Gap Inc. plans to close stores in the U.S., while expanding in China. The struggling retailer, which runs the Gap, Old Navy and Banana Republic chains, detailed plans on Thursday to close 189 locations, or 21 percent of its namesake Gap stores in the U.S., by the end of 2013. At the same time, the largest U.S. clothing chain said it plans to triple the number of Gap stores in China from about 15 by the end of the year to roughly 45 by the end of next year.
The moves are related to the company’s previously stated goal of reducing its overall square footage in the U.S. by 10 percent from 2007 to the end of 2013, while roughly doubling revenue from outside of the U.S. to 30 percent by the end of the same year. Like many U.S. companies of all stripes, Gap has been looking overseas for growth as Americans continue to cut back on spending during the down economy in the U.S. But even before the U.S. economy took a turn for the worse, Gap lost its fashion edge. Its sales in the U.S. have eroded considerably since it drove America’s love of khakis and all things business casual in the 1990s because of growing competition from specialty retailers like Abercrombie & Fitch and cheap chic merchants like H&M.
The company also said it plans to keep the same number of Old Navy stores in North America, but it’s cutting down the size of each store. Old Navy had decreased its square footage by 8 percent to 18.5 million since 2007. The company plans to add 50 new Gap Outlet stores by the same period, which will leave 250 stores by the end of 2013. Overseas, the company said its first Gap flagship in Hong Kong will be opening in a few weeks, as is the first Banana Republic store in Paris later this year. The company also plans to expand Old Navy outside of North America to Japan within the next 18 months. On the news, Gap’s shares rose 11 cents, to $17.96 per share. For more information on the Gap store closings check out the full article over at yahoo.com or click here. If you have some free time check out our homepage http://www.kimberleyvassal.com!
- Gap Closing Scores of Stores (newser.com)
- Gap closing stores in US (seattletimes.nwsource.com)
- Gap closing about fifth of U.S. stores, expanding in China (usatoday.com)