Gap to close 175 of its namesake stores
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.