Investing in stores is paying off for Old Navy, Gap Inc. president and CEO Arthur Peck told analysts on the retailer’s third-quarter earnings call.

The Old Navy division posted a 4 percent increase in same-store sales for the quarter, in part due to a new, low-cost renovation the company has been rolling out to its oldest stores, he said.

“We have a lot of stores in the Old Navy fleet that are still the original fitment. We call them the old Old Navy's,” he said. “And they're typically very productive stores for us in locations that customers are still shopping in. They look their age, but they don't merit a full gut remodel. So we've done the relatively simple and the relatively low-cost things, typically starting with paint.”

Old Navy does small upgrades like painting the fixtures, redoing the lighting, or remodeling the cash-wrap, he said. “Sometimes we'll even shrink the store down because perhaps it's too large. And if so, we'll build a false wall at the back to tighten up the store and make it feel a little bit more intimate.”

Customer response to these stores is overwhelmingly positive, and sales and profitability are up at those stores, he said. “Oftentimes they will say ‘Is this all new product?’ because it's displayed in an environment that is fresher and more respectful. And we're seeing the top line lift and the bottom line lift.”

Gap Inc. has opened 20 new Old Navy stores in North America lately, giving it a total of 1,070.