Gap to close 34% of namesake U.S. stores by end of 2013
Gap Inc. is closing stores and downsizing others in the U.S. as it focuses on international expansion, the San Francisco company said Thursday.
The long-struggling apparel giant plans to reduce the number of Gap brand stores in North America to 700 by the end of 2013, a 34% decrease in the number of those stores when compared to the end of 2007. It didn't specify which stores would close.
The company's Old Navy brand will have roughly the same number of stores in North America, but the locations will continue to downsize in terms of square footage. By the end of fiscal year 2013, Old Navy "expects to potentially remove" another 1 million square feet.
"In North America, sales are expected to grow modestly on its smaller, healthier specialty store fleet supplemented by sales growth in its online and outlet channels," the company said in a statement.
Gap Inc. has suffered from weak sales for years as shoppers have turned to trendier rivals to shop. Although it has had some success in turning things around -- namely a line of so-called premium denim that launched at Gap stores two years ago -- analysts say many of its fashions, such as women's tops, have underperformed.
Gap shares rose as high as $18.12 earlier but were off 8 cents to $17.77 shortly before 10 a.m. PDT. The stock is down 20% year to date, while the average retail stock in the Standard & Poor's 500 index is up 3.8%.
-- Andrea Chang
Photo: A Gap store in San Francisco. Credit: Bloomberg