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We went to Old Navy and saw why the brand is Gap's secret weapon (GPS)

Old Navy is Gap's saving grace, and its CEO wants to see more of it.

  • The store has a cult following of price-conscious customers who choose it over Gap because of its lower prices.

On Monday, Gap CEO Art Peck told CNBC that the retailer will be opening 60 new Old Navy locations in 2018. It currently has over 1,000 locations.

struggled in recent years and announced 200 store closings at its namesake brand and sister store Banana Republic,

The growth at Old Navy is not specific to any one section of the store. "Old Navy had a super strong fourth quarter," Gap Inc CEO Art Peck said on the earnings call. "It was very diversified and was not relying on any one horse to pull the cart."

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We timed our visit to Old Navy with the start of Memorial Day weekend sales. The first thing that struck us was the amount of clothing and accessories that were on sale.

The store was awash with signs offering discounts ranging from 20% to 60% off.

There were also several clearance sections around the store.

Even before discounts, however, Old Navy was still much cheaper than Gap.

The price discrepancies were evident in both the women's and men's jeans sections.

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A pair of women's jeans at Old Navy cost between $29.94 and $44.94.

The cheapest pair of women's jeans at Gap was $69.95.

The focus on value at Old Navy is resonating well with price-savvy customers in the US.

There is a noticeable difference in the quality of similar items at Old Navy and Gap. These Gap espadrilles, for example, cost $49.95 and are made with real suede and 100% cotton.

At Old Navy, a similar pair cost $24.94 but were made with synthetic materials.

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Fast fashion has made disposable shopping a trend. "Once I've worn something for a season or two I am usually going to be sick of it and want to buy something else," McKay said. "I’d rather buy a $30 dress than an $80 dress knowing that I am only going to wear it for a season or two."

In the men's section, there was a lot of variety. The colors and patterns were bolder and brighter than the clothing at Gap, which might appeal to younger shoppers.

In Gap, you typically see plain colors and a lot of denim.

Old Navy also has their own cheaper versions of popular products. These Vans-style shoes cost $29.94 (at Vans, a similar pair costs $55).

But while turnover is important, Old Navy is also valued for its staple items. "Their 'Rockstar' jeans are very consistent. When they come out with new colors, I can buy them and I am going to be happy with them," McKay said.

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Though they change the colors and styles of their products frequently, the shape often remains the same.

Old Navy's women's pixie pants, which were launched in 2014, have become one of the brand's most popular products. Stefan Larsson, the former president of Old Navy, told The New York Times in 2015 that when the pants were first tested, they sold 2.4 million pairs in a year.

"It's one of the biggest revenue-generating styles that we have," he said.

The store has consistently low prices across all of its departments.

We noticed a big difference in prices in the baby clothing section. At Old Navy, it cost $24.95 for a pack of three "Babysuits."

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At Gap, it cost $29.95 for one. The items at both stores were 100% cotton, though at Gap, the cotton is organic.

Old Navy is also trying to improve the shopping experience. The amount of discounted labels can make it confusing to know how much you can expect to pay. But there are stations throughout the store where you can scan and check prices.

We tried the scanners out, and they worked well. This shirt, which scanned for $21.55, was originally marked at $26.94.

Old Navy also had a separate line for shoppers purchasing items with a credit or debit card, which sped up the process.

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