Gap Inc. is moving away from the nation’s malls.
The San
Francisco-based retailer, which was for decades a fixture at shopping
malls around the country, said Thursday that it will be closing 220 of
its namesake Gap stores — or one-third of its store base — by early
2024. That will result in 80% of its remaining Gap stores being in
off-mall locations.
As
part of its restructuring, Gap Inc. said it also plans to close 130 of
its Banana Republic stores in North America in three years.
The
announcement made at a Gap Inc. investor meeting detailed a three-year
plan that calls for closing what amounts to 30% of the company’s Gap and
Banana Republic stores in North America and focusing on outlets and
e-commerce business.
Customers at a Gap Inc. store in New York.
The
moves come as Gap and other clothing retailers are trying to reinvent
themselves during the pandemic, which forced many non-essential stores
to temporarily close in the spring and early summer. The lockdown of the
economy led shoppers to shift more of their spending to online, which
many experts believe will be permanent.
“We’ve been overly
reliant on low-productivity, high-rent stores,” said Mark Breitbard, CEO
of the Gap brand, which was founded in 1969. “We’ve used the past six
months to address the real estate issues and accelerate our shift to a
true omni-model.”
But the company plans to add more of its
thriving low-priced Old Navy and Athleta stores. Executives said that
Old Navy, Gap Inc.’s biggest business with annual sales of $8 billion in
its most-recent year, is forecast to grow to $10 billion by early 2024.
The plan is to open 30 to 40 new stores in the next three years. Old
Navy now has about 1,200 stores.
Athleta, which sells activewear,
is forecast to double in revenue to $2 billion in that time frame. It
has about 200 stores in the U.S. Its goal is to have roughly 300.