Old Navy sales are down 27% through March at stores being opened at least 1 year. Christine Chen analyst at Needham & Co told Reuters that the reason for the dramatic downturn in sales can be attributed to the fashion forward collection released by Old Navy this Spring. Chen states that:
“(The Old Navy customer) doesn’t want boring basics either, but when they try to become too fashion forward it doesn’t work. It doesn’t work at any of their (Gap Inc’s) chains.”
Todd Oldham’s collection for Old Navy is set to debut later this year and the silver lining at Old Navy is that margins are increasing. In addition, analysts are praising the fact that Old Navy has moved away from deep discounts and are losing customers that were trained to look for markdowns. While the pricepoints are still slated to be lower than the Gap stores, the company is holding the line when it comes to deeper discounts.