Gap Inc. CEO Art Peck says the retailer is likely to shutter as many as 100 of its 775 namesake U.S. Gap stores.
The retailer's Banana Republic stores are outperforming its Gap stores
The Gap brand has for years been dragging down overall sales at this conglomerate that also includes Athleta, Banana Republic and Old Navy.
In the third quarter, sales at Old Navy grew by 4 percent, and those at Banana Republic rose by 2 percent, while Gap stores saw sales shrink by 7 percent.
"There are hundreds of other stores that likely don't fit our vision for the future of Gap brand specialty stores, whether in terms of profitability, customer experience [or] traffic trends," Peck said on a third-quarter earnings call. "The range from the very best to the very worst stores is extremely broad."
Peck says the company is looking to make decisions about shutting stores "with urgency," including the closures of some of Gap's "amazing flagships."
Gap Inc. CEO Art Peck
"There likely will be a cash cost to exit many of these stores, which we will attempt to minimize," Peck told analysts during the call. "But I plan to exit those that do not fit the future vision quickly; I'm going to move thoughtfully but aggressively."
Landlords will probably be eager to reclaim any vacated Gap spaces, as many of the units in question are located in prime spots within individual properties and will be relatively easier to re-lease, observers say.
Old Navy keeps growing In November Old Navy opened its sixth store, at Chicago’s Marshfield Plaza, thanks to the Neighborhood Opportunity Fund, a grant that Mayor Emanuel's office created to help bring jobs and other economic resources to needy communities
Gap Inc., meanwhile, says it expects to open about 25 company-operated stores, net of the closures and repositions, in fiscal 2018. The company says the store openings will concentrate on Athleta and Old Navy locations, with the closures weighted toward the Gap banner and Banana Republic.
Several months ago Old Navy announced that it was on track to open roughly 60 or 70 stores by the end of fiscal 2018. As of now, there are about a dozen more of those still to go.
By Brannon Boswell
Executive Editor, Commerce + Communities Today
