Dive Brief:
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Gap Inc. said Monday that it will close 175 underperforming North American Gap brand stores in an effort to contain costs and refocus; 140 will close this fiscal year.
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Gap Inc. itself will also shed 250 corporate jobs, mostly at its headquarters in San Francisco.
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Once the stores close, the brand will be left with 500 full-price stores and 300 Gap Factory Outlet stores in North America.
Dive Insight:
CEO Art Peck has shaken things up since arriving in January, with major changes, especially at the design level. While Gap’s Old Navy brand is doing well, Gap and Banana Republic are faltering quarter after quarter.
Closing stores is usually a prudent move that unloads underperforming stores so that a retailer can more nimbly refocus and/or pivot. This move, though, leaves the brand with a greater ratio of Gap Factory outlet stores that could dilute those efforts by diluting the brand. Although the outlet stores have been performing relatively well, they have specially made merchandise never found at Gap stores with quality below what’s found at those flagship stores, and that could hurt the brand’s strength.
