Gap to shut down 200 stores over next three years
American fashion retailer Gap is planning to close 200 underperforming Gap and Banana Republic speciality locations over the next three years in order to achieve balanced growth.
The move is aimed at shifting focus to high footfall areas and its e-commerce platform.
The company intends to reduce the size of lower productivity speciality locations, as well as open 270 new Old Navy and Athleta stores during the same period.
Gap president and CEO Art Peck said: “Over the past two years, we’ve made significant progress evolving how we operate, starting with getting great products into the hands of our customers, more consistently and faster than ever before.
“With much of this foundation in place, we’re now shifting our focus to growth. We will leverage our iconic brands and significant scale to deliver growth by shifting to where our customers are shopping.”
The retailer is expecting its growth brands Old Navy and Athleta to achieve more than $10bn and $1bn respectively in net sales over the next few years.
It attributes the projective growth trajectory to growth in online and mobile channels, as well as US store expansion.
Its e-commerce offerings comprise cross-brand shopping, omnichannel services and a proposed buy online, pick-up in-store service, as well as a new personalisation engine.
Gap noted that it will continue to invest in direct fulfilment capacity, loyalty, personalisation, omnichannel services, artificial intelligence and other data-powered customer experiences.
It is expected that the company will realise expenditure savings of $500m over the next three years by leveraging its cross-brand synergies, size and scale, as well as streamlining its operations.
The company noted that part of the savings will be directed towards its growth initiatives.