Gap and Banana Republic will close more than 225 stores worldwide this year as their parent company slims down its brick-and-mortar footprint.
Gap Inc’s Thursday announcement suggests it’s closing far more stores than it expected in March, when it said it would end the 2020 fiscal year with about 90 fewer company-operated shops. The San Francisco-based firm expects to close even more locations in 2021.
The latest number accounts for openings of new stores, Gap said. Many of the soon-to-be-shuttered stores are located in malls, chief financial officer Katrina O’Connell said, adding that the company would provide more details of the closings during its October investor meeting.
Gap and Banana Republic were the conglomerate’s two weakest-performing segments in the second quarter. Their net sales plunged 28 percent and 52 percent, respectively, compared with a 5 percent drop for Old Navy and a 6 percent gain for sportswear brand Athleta.
Banana Republic suffered from stay-at-home orders as shoppers eschewed its dressy workwear for more casual clothes, according to Gap Inc. And the Gap brand — which recently announced a collaboration with rapper Kanye West — is trying to maximize online demand while the store closures proceed, the company said.
The parent company permanently shuttered 137 Gap and Banana Republic shops and opened just 21 in the quarter that ended Aug. 1, according to its earnings report. The company, which also owns the Intermix and Janie and Jack brands, had 3,814 stores worldwide as of that date, including about 600 franchise locations.
Gap said it started the quarter with almost all of its stores closed because of the coronavirus pandemic. The temporary closures led to an 18 percent drop in net sales for the quarter even though 90 about percent of the stores had reopened by Aug. 1, the company said.
Gap shares were down about 1 percent in premarket trading Friday at $17.21 as of 8:44 a.m.
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