Gap to close 175 of its name­sake stores

Los Angeles Times - - BUSINESS BEAT -

Gap Inc. plans to close 175 of its name­sake stores and cut 250 jobs at its head­quar­ters as the San Fran­cisco com­pany tries to strengthen the strug­gling brand.

Gap, which owns the Gap, Old Navy and Banana Re­pub­lic chains, said Mon­day that it would close about 140 Gap stores in North Amer­ica in the fis­cal year that ends Jan. 31 — and the re­main­der af­ter­ward — based on fac­tors that in­clude lo­ca­tion and per­for­mance. The com­pany also is clos­ing an undis­closed num­ber of stores in Europe. And it’s cut­ting jobs at its head­quar­ters in an at­tempt to make it faster and more decisive.

The moves are the latest at­tempt by the once high­fly­ing com­pany to im­prove the shaky per­for­mance at its name­sake brand. The brand that used to be a go-to for gen­er­a­tions of khaki pants wear­ers has suf­fered in more re­cent years as it has failed to keep up with the right de­sign trends.

To help right the ship, Gap has shaken up its man­age­ment ranks: Art Peck be­came chief ex­ec­u­tive in Fe­bru­ary and lead­er­ship of the Gap and Banana Re­pub­lic brands was changed. The com­pany also has been work­ing to over­haul its fash­ions to im­prove their ap­peal. And it got rid of its Piper­lime line.

The latest moves are aimed at mak­ing the com­pany more nim­ble. Gap said store clos­ings and job cuts will save it around $25 mil­lion a year. Gap said it would take about $140 mil­lion to $160 mil­lion in charges re­lated to the moves.

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