Old Navy saves Gap’s khaki butt

America's tip retailers in trouble

Fans of cardigans, turtlenecks and khakis rejoice! The Gap appears to be creation a comeback.

Shares of The Gap, that also owns Banana Republic and Old Navy, soared scarcely 15% Friday after a association reported sales for Sep that weren’t as bad as feared. The batch is now adult for a year as a outcome of Friday’s pop.

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The Gap (GPS) still has a prolonged approach to go before a association can be deliberate healthy. Same-store sales during The Gap and Banana Republic both plunged about 10%.

So because are investors so excited? It looks like a Old Navy stores are behind on lane after some unsatisfactory results. Old Navy reported that a same-store sales rose 4% in September.

The reconstruction of Old Navy is vicious to The Gap’s success. Gap CFO Sabrina Simmons pronounced in a matter Thursday that “the clever patron response to Old Navy’s product assortment” has helped a altogether company.

Many investors were disturbed a code was in critical difficulty after Stefan Larsson, a executive in assign of using Old Navy, left a association scarcely a year ago to turn a CEO of Ralph Lauren (RL).

And Old Navy’s sales in Sep would have been even improved if not for an Aug glow during a Gap placement trickery in New York. In fact, The Gap pronounced same-store sales for a whole company, that fell 3% in September, would have been flat.

The association even remarkable that distinction domain increases opposite all a stores will be adequate to equivalent any gain strike from reduce sales and aloft costs due to a fire.

Related: More difficulty during a mall

That’s good news for a Gap, that has struggled to adjust to a quick conform trend that’s swept over a republic during a past few years. Companies like HM, Zara and Forever 21 have been eating a lunch lately.

Consumers, quite younger ones, have also not been as meddlesome in shopping (and wearing) trademark attire either.

That’s been a problem for The Gap too, though even some-more so for companies like Abercrombie Fitch (ANF) and broke mall-based retailers Aeropostale, Pacific Sunwear, Wet Seal and Quiksilver.

But for now, it looks like The Gap — or during slightest a Old Navy code — has movement again.

The doubt will be either or not a core Gap code (not to be confused with The Gap Band that’s famous for a ’80s despondency classical “You Dropped On a Me”) and Banana Republic can miscarry as well.

Analysts are still skeptical. While several did ascent their ratings and increased their cost targets for The Gap on Friday, many still consider a batch is a reason and not a buy.

Mizuho researcher Betty Chen wrote in a news that a improvements during Old Navy are encouraging, though she thinks that The Gap and Banana Republic still face a “long highway to recovery.”

FBR Co.’s Susan Anderson combined that sales for a whole association sojourn “inconsistent.”

The misfortune might be over for Old Navy. But it’s too shortly to start pitch dancing in your khakis like that famous Gap blurb from a late 1990s.

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