Gap to shift focus to Old Navy, Athleta

Retailer will close 200 stores

NEW YORK - Gap Inc. plans to shift its focus to its growing Old Navy and Athleta stores, and away from the Gap and Banana Republic brands.

The company said Wednesday it will close about 200 Gap and Banana Republic stores in the next three years and open about 270 Old Navy and Athleta locations during the same period.

Lower-priced Old Navy has been a bright spot for the clothing retailer, posting rising sales even as they fell at the Gap and Banana Republic.

The San Franciscobased company says Old Navy is on track to surpass $10 billion in sales in the next few years. And Athleta, which sells athletic clothing, is expected to exceed $1 billion in sales. The company expects to reap about $500 million in savings over the next three years by better taking advantage of its scale.

“We continue to move with the customer and meet them where they are,” Gap CEO Art Peck told analysts Wednesday.

Gap’s moves are the latest to reinvent the chain and are being spearheaded by Peck, who took the helm in 2015. The company faces the same problems as other fashion retailers, as shoppers buy less clothing in general and shop more at off-price chains or buy online when they do. But Gap Inc. has also long struggled with its own problems, mired in a sales slump as its clothes don’t stand out in an overcrowded landscape.

The company has been offering frequent discounts to get shoppers to buy, but recently it’s been trying to pull back on price cutting. It’s also been working hard to improve fit, and it’s been trying to rework its fashions. The company has been cutting its store numbers over the past decade or so. Since 2005, the chain has closed 650 stores and reduced its footprint by 5 million square feet, Peck said.