Apparel retailer Gap intends to close a quarter of Gap specialty stores in North America over the next few years, including 140 this year, potentially affecting thousands of jobs as the company struggles with a slump in sales.
The San Francisco-based Gap would also cut 250 jobs at its headquarters. As of January 31, Gap had about 1,41,000 full- and part-time employees in about 3,700 company-owned and franchise stores worldwide.
A series of fashion misses has resulted in shoppers turning away from Gap to fast fashion rivals.Gap is trying to bring in some compelling product to rejuvenate the top line and profitability. The label's women’s clothing business had been a challenge for several seasons due to quality and fit issues and because it was not trendy enough.
The announcement of store closures follows a management shakeup at the retailer. Gap expects to close 175 of the 675 specialty stores under the Gap label over the next few years, resulting in annual sales losses of about 300 million dollars. The company also expects to incur one-time costs of 140 million dollars to 160 million dollars, primarily in the current quarter.
Gap reported sales of 16.44 billion dollars for the year ended January 31.
After the closures, Gap will have 500 specialty stores in North America as well as 300 outlet stores. The company also plans to close some stores in Europe.
www.gap.com/
