The news: Old Navy is turning its activewear assortment into a sub-brand, Old Navy Sport, in a bid to gain authority in the highly competitive category.

The sub-brand is meant to give Old Navy’s athletic assortment a “distinct identity that combines style, performance, and value in a single destination,” per a company press release.

The details: The launch aims to build on Old Navy’s status as the fifth-largest seller of activewear in the US, according to Circana data cited by the brand. The refreshed assortment features seasonal styles, updated colors, and an expanded range of silhouettes designed to transition between the gym and everyday life—a combination of style and value that could enable the brand to stay relevant in a saturated market.

Old Navy Sport will be featured across all the brand’s stores and digital channels, while 42 locations will have immersive shop-in-shops to showcase the new offering. The brand is also reportedly considering standalone locations for its athleisure business, per Women’s Wear Daily, although it will likely wait to see how the initial launch performs before investing in real estate.

Implications for retail: While it’s understandable for Old Navy to want to double down on a category that is performing well, the launch puts the brand in direct competition with sister label Athleta, which is struggling to emerge from a prolonged slump. Jessica Shynn, head of Old Navy Sport, brushed off concerns about cannibalization by emphasizing differences in positioning, customer base, style, and price point. But Athleta’s mid-market positioning means it is precisely the type of brand most likely to be affected by Old Navy Sport, especially if the latter can deliver on its promise of offering stylish, high-performance products at affordable prices.

More broadly, the launch could win Old Navy more spending from shoppers who are still interested in the athleisure category but unwilling or unable to pay for premium labels like lululemon and Vuori. It could also improve the brand’s positioning among the growing ranks of health- and wellness-focused consumers, who are more likely to buy athletic apparel than the general population.

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