Gap Eyes Beauty Boom, Old Navy To Launch Cosmetics And Accessories In Fall Rollout

Gap said on Thursday that it was expanding its product lineup to include beauty and adding more accessories at its Old Navy banner as part of an attempt to boost sales at its stores.

The company stated that it sees a clear and meaningful opportunity to expand into the beauty category, with plans for a phased launch. This will begin with an initial test-and-learn expression at Old Navy later this fall.

Gap, citing Euromonitor, noted that the beauty and personal care market is one of the fastest-growing and most resilient retail categories in the U.S., expected to surpass $100 billion in 2025. As part of its expansion, Gap will include 150 Old Navy stores featuring a curated assortment of beauty and personal care products, with select stores offering dedicated shop-in-shops and beauty associates.

The company said that in 2026, it plans to scale its Old Navy beauty business, as well as launch brand-right expressions across the portfolio.

Retail sentiment on Gap remained unchanged in the 'extremely bullish' territory, with message volumes at 'extremely high' levels, according to data from Stocktwits.

Shares of the company rose by more than 3% in early trading after the announcement of the expansion. The stock was halted on the New York Stock Exchange for over 40 minutes before resuming trade.

A user on Stocktwits questioned the stock halt for the announcement of the beauty expansion.  

Jefferies called the move "more than opportunistic" and "a strategic extension of its transformation playbook,” according to TheFly. The firm noted that these categories could become meaningful growth engines over time, but added that the impact would take some time to be reflected in the profit and loss statement. 

In late August, Gap reported mixed second-quarter results. CEO Richard Dickson noted that Gap expects to "mitigate the full impact of tariffs over time” and claimed that strong performance from Gap and its other brands would help offset the cost pressure.

Gap shares have declined 1.5% this year and have gained over 9% in the last 12 months.

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