SAN FRANCISCO—San Francisco-based clothing retailer Gap announced on October 21 that they will close 350 stores by early 2024. That number means that the company will lose one third of their store base.
The announcement was made during a Gap Inc. investor meeting earlier in the week, during which the company explained that the move comes as Gap is trying to reinvent and restructure their sales strategies during the pandemic. Since March, many retail stores across the country, including GAP, were forced to temporarily close due to shelter-in-place orders, which caused many shoppers to shift their shopping to online options. Many retailers believe this trend will be permanent, even after the pandemic ends.
“We’ve been overly reliant on low-productivity, high-rent stores. We’ve used the past six months to address the real estate issues and accelerate our shift to a true omni-model,” said Mark Breitbard, Gap CEO, in a statement.
However, the company did add in their announcement that they plan to add more Old Navy and Athleta stores, which are low-priced and “thriving”. Executives announced that Old Navy, Gap Inc’s biggest retailer, is expected to be worth $10 billion by early 2024. The company plans to open between 30 to 40 new stores by 2024. Athleta, the other retailer owned by Gap, is estimated to reach a net worth of $2 billion by 2024.
Following the announcement, Gap stock shares reportedly shot up by 14% on October 22 amid the news that the company is expected to generate significant revenue in the next few years. The stock hit a 52-week high of $21.65, and currently has a total market value of $7.9 billion.
