But while Gap's performance has languished in recent months, analysts said Gap Inc.'s Banana Republic and Old Navy units have enjoyed strong sales with their spot-on targeting of the trendy demographic. Analysts say other stores that have come out on top of this movement include Abercrombie and Fitch, American Eagle, bebe and The Limited. They're definitely serving a niche. That rise marked bebe's 12th consecutive quarter of double-digit same stores sales growth. Although its clothes are not as flamboyant as bebe's, the Banana Republic stores have also found a target market.
Banana Republic has fashionable weekend wear, and they're doing it at a lot of value.
Gap Inc.'s Old Navy stores have also been wildly successful, offering high-quality basics and trendier items at affordable prices. But the success of Banana Republic and Old Navy has left Gap Inc.'s flagship store at loose ends. With its emphasis on basics like khakis and cotton T-shirts, Gap's performance has languished in recent months compared to its trendier Banana Republic and Old Navy divisions. You have Old Navy taking the younger, more price-sensitive part of the demographic, and Banana Republic taking the older, more affluent part. Gap Inc. doesn't release sales figures for its individual units, but Robertson Stephens' Kloppenberg expects Gap's percentage of Gap Inc.'s total sales to slip this year to 36.2 percent, compared with 42.3 percent in 1998.