The Gap is breaking up.

The clothing retailer announced plans Thursday to spin off its money-making brand Old Navy into a separate publicly traded company.

The remaining brands that were under the Gap Inc.

Umbrella including its namesake stores, Banana Republic and Athleta will be separated into another company by next year.

SOUNDBITE (ENGLISH) CONWAY G.

GITTENS, REUTERS BUSINESS CORRESPONDENT SAYING: I'm Conway Gittens in New York.

The announcement sent shares of Gap Inc.

Soaring.

Investors are glad the company is shifting attention to the Gap stores, which have struggled for years as stores like Zara and H&M have become preferred destinations for shoppers looking for good quality and cheaper prices.

As part of the reorganization Gap is going to close half of its specialty stores over the next two years.

Gap has tried to spruce up its image by modernizing stores and even opening up this mega-store in New York City's Times Square.

But efforts have failed to catch on.

In the crucial holiday-shopping quarter, companywide sales dropped one percent, which was far worse than Wall Street expected.

And the company expects the first half of this year to be even more challenging.