Shares of apparel retailer Gap gained more than 3.4% after a report by The Wall Street Journal in which the company unveiled plans to enter the beauty and personal care sector.
The move marks a significant shift for the clothing chain as it looks beyond its traditional apparel base to tap into one of retail’s most resilient categories.
Starting this fall, Gap’s Old Navy brand will introduce expanded beauty assortments across its stores, including products under the Old Navy label, WSJ said.
The range will feature skin care, makeup, hair products and nail polish, with most items priced under $25.
Strategy shift under CEO Richard Dickson
The plan highlights a new direction under CEO Richard Dickson, who took charge in August 2023 after a stint at Mattel.
Dickson said Gap needed to stabilize its struggling apparel business before pursuing growth in adjacent categories.
With sales now improving across divisions, the company is seizing opportunities in beauty and accessories.
“We have the credibility with consumers to start to venture into categories adjacent to our core,” Dickson said in an interview.
Gap-branded stores will begin selling beauty products next year, starting with fragrances.
Gap joins brands like Chanel, Kohl’s in tapping into the beauty boom
While Gap is a late entrant, many peers have already leaned into the beauty boom.
Luxury houses like Chanel and Louis Vuitton, as well as mall-based brands including Abercrombie & Fitch and Urban Outfitters, have expanded into cosmetics and personal care.
Mass retailers have also invested heavily — Kohl’s houses Sephora outlets in its stores, while Target’s collaboration with Ulta Beauty initially drew attention before the two decided to unwind the tie-up.
For Gap, the push is backed by Dickson’s personal experience in the sector.
Early in his career, he worked as a beauty buyer at Bloomingdale’s and co-founded Gloss, an online cosmetics retailer later acquired by Estée Lauder in 2000.
Old-Navy branded products, E.l.f, TonyMoly to constitute beauty range
Roughly 150 Old Navy stores will expand their checkout lanes with a wider variety of beauty items, while about 45 outlets will dedicate shop space for beauty staffed by advisers.
Products will include Old Navy-branded body mist, lotions and washes, alongside third-party brands such as Mario Badescu, E.l.f., and Korean names like TonyMoly and Mixik.
Old Navy already carries a limited range of products like Burt’s Bees lip balm, but beauty contributes little to its $8.4 billion in annual sales.
A company survey indicated strong potential, with 70% of Old Navy customers expressing interest in buying beauty products from the chain.
Why a foray into beauty?
Beauty represents a lucrative category with better margins than apparel and enduring demand from younger consumers.
The US beauty and personal care market is forecast to reach $129 billion in 2025, up nearly 4% from last year, according to Euromonitor.
Gap’s pivot underscores its effort to capture that growth while diversifying beyond clothing, as it seeks to re-establish itself as a relevant player in US retail.
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