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So the saying goes, "When one door closes, another door opens."
Gap is hoping that's the case as it looks to build the Athleta brand, with a little help from its growing Athleta Girl line. And this goal is a key piece of the growth strategy that investors cheered Wednesday, pushing the stock to close nearly 8 percent higher.
Lululemon earlier this year announced it would be pulling the plug on its standalone Ivivva stores and is expected to close all of those doors by the end of the third quarter. Ivivva, launched in 2009, is Lululemon's line designed exclusively for younger girls.
Lululemon's closest competitor in the market for children's athleisure could be considered Gap's Athleta Girl.
With Lululemon scaling back and offering Ivivva primarily online, it may come as a surprise that Gap is not only doubling down on Athleta — calling the brand one of its two "growth brands," with Old Navy — but is expanding its line for girls. Beginning this fall, all Athleta stores will feature Athleta Girl, which was previously only on display in select locations.
"We're responding to customer demand for our Athleta Girl business ... and will now have an expression of the girl collection in every store this fall, just as our competition is closing all of their girl stores," Gap CEO Arthur Peck said on a recent call with analysts and investors.
Athleta is a "great brand" with "terrific runway," Peck added.
On Wednesday, Gap announced that it expects net sales at Athleta to exceed $1 billion during the next few years. To build on this, Gap is planning to open more Athleta stores over the next three years.
After launching in 2016, Gap's athleisure brand for young girls has grown little by little, supported by pop-up events and activities for parents.
"[Athleta Girl] stands a chance and will be aided by the fact that Lululemon has pulled back from its Ivivva girls concept," GlobalData Retail Managing Director Neil Saunders told CNBC in an interview. "Having an offer integrated into the main Athleta store is more viable than operating stand-alone stores."
That being said, there appears to be less consumer interest in athleisure among young girls than among adults, Saunders added. "There is also more price sensitivity."
Lululemon and Athleta are both known for their steeper prices, especially when compared with a player such as Target, which has its own cost-conscious, athletic line for kids, or even Gap's own Old Navy stores, which also sell athletic wear.
Through Athleta Girl, most tights and pants sell in the $49 to $59 range. Jackets could go for as much as $98 apiece, and t-shirts are closer to $30.
"I think it's worth investing in quality brands," Betina Baumgarten, the mother of an 8-year-old daughter and the founder of a personal styling business, told CNBC in an interview. "This is not something that falls apart. To me, that's worth it."
Baumgarten and her daughter are frequent Athleta shoppers, most recently attending a fashion show together that was hosted by Athleta Girl. "It's a joyful experience to be able to go shopping with my daughter," she said. "It spoils the mom, and it makes the daughter feel great."
"One thing our customer loves is the multi-generational shopping experience in our stores," Katy Miller, head of Athleta Girl, told CNBC in an interview. "Mothers and daughters love being able to shop together."
Now with parents stocking up on fall wardrobes, Athleta Girl has put a heavy focus on hosting "back-to-school bashes" for girls and their moms. Other Athleta Girl events include Zumba and smoothie socials, dance parties, summer camps and yoga lessons.
"It starts with bringing to life Athleta's mission to unite women and girls to reach their limitless potential," Miller said about the brand's value proposition and how it differentiates itself from the competition.
When it comes to designing clothes for Athleta Girl, the company starts with "performance attributes" in mind. But younger girls are also looking for comfort and versatility — something they can wear to school and then to sports practice, Miller explained.
"We start with women's product because they have incredible product that the girls love too, and then we look at color and print and other details that we can add for her so that she knows it's designed with her in mind and is specially for her," Miller said about Athleta Girl.
For example, girls pants include adjustable drawstrings, decked out with slogans like "Dream Crazy Big" on them.
"We like to imagine her starting her day feeling like she can conquer the world," Miller added.
As it expands, Athleta Girl will continue this strategy of offering community events in stores, while learning more about its younger, female customers, and ultimately reaching more girls.
Baumgarten, who has shopped the Athleta brand for more than three years for herself, said there isn't any other store where she can find the quintessential "wardrobe for the modern woman." Now, the Athleta Girl rollout in all of Athleta's stores is "brilliant," she added.
"I am thrilled that ... new individuals to the brand can experience the uniqueness of this."
On a recent earnings conference call, Gap CEO Peck spoke to the strength of the overall Athleta brand, where it is evident the retailer is focusing a greater share of its investments.
"We are very confident about the future runway in front of this business," Peck said. Double-digit growth for Athleta this year thus far follows double-digit growth in 2016.
Still, the global Gap business and the Banana Republic brand remain Gap's weaker links, with Old Navy posting promising growth recently, and Athleta starting to gain momentum.
"I think [Athleta Girl] is a good development and will help strengthen Athleta still further," GlobalData Retail's Saunders said. "However, it doesn't lessen the need to fix [Gap's] core business, which remains broken and under par in many areas."