All Gap company stores in U.K., Ireland to close

Dive Brief:

Making headway in the ongoing operational revamp at its namesake brand, Gap Inc. on Wednesday announced it will wind down all company-owned Gap and Gap Outlet stores in the U.K. and Ireland. The brand has had a presence in the U.K. since 1987 and in Ireland since 2006.
The stores will shut down "in a phased manner" from the end of August through September, according to a company press release. Gap will continue to run its e-commerce business in both countries.
Gap also said that it's negotiating with French apparel retailer Hermione People and Brands to take over its stores in France. In March, Italian fast-fashion retailer OVS announced it will sell Gap clothing online and in some stores.

Dive Insight:

Gap Inc. is working to leverage its long-standing if faltering namesake while also taking steps to right-size its operations. Scaling back abroad is "low-hanging-fruit," MKM Partners Managing Director Roxanne Meyer said when executives in October said they were looking to shutter or franchise their operations in Europe.

The review undertaken in the last several months revealed that different geographies would benefit from different solutions, the company said in its release. For the U.K. and Ireland, that means abandoning stores.

"In the United Kingdom and Europe, we are going to maintain our Gap online business," the company said. "The e-commerce business continues to grow and we want to meet our customers where they are shopping. We're becoming a digital first business and we're looking for a partner to help drive our online business. However, due to market dynamics," all company stores will close.

That doesn't mean the brand itself won't be found outside the U.S. Gap is not only finding partners to take on the brand's international retail operations but has also entered a licensing agreement to release Gap-branded eyewear in several countries. And the brand's tie-up with Kanye West's Yeezy has already garnered worldwide attention.

Gap Inc. has long employed a franchise model for its operations overseas. On Wednesday, the company called franchises "a strong and cost-effective way to amplify the brand in international markets." Gap uses such partnerships in 35 countries, with "more than 460 stores, 14 standalone e-commerce sites and more than 160 multi-channel or pureplay e-commerce sites," per its release.