Things aren’t looking too great for Gap Inc. which is closing down 175 of its stores in North America. Gap’s sales have been in decline over the last five quarters and new CEO Art Peck is trying to turn the tide for the ailing retailer and its Banana Republic sister store. The move is supposed to save Gap Inc. $25 million a year once the operation is complete. Gap expects to lose $300 million in sales as a result of the closures and hopes to have 140 of its locations eliminated by January.
Layoffs are also happening for 250 people in the retailer’s corporate leg. Gap’s global president Jeff Kirwan says that many of the stores closing “don’t represent the best of our brand.” After the closings, Gap will be left with around 800 stores – 300 outlets and 500 mainline stores.
“Returning Gap brand to growth has been the top priority since my appointment four months ago — and Jeff and his team bring a sense of urgency to this work,” Art Peck said. “Customers are rapidly changing how they shop today, and these moves will help get Gap back to where we know it deserves to be.”