Exploring New Revenue Streams Through “Sleeper Categories”
Gap Inc. is making a bold expansion into the beauty and accessories market, identifying these areas as “sleeper categories” with untapped potential and strong customer appeal. Starting this fall, Old Navy will roll out beauty and personal care products in 150 stores nationwide, marking the company's most aggressive move yet into the $100 billion U.S. beauty industry.
The initiative spans across its portfolio, with Gap, Banana Republic and Athleta each set to introduce distinct brand expressions in beauty and accessories. While the beauty market offers rapid growth and high margins, industry analysts caution that authenticity and execution will be key, especially in a space where many apparel retailers have previously struggled to gain traction.
Accessories, however, may offer a more natural path to success. Gap Inc. is leaning into designer-inspired handbags and other style-forward items, which are aligned with customer expectations and present a lucrative, high-margin opportunity.
With this move, Gap seems to be aiming to diversify revenue while deepening its lifestyle brand appeal.
