Gap’s Gonna Have a Good Year: Analysts By Investing.com

By Christiana Sciaudone

Investing.com — Gap jumped more than 4% after analysts called it a post-pandemic winner amid the sale of a premium children’s fashion brand.

Wells Fargo (NYSE:WFC) and JPMorgan (NYSE:JPM) see the company ready for a comeback amid an attempt to turn around the business, Dow Jones reported. The company also unloaded Janie and Jack, which makes high-end clothing for kids, for an undisclosed amount to Go Global Retail, a fashion and retail investment platform.

Analysts expect demand for new clothes to jump with vaccinations increasing and a massive accumulation of consumer savings.  

“We could see returns to pre-pandemic activities that should catalyze stagnant apparel spending — such as a return to offices, taking long-delayed vacations or social gatherings. We believe as outside-the-home activities are more widely adopted, a flood of pent-up demand could drive a major rebound in apparel by 2H21,” Wells Fargo said, according to Dow Jones. 

Gap acquired Janie and Jack in 2019 amid the Gymboree bankruptcy. 

“As part of Gap Inc (NYSE:GPS).’s Power Plan 2023, and exemplified by this transaction, we are prioritizing strategic focus and resources behind the growth and potential of our billion-dollar brands in Old Navy, Gap, Banana Republic and Athleta,” said Sally Gilligan, head of strategy for Gap.     

Gap is up more than 300% over the past 12 months. Profit and sales have been steadily improving since the quarter ended in July, though analysts forecast a loss for the quarter that ends in April.