navy is the nation's fifth largest retailer by athleisure volume.

The competitive set spans from mass value to ultra premium.

And Old Navy is betting it can own the accessible end of the market.

More deliberately, the tension inside Gap Inc. Has got to be palpable because as many of you know, the company already owns Athleta, a premium activewear brand with its own store footprint and a different customer base.

Old Navy Sport, by contrast, is described as targeting a value oriented consumer with accessible price points.

John Buy or sell Old Navy Sport, becoming a legitimate disruptor in the Athleisure market.

I'm going to hold, I'm going to hold on this one.

I, you know, I think I like certain things about it.

I like the diversification play.

I like, you know, maybe there, there's an opportunity, you know, there's a, there's a, an opening or Gap right now, like on the budget, friendly, accessible portion of this market.

So I think that there is definitely some potential here.

The thing that I, that I question is the, just the approach, you know, they're basically, you know, branding as an Old Navy, you know, you know, with branding and does that play, you know, and I look at you like, okay, they went with the athletic, you know, was one way to grow into a certain part of the, part of the market.

You know, here they're trying to create a new format or potentially spin off on their brand.

I think about other concepts and like I said, I work a lot in the, in the restaurant space.

You had McDonald's and you had Cosmics.

You know, Cosmics was trying to break off into a little bit of the, you know, the specialty beverage, you know, space.

There's no reason why you would think that McDonald's, with their scale and their success and, you know, their sophistication that they shouldn't have been able to be successful with that, but they just failed to, you know, at the end of the day, gain a lot of credibility with consumers.

So that's where, that's the, where I think the risk is, is that, you know, you're creating a new brand.

You're creating, you know, a new offering in a certain part of the market that maybe it hits with consumers, maybe it doesn't.

So that's why, for me, it's a.

It's an intriguing move.

I understand the rationale behind it, but I think that there is some risk to it.

So would you do it if you were them?

Like, if.

Would you make this move if you were.

If you were Gap in Old Navy?

I'm gonna go and say, no, I would not make this move.

No, this is probably not where I would spend my dollars and resources and kind of thinking about, you know, on, on, on where.

Where to play and kind of how to win.

But, you know, that's.

That's just me.

That's my, that's my.

That's my gut reaction to it.

That's why we do this show.

All right, Jed, do you agree or disagree with John?

Would you make this move?

Finally?

I get to disagree with John.

Yes.

I mean, yes, the category is crowded, but more crowded at the high end.

You think of, like, the Lululemon's Nikes Bre.

Right?

There's.

But I think there's still space in accessible, everyday activewear, and I don't think that competes with Athleta either.

So the risk is really trying to be everything or just becoming a cheaper version of those premium brands.

But I think if they stay focused on a tight assortment, clear positioning and strong execution, there's a real opportunity to scale.

Yeah, I, I'm with, I'm with you, Jen.

No disrespect, John, but I'm with you.

Like, I think I've always loved this idea.

Like, I think, you know, it's, it's part and parcel of Clayton Christensen's disruption theory.

Like, things always gravitate towards the lowest price.

And I thought Fabletics had a right to claim this space, to take this mantle, but they didn't and they haven't.

And, and my question is why?

And so when you hear the numbers that Old Navy's already, like, according to their reporting, who knows how true it is, but they're.

They're the fifth largest athleisure brand in the country.

Like, yeah, then the space is ripe for the taking.

And they have experience also.

Old Navy has.

And Gap has experience, you know, potentially working through the cannibalization factor of higher end brands, but still making a name for themselves in the category.

Because you're right, it's a very distinct.

It's a distinctly different purchase than higher premium, you know, Athletic wear.

So that's one thing I like about it, but the second thing I like about it.

And I'm going to bring producer Ellen on this one, too, because she's going to know where I'm going as soon as I say it.

I think when you factor in the brand power of Gap, particularly and what its CEO, Richard Dixon, also as the leader, can put behind it, you have to factor that into whether or not this can be successful.

Because, Ella, I mean, the new ad campaign sweat like this, I said that to you immediately when I saw that.

That's even before Old Navy Sport.

That thing was so fricking hot.

Like, I mean, it just blew your mind, right?

Like, you and I are watching it together.

Like, this is amazing.

Yeah.

I think my response to you was genius, period.

Yeah.

But it was so good.

And so if you unleash that brand power on what is, to Jen, to your point, an untapped market that no one has really laid claim to, I think there's a win there.

But, Jen, what do you think?

Close us out?

Yeah.

I mean, I worked with Richard back in the day, so I. Oh, wow.

He's incredible.

So if there's anybody who can do it, it's him.

And I think he's going to make a play and making a name for Old Navy in a similar fashion, but also after families.

Gap and Old Navy both have the ability to go after family.

So you get that athleisure, breadth and depth.

That's hard to say, right?

Yeah, it's a mouthful, especially at this hour, but you get that breadth and depth right across the family.

And I think that's also an amazing play versus some of the other brands that we discuss, which tend to skew a little bit older or adult oriented or just are a little bit, you know, given the macroeconomic situation that we were talking about, that's expensive to buy all of that athleisure for a family.

So I think it's the right play.

And again, I'm really happy that I get to have a counter to John's perspective on this one.

It's always good.

We get the debate going, too.

All right, Jen, I've got to ask you, because I didn't know that.

So.

What?

What?

Because I've heard a lot of good things about him as well.

What makes him so special as a leader?

I think he's a visionary.

You know, what he did with Barbie was pretty impressive.

And.

And I was excited when I heard that he was taking on this responsibility at Gap Inc. And so I think we'll see a lot more from him in the future.

Yeah.

That's awesome.

That's great to hear.