TLDR
- Gap will roll out expanded beauty and cosmetics products at Old Navy stores starting fall 2025, including items under $25 from brands like E.l.f. Beauty
- The company plans to expand accessory offerings across all Gap brands as part of CEO Richard Dickson’s turnaround strategy
- Gap stock jumped 5.1% to $23.74 on Thursday following the announcement, with trading temporarily halted
- Beauty expansion will launch in roughly 150 stores this fall, with some locations getting dedicated beauty shops and staff
- Analysts view the move as strategic given Gap’s $15 billion revenue scale, though financial benefits may take several months to appear
Gap is making its next big bet on beauty products and accessories as the clothing retailer looks to boost growth under CEO Richard Dickson’s turnaround plan.
The company announced Thursday it will start offering expanded cosmetics and beauty products at Old Navy stores this fall. The rollout includes items sold under the Old Navy brand like hair mist and body lotion, plus products from E.l.f. Beauty, Mario Badescu, and Korean beauty brands.
Old Navy stores this fall will begin rolling out a wider assortment of beauty products, and Gap stores will add fragrances next year https://t.co/dDgJCOfUKd
— WSJ Business News (@WSJbusiness) September 4, 2025
Most products will cost under $25, targeting budget-conscious shoppers. Gap already sells some cosmetics at Old Navy checkout lanes, but this represents a much bigger push into the beauty space.
The expansion will hit roughly 150 stores initially. Some locations will get dedicated beauty sections with their own staff members to help customers.
Strategic Growth Play
Dickson described accessories and cosmetics as “sleeper categories” during his presentation at the Goldman Sachs Global Retailing conference Thursday. Both areas currently make up a small slice of Gap’s total sales but offer high margins.
“We believe those are two very big opportunities to go after, attracting new generations, as well as high-margin businesses that will complement our apparel business,” Dickson said.
The company isn’t starting from scratch. Banana Republic already carries handbags, belts, and jewelry. Old Navy just launched a new handbag line this week with all items priced under $50.
Gap stock climbed 5.1% to $23.74 on the news. Trading was briefly halted earlier in the day pending the announcement.

Analyst Support
Jefferies analyst Corey Tarlowe sees the expansion as more than just opportunistic. He called it a strategic extension of Gap’s transformation strategy.
“With strong consumer validation, financial flexibility ($2.4B cash), and proven execution, we think these categories could become meaningful growth engines in time,” Tarlowe wrote.
Given Gap’s $15 billion revenue base, even modest sales gains from beauty and accessories could generate substantial incremental revenue and profit. However, Tarlowe warned that adoption will take time, meaning financial benefits likely won’t show up for several months.
The beauty industry is projected to exceed $100 billion by 2025, making it an attractive target for retailers looking to diversify revenue streams.
Gap has posted six straight quarters of positive same-store sales growth as Dickson’s two-year turnaround gains traction. The company beat second-quarter earnings estimates thanks to better products, improved customer experience, and viral marketing campaigns.
Its recent “Better in Denim” campaign featuring girl group KATSEYE generated 8 billion impressions worldwide. The success mirrors American Eagle Outfitters’ viral partnerships with Sydney Sweeney and Travis Kelce, which helped drive that company’s stock up 30% Thursday.
“We’ve been working really hard to fix the fundamentals and reach this stage where we feel confident and excited about this next phase,” Dickson said Thursday.
Gap’s expansion into beauty and accessories launches this fall at 150 Old Navy locations, with some stores featuring dedicated beauty shops and specialized staff.
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