Gap is making headlines with a strategic expansion set to redefine its position in the retail landscape. Gap Inc. is making a bold move into the rapidly expanding beauty market, announcing the launch of comprehensive beauty and personal care lines under its flagship Gap and Old Navy brands. In a strategic decision that signals serious intent, the retail giant has partnered with John Demsey, the former Estée Lauder Companies executive, who will serve in a strategic consulting role to guide the company’s beauty expansion.
Beauty Industry Heavyweight Joins the Team
According to sources reported by The Business of Fashion, John Demsey, previously of the Estée Lauder Companies, has been working with the company in a strategic consulting role. This collaboration brings significant industry expertise to Gap’s beauty venture, as Demsey spent 30 years at Estée Lauder, where he was instrumental in transforming brands like MAC Cosmetics into global powerhouses and oversaw Tom Ford’s expansion into fragrance and cosmetics.
Demsey’s involvement represents a major coup for Gap, particularly given his track record of building and scaling beauty brands. Since leaving Estée Lauder in 2022, he has been involved in various beauty ventures, most recently being tapped to relaunch luxury skincare brand Poiret and serving as an advisor for private equity firm L Catterton.
Phased Rollout Strategy Begins This Fall
The beauty expansion will follow a carefully planned phased approach. The Old Navy offering will include skin, hair, nail, and cosmetics products predominantly priced under $25, and Gap will add beauty products beginning with fragrances next year. The initiative starts with a test-and-learn phase at 150 Old Navy stores this fall, featuring dedicated shop-in-shops and specialized Beauty Associates.
Gap Inc. leadership explained the strategic rationale behind the move in public interviews and official announcements, noting that expanding into beauty aligns with the company’s strengths and creates new opportunities to reach a broader customer base.
Manufacturing Partnerships and Brand Portfolio
Gap has strategically aligned with established beauty manufacturers to ensure product quality and market readiness. According to sources, Maesa has been tapped to produce the Old Navy assortment, leveraging the incubator’s expertise in celebrity beauty brand development. However, the company will not be involved with Gap’s upcoming line; Give Back Beauty previously held that licence as recently as September 2024.
Beyond own-brand products, Old Navy stores will stock a curated selection of trending brands. In addition to Old Navy’s body and hair mists, stores will also feature popular K-Beauty brands like TonyMoly and Mixik, expanding the current offering from E.l.f. Beauty and Burt’s Bees.
Market Opportunity and Financial Impact
The beauty expansion arrives at a pivotal time, as the sector represents one of the fastest-growing retail categories. Gap cited Euromonitor data indicating that the beauty and personal care market is expected to surpass $100 billion this year. The company sees significant potential in beauty products as natural impulse buys that increase basket size while maintaining healthy margins.
The market responded positively to the announcement, with Gap’s stock rising up to 6 percent on Thursday, while competitors like Ulta Beauty, known for its high-low mix, saw declines. This market response reflects investor confidence in Gap’s beauty strategy and the experience that Demsey brings.
Strategic Timing and Future Outlook
The beauty expansion fits into Gap’s broader transformation under Dickson’s leadership. Over the past two years, the company has emphasized advancing its strategic priorities, strengthening its financial footing, and creating more unified and relevant brands. This focus is enabling Gap Inc. to explore new avenues for growth and innovation, ensuring ongoing competitiveness in the retail sector.
Gap also has plans to expand its beauty business further in 2026, aiming to introduce new products across its portfolio and grow its accessories offerings at the same time. The partnership with John Demsey marks a thoughtful approach to diversification, positioning Gap and Old Navy to participate meaningfully in the evolving beauty market.
