Old Navy Elevates Its Activewear Strategy With Dedicated Brand Identity and Immersive Shop-In-Shops

Old Navy, the value-focused apparel banner owned by Gap Inc., is doubling down on one of its most reliable retail categories by carving out a distinct brand identity for its activewear line. This strategic shift involves the launch of dedicated digital portals, a dedicated social media presence, and immersive shop-in-shops in more than 40 brick-and-mortar retail locations across the United States.

The move comes at a crucial time for the broader apparel market, where traditional sportswear brands and athleisure labels have experienced turbulent financial quarters. By giving its activewear assortment a standalone identity under the banner of Old Navy Sport, Gap Inc. aims to capture market share from fitness-minded consumers who are increasingly prioritizing health and wellness, yet remaining cautious about their discretionary spending amid lingering economic pressures.

Strategic Impetus and Retail Performance

The decision to elevate Old Navy Sport was publicly detailed by Gap Inc. CEO Richard Dickson during his presentation at the Goldman Sachs Global Consumer and Retail Conference. Dickson pointed out that while certain seasonal categories—such as casual summer dresses—underperformed earlier in the year, the activewear segment remained a pillar of strength for the value retailer.

Alongside denim, children’s apparel, and baby clothing, activewear has consistently driven traffic and conversion rates for Old Navy. Dickson emphasized that these four core pillars will receive heightened marketing investments moving forward, serving as the foundational categories to drive financial performance during the back half of the fiscal year.

For years, Old Navy has quietly maintained its position as one of the top five sellers of activewear in the United States, largely propelled by its accessible price points. However, the lack of a distinct brand moniker historically meant the assortment functioned merely as a department within the broader store ecosystem. By branding the line as Old Navy Sport, the company is attempting to create a clearer psychological association for the consumer, mirroring successful private-label and proprietary strategies seen elsewhere in the retail landscape, such as Dick’s Sporting Goods’ Calia brand or various athletic lines housed within Target.

The Omnichannel Rollout and Immersive Experience

The introduction of Old Navy Sport is not confined to physical retail shelves; rather, it is a comprehensive omnichannel rollout. The brand has integrated the new identity across OldNavy.com, its proprietary mobile shopping application, and nationwide store fleets. Furthermore, the company has launched a dedicated social media presence via the handle @OldNavySport to engage fitness enthusiasts directly through digital content, influencer partnerships, and community-building campaigns.

Physically, the strategy centers on more than 40 specially curated retail locations that will feature immersive Old Navy Sport shop-in-shops. These dedicated environments are designed to break up the traditional department store layout, offering consumers a specialized boutique experience within the larger footprint of an Old Navy store. By merchandising the products together in high-energy, fitness-themed displays, the retailer hopes to elevate the perceived value of the garments and encourage higher units-per-transaction.

Broader Industry Dynamics and Changing Consumer Habits

The timing of Old Navy’s activewear elevation intersects with a fascinating period for the global fitness and wellness markets. While some industry analysts have questioned whether the broader athleisure boom is finally tapering off, market experts argue that consumer demand for active apparel has not actually shrunk. Instead, the competitive landscape has intensified, and consumer habits have evolved.

According to research published by The Consumer Collective, consumer focus on health and wellness has surged. Roughly 70% of consumers reported that health is a higher priority for them today than it was a year ago. Jessica Ramírez, co-founder and managing director of The Consumer Collective, attributes this shift partly to lifestyle changes, including the rising popularity of GLP-1 weight-loss medications, which have inspired more individuals to adopt active lifestyles.

Data shows that participation rates in various physical activities—ranging from running clubs and cycling to racquet sports like pickleball and tennis—have grown substantially. Consequently, the consumer base for activewear is larger and more engaged than ever before.

The Struggles of Competitors: A Self-Inflicted Downturn?

The robust health of the activewear consumer stands in stark contrast to the financial struggles recently faced by several prominent athletic and athleisure brands. Companies such as Athleta (another subsidiary of Gap Inc.) and industry bellwether Lululemon have both navigated challenging periods marked by sluggish sales growth, inventory missteps, and shifting consumer preferences.

Industry observers note that these struggles should not be interpreted as a sign of waning consumer interest in active lifestyles. Rather, the difficulties experienced by premium players are largely self-inflicted, stemming from execution missteps, mismanaged assortments, and a failure to adapt quickly enough to intensifying competition from both mass-market retailers and direct-to-consumer upstarts.

In response to these challenges, both Athleta and Lululemon have turned to veteran leadership from Nike to orchestrate turnarounds. Athleta appointed Maggie Gauger as its brand CEO, while Lululemon tapped Heidi O’Neill to bolster its defenses. These leadership appointments underscore how critical strategic execution and product relevance have become in a market flooded with alternatives.

Value Proposition in an Inflationary Environment

While premium brands have stumbled due to steep price points and occasional fashion misalignments, value-oriented retailers like Old Navy are uniquely positioned to capture the budget-conscious consumer. In an economic climate where shoppers are increasingly discerning about how they allocate their disposable income, Old Navy’s combination of trend-forward designs, functional performance fabrics, and low price points offers a compelling value proposition.

Ramírez noted that when consumers can find high-quality, durable activewear at a fraction of the cost of specialty athletic brands, the incentive to trade down becomes powerful. By giving Old Navy Sport a formal identity, the retailer is signaling to shoppers that they do not need to compromise on brand experience or aesthetic appeal simply because they are shopping at a value-focused store.

Future Outlook for Gap Inc.

For Gap Inc., the success of Old Navy Sport is tied closely to the broader corporate turnaround strategy spearheaded by executive leadership. Since taking the helm, CEO Richard Dickson has focused on revitalizing the company’s distinct brands by leaning into their heritage strengths, improving product quality, and streamlining marketing efforts.

The creation of Old Navy Sport acts as a test case for how Gap Inc. can extract incremental growth from its existing asset base without incurring the massive capital expenditures associated with launching entirely new retail concepts from scratch. By leveraging existing supply chain efficiencies, store real estate, and digital infrastructure, Old Navy can scale the new brand identity rapidly across its vast footprint.

As the retail industry moves deeper into the back half of the fiscal year—a critical period encompassing the back-to-school shopping season and the upcoming winter holidays—the performance of Old Navy Sport will serve as a key indicator of consumer health and retail execution. If the shop-in-shops and digital campaigns resonate as strongly with shoppers as executive leadership anticipates, Old Navy Sport could well become the blueprint for how value retailers capture market share in an increasingly competitive athleisure landscape.