Clothing brand Gap is to close 175 specialty stores and shed 250 headquarter office staff as part of a concerted effort to increase productivity and profitability.
The bulk of these losses will take place in North America although some will also occur in Europe, allowing the firm to focus on a ‘smaller, more vibrant fleet of stores’ and streamline the decision making process.
Gap Outlet and Gap Factory Stores will remain unaffected by the move.
Gap chief executive officer Art Peck said: “Returning Gap brand to growth has been the top priority since my appointment four months ago – and Jeff and his team bring a sense of urgency to this work. Customers are rapidly changing how they shop today, and these moves will help get Gap back to where we know it deserves to be in the eyes of consumers.”
The turnaround plan is the brainchild of Jeff Kirwan, Gap’s global president, who estimates incurring a $300m sales loss as a result of the store closures in addition to one-off costs of $160m.
On the plus side annualised savings of $25m are expected to be attained from 2016.