SAN FRANCISCO—The Gap has announced that it will be closing approximately 175 stores across North America as it tries to restore the brand back to its position as one of the leading retailers in the world. The announcement follows five consecutive quarters of decreased sales.
Gap Inc. Chief Executive Officer Art Peck said in a press release that after, “following a thorough evaluation of its business and operations, Gap plans to right-size its specialty store fleet and streamline its headquarter workforce, primarily in North America, as part of the comprehensive effort to deliver more consistent and compelling product collections and engage customers across all channels.”
The plan is to close about 140 locations throughout this fiscal year, in addition to cutting 250 corporate jobs to increase productivity and focus on their more successful locations. Art Peck stated that, “these decisions are very difficult, knowing they will affect a number of our valued employees, but we are confident they are necessary to help create a winning future for our employees, our customers and our shareholders.”
The iconic retailer plans to rehabilitate its product and hopes that reducing the headquarters work force will help expedite and make its next moves more decisive.
The store closures will bring in an annual loss of $300 million with related costs between $140 million and $160 million. This reduction in stores will not put a stop to the growth of the company as stores continue to open throughout North America to a total of 800 stores at the conclusion of this process, a difference of 163 locations from May 2015.
The San Francisco based company has also announced that they will be closing a number of stores in Europe in the future, but has not specified how many.