Gap Inc. announced it will split off the more successful Old Navy as a new publicly traded entity which will be financially independent of the other brands in the stable not doing as well: Gap, Athleta, Banana Republic, Intermix and Hill City.

The new company comprised of rolled-up brands has annual sales of about $9 billion, compared to $8 billion for Old Navy by itself. Gap Inc. said this will enable each company to maximize focus and flexibility, align investments and incentives to meet business needs and optimize cost structure.

“Following the comprehensive review by our board of directors, it’s clear that Old Navy’s business model and customers have increasingly diverged from…