On his company’s first-quarter conference call with analysts, Arthur Peck, The Gap’s CEO, said Athleta continues to be an “exceptional performer” and remains “one of our key growth brands.”
The other expanding brand is Old Navy. Gap also owns Banana Republic and the flagship Gap chain.
Gap doesn’t break out results of Athleta but Peck said, “It’s positioned in a growing segment. It has strength across the vectors of brand equity, product, experience and talent. And it’s not just store growth, but growing categories.”
He added, “The active space and particularly the intersection of performance and lifestyle, which is where Athleta is kind of uniquely positioned. It continues to be at above average growth segment for the market.”
He also noted that 60 percent of Athleta’s bottoms program are on quick-response and the chain is able to “put units into the business against demand signals very, very quickly, and that is part of what is fueling in our growth.” Peck noted that many of Athleta’s competitors in the active space are largely dependent on wholesale and require a much longer time to react to changing trends. Said Peck, “So especially in performance lifestyle, it allows us to be reactive to fashion trends, which matters in that segment.”
Peck declined the quantify the growth potential for Athleta except to say, “What I would say is, I see a very long runway of growth in front of us. Part of it is store count, part of it is just continuing overall to be an attractive segment of the market that is growing faster than the whole. And frankly, part of it is the fact that Athleta’s business is not insignificant really in the core of lifestyle and ready-to-wear, despite the fact that every piece of clothing in an Athleta store has some aspect of performance associated with it. So it is a differentiated innovative offer that has a very large market that it can tap really into the whole of her closet. So, we’re very bullish on the growth opportunity in front of us.”
Athleta closed the first quarter with 132 stores, opening one in the quarter, and its square footage amounted to 600,000 square feet. Overall, The Gap’s Other segment, which includes Athleta and Intermix, had sales of $203 million in the first quarter against $179 million in the same period a year ago, a gain of 13.4 percent. Intermix opened one store in the quarter to close with 43 and had 100,000 square feet.
Photo courtesy Athleta
