Gap urgently closes hundreds of stores after Q3 earnings

Despite an increase in profits Gap is closing
stores. The American brand’s revenue increased by 7 percent, with a
net profit increase to 266 million dollars. However, in comparison to
the Gap Inc. parent company’s other labels such as Old Navy and Banana
Republic, the namesake brand is the weakest. Overall sales in the last
12 months have fallen by 7 percent.

Gap currently operates 775 stores globally, and is now considering
closing down hundreds of underperforming locations, including flagship
locations, “with urgency,” in order to make up for falling sales.

“There are hundreds of other stores that likely don’t fit our
vision for the future of Gap brand specialty store, whether in terms
of profitability, customer experience, traffic trends,” chief
executive officer Art Peck said in Tuesday’s earnings call. “There
likely will be a cash cost to exit many of these stores, which we will
attempt to minimize. But I plan to exit those that do not fit the
future vision quickly. I’m going to move thoughtfully but
aggressively.”

The retailer has not yet decided an exact number of store closures
or which store locations will be shut down. Peck plans to share a more
detailed store closure outline when the company announces its plans
for the next fiscal year.