Gap expands into personal care with phased rollout of body and hair care products

USA – GAP, the largest specialty apparel company in the U.S., has reported a strategic expansion into the personal care sector with a phased rollout of skincare, haircare, makeup, and nail polish products, marking a significant expansion from its core apparel business. 

This initiative will begin this fall with a “test-and-learn” launch across 150 Old Navy stores, where select locations will feature dedicated shop-in-shop spaces staffed by Beauty Associates. 

This move comes as Gap seeks to diversify its revenue streams in response to ongoing macroeconomic challenges, including rising tariffs and tempered consumer spending.

The company recognizes the beauty and personal care market as one of the fastest-growing and most resilient retail categories in the United States, projected to surpass USD 100 billion by 2025. 

Looking ahead, Gap plans to extend its beauty offerings to its Gap-branded stores in 2026, starting with fragrance and eventually scaling to broader beauty and personal care expressions across its portfolio. 

Alongside beauty, the company also intends to grow its accessories business, viewing it as a natural extension of its apparel categories that align with shopper lifestyles and behaviors.

This expansion is strategically timed as Gap recently reported growth in comparable sales at its core brands, including Old Navy, Banana Republic, and Gap, despite pressures from tariff costs and a slowdown in discretionary spending. 

The company’s strong performance in these areas provides a solid foundation for its new venture into personal care, with leadership confident that the brand’s credibility and cultural relevance will support gains in this competitive market.

GAP Q2 FY 2025 financial highlights 

GAP has reported its second-quarter fiscal 2025 results, delivering a steady performance with flat net sales of USD 3.7 billion compared to the same period last year, marking positive comparable sales growth for the sixth consecutive quarter. 

The company’s diluted earnings per share (EPS) rose 6% to USD 0.57, up from USD 0.54 a year ago, reflecting improved profitability despite challenging market conditions. 

Although gross margin contracted by 140 basis points to 41.2%, this decline was primarily offset by disciplined cost management, including a 130 basis points reduction in operating expenses as a percentage of sales, which helped GAP maintain an operating income of USD 292 million and an operating margin of 7.8%.

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