GAP to Close 21% of U.S. Stores

Gap Inc. which operates the GAP, Old Navy and Banana Republic retail chains released detailed plans yesterday for the closing of nearly 200 of their U.S. retail locations. Glenn Murphy, CEO of Gap Inc. explained that the retailer would be looking to reduce the chain’s overall square footage in the U.S. by 10% for the end of the 2013 calendar year while simultaneously increasing presence in China and other emerging Asian markets by three-fold.

The company, which is currently the largest U.S. clothing chain in the world has been in dire straights since the end of its heyday in the 1990s, loosing ground to domestic specialty retailers such as Abercrombie & Finch and J. Crew as well as international fast fashion merchants like H&M. Now with the U.S. recession things have gone from bad to worse for Gap Inc. both The GAP and Banana Republic have been posting continued drops in revenue for the last few years and Old Navy while not experiencing the same revenue drops has seen its once robust growth all but stop.

Despite the somber nature of the news Gap Inc. management seems optimistic that like many U.S. companies the retail giant will find new life in the international markets, with Glenn Murphy telling investors “The combination of our global strategy and formidable growth platform puts us in a strong position to expand our reach in the top ten apparel markets worldwide. In North America, we’re taking a number of steps to improve sales in the near-term, and I’m confident that with a strong management team in place, we’re well position for sustained growth across the business.”

Whether or not you share Mr. Murphy’s optimism for the future of the company, and if you don’t you’re not alone because business experts worldwide have long been eying GAP’s slow decline as a sign that the retailer may not be around forever; the silver lining to this particular cloud is you can look forward to the big close-out sale which will probably be coming to a GAP near you.

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>