Gap closings: Gap to close 189 US stores; sets sights on China
Gap closings will reduce US locations to 700 by 2013. With Gap closing hundreds of stores around the country, where will Americans shop now?
With Gap closing hundreds of store locations around the country, where will Americans shop now?
Gap Inc., the clothing retailer which runs the Gap, Old Navy, and Banana Republic retail chains, announced Thursday that it would be closing 189 Gap locations across North America by the end of 2013. The move comes as part of the struggling retailer’s goal of reducing its presence in North America. By 2013, there will be an estimated 700 in the region, down from 1,056 in 2007.
Worldwide, the company will have closed 34 percent of its so-called “namesake” stores by the end of 2013.
“In North America, we’re taking a number of steps to improve sales in the near term, and I’m confident that with a strong management team in place, we’re well positioned for sustained growth across the business, ” Glenn Murphy, chairman and CEO of Gap Inc. said in a statement.
“The brand plans to continue downsizing its fleet in North America, and expects to potentially remove another 1 million square feet by fiscal year end 2013,” a company release read.
At the same time, Gap is expanding its footprint overseas, opening a flagship store in Hong Kong and tripling its locations in China from 15 to 45. The company plans to open a Banana Republic in Paris later in the year, and will expand Old Navy, the cheapest store of the Gap triumvirate, into Japan within the next 18 months.
Financially, the overseas expansion may be a shrewd move for Gap, Inc., whose North American revenue has dropped each of the past six years. American consumers are spending less in general: retail sales went flat in August, and according to the Bureau of Labor Statistics, consumer spending fell 2 percent in 2010, with Americans spending less on things like apparel.
Shares of Gap stock rose 11 cents following the news.