The turnaround in the company's business plans stems from the loss of competition in online commerce before Zara and H & M. One of the company's goals will be finalizing the closure of 230 stores worldwide.
The reduction of facilities is equal to 6.3% of its total portfolio and will be planned to reduce expenses, the group said in a statement.
The company, present in about 40 countries, has not reported how many jobs will be affected, as well as the regions involved.
Gap's goal is to save $ 90 million, according to the signature.
The low-priced Old Navy brand, which generated $ 8 billion in revenue in 2018, will become an independent San Francisco-based company.
The other brands (Gap, Banana Republic, Athleta, Intermix and Hill City) will continue under a different company.
That entity, whose cumulative sales were 9 billion dollars in 2018, will be called "Newco" but Gap clarified that this name is temporary. If they decide to keep it, the Gap name will only be in stores that sell brand names.
The group plans to close the operation in 2020 after completing internal processes and procedures before state agencies.
The decision was welcomed on Wall Street. Gap shares rose 18% on electronic transactions after closing when the announcement was made.