Gap Closes Down 175 Stores in Bid for Savings

The ubiquitous American retailer Gap, has announced it will be shutting down a quarter of its non-outlet stores, that is a whopping 175 stores, across North America in the next coming years. One hundred and forty of those should be closed by the end of January 2016. Along with the significant loss of employees as a grim consequence to these closures, Gap is also to lay off 250 corporate employees from its headquarters in San Francisco, California.

The end goal for the high-street retailer is to manage annual savings in condensing its trade. After the one-off closure costs of $300 million in sale losses and an approximate $140 to $160 million in operational costs, Gap should start reaping annualised savings of $25 million. A number of European stores should also cease all activities in the near future although Gap remained silent on how many exactly.

This seminal change comes about after heavy disruption for Gap in the upper echelons of its management and design teams in the past few years. Rebekka Bay had replaced Patrick Robinson in 2011 as creative director before her role was left — and remains — unfilled. Since then, the merchandising and design teams have been entirely overhauled and hopes are pinned on their potential prowess. Art Peck was appointed CEO of Gap in February while global president Jeff Kirwan joined the company in December.

"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," Kirwan said in an interview with WWD.

It is fair to say that Gap has never been a very trend-focused company compared to its fast-fashion counterparts such as Zara or H&M, which can knock off designer ‘it’ garments in the blink of an eye. The young and fashion-hungry customer has decidedly been looking elsewhere after poorer quality clothing and decried monotonous designs have been spewed out by Gap for a few years now. The beleaguered company is resolutely trying to revert the chronic decline of its sales.