Gap Closing Stores Across North America
Gap Inc. is closing stores throughout North America, while expanding its retail presence in China, the Associated Press reports.
Gap Inc., whose various holding include Gap, Old Navy and Banana Republic, announced Thursday plans to close 189 North American Gap locations, or 21 percent of its total number of stores, by 2013. At the same time, the company intends to triple the number of its locations in China and add a flagship Gap store in Hong Kong.
"The combination of our global strategy and formidable growth platform puts us in a strong position to expand our reach into the top 10 apparel markets worldwide," said Glenn Murphy, Gap's CEO, in a statement. "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 positioned for sustained growth across the business."
The San Francisco-based retailer has struggled in recent years in the face of reduced domestic demand as well as heavy competition from online retailers and cheaper chain stores such as H&M. According to the AP, in the second quarter of 2011, Gap's overall revenue at stores opened for at least a year fell by 2 percent. The Gap brand has suffered annual revenue drops for six consecutive years, while Banana Republic posted a 2 percent decline in 2010-11. Old Navy's revenue was flat.
With the domestic market weakening, Gap is increasingly turning its attention overseas. Gap's Hong Kong store is set to open in two weeks, and by year's end Gap will have opened its first Paris, France, location. Most significantly, Gap hopes to take advantage of China's burgeoning consumer market by tripling its retail presence from 15 stores to 45.