US fashion retailer Gap is reportedly planning to shut hundreds of its own-branded stores globally in a move to reduce costs as the company has seen an offset in sales.
The retailer currently operates more than 3,000 stores globally, including 775 Gap-branded stores. The remaining stores are under Old Navy, Banana Republic and Athleta brands.
Gap president and CEO Art Peck was quoted by CNBC as saying: “There are hundreds of other stores that likely don’t fit our vision for the future of Gap brand specialty store, whether in terms of profitability, customer experience, traffic trends. The range from the very best to the very worst stores is extremely broad.”
“There likely will be a cash cost to exit many of these stores, which we will attempt to minimise.
“But I plan to exit those that do not fit the future vision quickly. I’m going to move thoughtfully but aggressively.”
The company reported a 7% decline in the comparable sales for the Gap brand globally during the third quarter ending 3 November 2018.
However, comparable sales of the Old Navy brand were up by 4% and the Banana Republic were up by 2% for the third quarter.
In addition, the retailer expects to open about 25 company-operated stores Athleta and Old Navy in the fiscal year 2018. It also plans to focus on the closure of its Banana Republic brand.
Peck said: “We are pleased to report continued solid performance from Old Navy, Banana Republic and Athleta leading into the important holiday season.
“We are clearly not satisfied with the performance of Gap brand. We know this iconic brand is important to customers, and we are committed to taking the bold and necessary steps to ensure that it delivers value to shareholders.”