Gap buys Athleta for $150 million in cash

By ANNE D'INNOCENZIO – 5 hours ago

NEW YORK (AP) — Clothing retailer Gap Inc. announced late Monday that it is buying Athleta Inc., a women's sports and active apparel company, for about $150 million in cash, as part of its strategy to diversity its brand offerings.

The company says its acquisition of Athleta, which sells its merchandise primarily online and through its catalog, will enhance its presence in the growing $31 billion women's active apparel sector in the U.S.

Following the purchase, Athleta is expected to eventually become the fifth brand in Gap's online portfolio, which includes its namesake brand, Old Navy, Banana Republic and online shoe retailer Piperlime.

The deal is expected to close within the next few weeks, Gap officials said.

"Athleta is a great success story with loyal customers that will now become part of the Gap Inc. family of brands," said Glenn Murphy, Gap Inc.'s chairman and CEO, in a statement. "This strategic acquisition complements our brands perfectly and allows us to leverage our new online platform to expand into this significant retail sector."

In June, Gap launched an online platform where consumers can buy items from all of its brands in one shopping cart with a single shipping fee.

Founded 10 years ago, Petaluma, Calif.-based Athleta caters to the 25-to-55 age group and offers clothes for yoga, running, skiing, snowboarding and surfing.

Joe Teno, the current CEO of Athleta, will not change his role when the acquisition is completed, but his title will change to president. Teno will report to Toby Lenk, the president of Gap Inc.'s direct division.

Source: Associated Press

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