American clothing and accessory retailer Gap Inc. announced news on Wednesday (Sept. 6) that it would close approximately 200 brick-and-mortar Gap and Banana Republic storefront locations over the next three years, according to reports by USA Today.
Gap Inc. is the parent company for the Athleta, Banana Republic, Gap, INTERMIX, Old Navy and Weddington Way brands.
“Over the past two years, we’ve made significant progress evolving how we operate,” said Art Peck, Gap Inc.’s CEO and president, in the USA Today article. “With much of this foundation in place, we’re now shifting our focus to growth.”
Despite the 200 store closures, Gap Inc. noted it has its sights set on the future. The company will focus on opening 270 Athleta and Old Navy storefronts, with projected sales for the two clothing brands exceeding $1 billion and $10 billion, respectively. Following the news, Gap Inc.’s share price had increased by more than 6 percent by midday on Wednesday to $25.57, USA Today reported.
Brick-and-mortar stores have recently struggled throughout the retail space, with many locations seeing a decline in sales and foot traffic amid an increased focus on eCommerce retail. According to USA Today, Bebe, JCPenney, Kmart, Macy’s, Rue 21, The Limited and Sears Holdings are among the list of clothing retailers also downsizing their ranks.
Gap Inc.’s brands saw positive sales numbers at stores that had been open at least a year, up 1 percent in Q2 2017. Old Navy’s sales were up 5 percent during that time frame, though Banana Republic saw a 5 percent decrease and Gap dipped 1 percent. The store closures should help the parent company save nearly $500 million in costs over the next few years.
Like many brick-and-mortar retailers, Gap Inc. is shifting some of its focus to eCommerce and building an online retail presence. According to USA Today, the company hopes to become “more nimble” by cutting costs and focusing on its growing brands.