It seems that the company is about to shut down 175 stores, which represents almost a fifth of its total – 18 percent to be more exact.
It does not come as a huge surprise that the San Francisco based company is trying to cut down on costs, given the fact that it has been struggling for quite a while to maintain certain standards and keep up with trends.
They will decide which stores to close basing their decision on performance and on the location. Gap Inc. currently owns not only Gap but also Banana Republic and Old Navy. Various stores from Europe that are hosting these brands will be shut down as well.
This obviously means the loss of many jobs, even if representatives of the company have refused to say how many people work in these locations and whether or not they will be laid off or just relocated.
“These decisions are very difficult, knowing they will affect a number of our valued employees, but we are confident they are necessary to help create a winning future for our employees, our customers and our shareholders,” stated Jeff Kirwin, who is the global president of Gap.
Moreover, the people working at the company’s headquarters will not remain unaffected. It was estimated that about 250 jobs will be lost there too.
Within the last few months, there have been many changes in the company. The leadership suffered modifications for both Banana Republic and Gap. In 2015, the CEO of the company also changed, when Art Peck took the position in February. The Piperlime line was also removed.
The brand that once used to be a huge success and extremely popular with many generations seems now to be in quite a pickle, given the fact that so many things are changing to cut down on costs.
It was said that the reduction in the number of stores functioning will enable the company to save around $25 million a year. Gap currently produces $16 billion a year.
This will most likely give it the opportunity to resuscitate its fashions and make the brand more appealing to customers.
After the closings, the company will still have about 800 stores functioning in the United States. Gap outlet and Gap Factory stores will not be affected by this decision because these usually make a lot of profit, which was estimated to be around $ 300 million.
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