Old Navy will introduce plus-size fall fashions for women in new, dedicated in-store boutiques at 55 locations, as well as on the Internet, Old Navy President Jenny J. Ming said.
updated 5/21/2004 12:41:57 PM ET 2004-05-21T16:41:57

Under pressure from investors to find new ways to grow its business, Gap Inc. says its lower-priced Old Navy chain will launch a plus-sized women's clothing line in July.

The new plus-size line is among the first of a series of initiatives by Gap to grow its sales in the wake of a successful corporate turnaround that has been "all about getting business back on stable ground," President and Chief Executive Paul Pressler told analysts in a Thursday conference call.

Although the San Francisco-based apparel giant still has some room to improve, the company has largely succeeded in luring back customers that had shunned Gap's flopped fashions of several years ago. Gap on Thursday reported a 54 percent surge in fiscal first-quarter earnings, citing higher sales and tight inventory management.

Now, Gap is mulling a slew of ideas to keep the stock rallying. Pressler said the company already is mining its existing chains for new product categories, including underwear and swimsuits at Gap, jewelry at Old Navy, and footwear and accessories at Banana Republic. Looking ahead, it's possible that some store sizes will grow to accommodate new product lines, Pressler said.

In addition, he said that in late 2005 and 2006 the company plans to expand its domestic business with a wider array of fits and sizes across its brands. Gap aims to take better account of regional demographics when it comes to fits and sizes, executives added. Gap also aims to step up its growth overseas, and new retail brands could be in the offing, Pressler said.

Old Navy will introduce plus-size fall fashions for women in new, dedicated in-store boutiques at 55 locations, as well as on the Internet, Old Navy President Jenny J. Ming said. While Old Navy historically has offered some women's clothes in larger sizes, the new line will include more fashion-oriented clothing that is targeted toward a younger customer.

"She is looking for more fashion options and the ability to shop at the same places as her friends and family," Ming said of the plus-size client the chain is targeting.

Gap isn't providing any numbers for the growth it expects the new initiatives to spur. But investors hungry for announcements of additional initiatives will see "more to come over the coming months," Pressler said.

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