Gap to Close 350 Stores as Retailer Shifts Focus to Ecommerce and Off-Mall Operations

Gap Inc. plans to shrink its store footprint by 350 locations as the retailer works to return to profitable growth in 2021, according to CNBC. Longer-term, the company plans to reconfigure its operations so that 80% of revenue comes from ecommerce and off-mall locations by January 2024.

Gap plans to complete 75% of its initial store closures by January 2022. Additionally, the retailer plans to close up to 30% of Gap and Banana Republic stores in North America by the end of January 2024, and is currently re-evaluating its European business with the potential for additional closures — including the possibility of abandoning European brick-and-mortar entirely.

“Reports that Gap may be closing all of its European stores come as no surprise given its undistinguishable product offering and failure to capitalize on growing demand for casualwear,” said Gemma Boothroyd, Apparel Analyst at GlobalData in commentary provided to Retail TouchPoints. “Despite comfortable clothing being in demand this year as European consumers have spent more time at home, it was too late for Gap to leverage its existing product lines, with its reputation already damaged by years of lackluster ranges.

“Although globally Gap managed to practically double its ecommerce business to account for nearly 50% of total sales amidst the COVID-19 pandemic, this success did not translate to Europe, where second quarter total sales ending August 2020 plummeted by 47%,” Boothroyd continued.


Ecommerce was a bright spot overall for Gap: sales were up 95% for Q2 2020, which ended Aug. 1, and the retailer gained 3.5 million new online customers during this period. Athleta reported a 6% overall sales increase, with ecommerce sales up 74%, while other brands saw sales declines despite strong ecommerce returns:

  • Old Navy: Overall sales down 5%, online sales up 136%;
  • Gap: Overall sales down 28%, online sales up 75%; and
  • Banana Republic: Overall sales down 52%, online sales up 26%.

Gap executives are planning tweaks to Banana Republic to help improve the brand’s fortunes. This includes temporarily shifting the product assortment from work wear such as dresses and suits to activewear, sleepwear and knits, with plans to return to its traditional portfolio as more people return to the office.

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