Gap Inc. will close 175 specialty stores in North America and eliminate 250 corporate jobs as it seeks to rebuild its Gap brand’s product operating model and hasten decision making.
Gap Inc., which owns the Gap, Old Navy and Banana Republic brands, will close 140 stores by the company’s fiscal year end, Jan. 31, 2016. The changes will not impact Gap Outlet and Gap Factory Stores. The brand will close a “limited number” of European stores during this period, according to a company statement.
“Returning Gap brand to growth has been the top priority since my appointment four months ago,” said Art Peck, CEO of Gap Inc. “Jeff Kirwan and his team bring a sense of urgency to this work. Customers are rapidly changing how they shop today, and these moves will help get Gap back to where we know it deserves to be in the eyes of consumers.”
Advertisement
Gap will continue to operate approximately 500 Gap stores, as well as 300 outlet stores.
“We’re focused on offering consistent, on-brand product collections and enhancing the customer experience across all of our channels, including a smaller, more vibrant fleet of stores,” said Kirwan, Global President for Gap, Inc.
The company estimates annualized savings from these actions to be approximately $25 million, beginning in 2016. The store closures will cost Gap $300 million in 2015 sales losses, according to a company statement. Additionally, the company expects to incur one-time costs primarily associated with these actions to be in the range of approximately $140 million to $160 million.
