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Gap just announced it’s closing 230 stores and says dozens more are doomed


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Gap just announced it’s closing 230 stores and says dozens more are doomed in the next few years
Mary Hanbury, Business Insider US |  March 1, 2019

  • Gap Inc. announced Thursday that it will close 230 of its namesake brand’s stores and  split the company in two.
  • In an earnings call shortly after the announcement, CEO Art Peck said the company would close up to 50% of its specialty fleet over the next few years.
  • Specialty stores are defined as any Gap store excluding outlet and factory locations.

Gap is making radical changes.

On Thursday, Gap Inc. announced it  will split the company in two and close 230 of its namesake brand’s stores over the next two years.

In an earnings call shortly after the announcement, Gap CEO Art Peck said the company would close up to 50% of its specialty fleet over the next few years. Specialty stores are defined as any Gap store excluding its outlet and factory locations.

Peck said most of these closures will occur in the US and will leave the brand with “a smaller, but healthier specialty fleet.”

At the start of 2018, there were 725 global specialty stores, excluding China, Teri List-Stoll, Gap’s chief financial officer, said Thursday. “Between the 68 specialty stores that we closed this year and the 230 additional specialty closures that we announced today, this represents closure of nearly half the fleet and there will be additional natural expirations and closures beyond 2020,” she said.

This means we could see more than 60 more stores shutter in the next few years. A spokesperson for Gap confirmed this information to Business Insider.

The Gap brand has struggled in recent years – same-store sales were down 5% in the fourth quarter of 2018 and overall for the year.

The company has increasingly leaned on heavy discounting to clear inventory, which not only erodes profit margins but also damages the brand image.

Peck is determined to make the necessary strides to fix the business.

“We have our work cut out for us this we acknowledge,” he said on Thursday. “But we know what we need to do to win. And we are committed to restructuring the fleet and revitalizing Gap brand to unlock shareholder value and drive profitable growth.”

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18 minutes ago, karbatal said:

Where are American people shopping instead? It's interesting to know where the consumers are moving to understand what's happening. 

Amazon is destroying retail stores. I am not sure that's where people are getting most of their clothing, but brick and mortar is dying. Even lots of malls in the U.S. are becoming empty shells.

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I honestly can't remember the last time I've gone to a 'regular mall' (outlet malls...different story) or had any desire to when I used to LOVE malls. Yes, w/ Amazon, eBay etc etc..there's simply no point. Granted there are certain things I MUST try on in the store but majority of clothes (esp. sneakers, socks and many other things) I know will fit, the deals I find on Amazon or eBay (to start) are simply unbeatable and get the item w/in a few days. Plus no driving to mall and dealing w/ crowds. Far as Gap and Banana Republic (same company) I love their clothes (esp. Banana Rep.). No doubt they're hurting because the last few years I get endless e-mails (coupons, major sales, credits etc..)w/ them practically paying me to go into their stores lol. 10-15 yrs ago would get maybe only a few a week. Maybe a 25% off coupon here/there or whatever. Today, unbelievable what I get several x a day! 

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2 hours ago, Ciccone's Cheeks said:

I honestly can't remember the last time I've gone to a 'regular mall' (outlet malls...different story) or had any desire to when I used to LOVE malls. Yes, w/ Amazon, eBay etc etc..there's simply no point. Granted there are certain things I MUST try on in the store but majority of clothes (esp. sneakers, socks and many other things) I know will fit, the deals I find on Amazon or eBay (to start) are simply unbeatable and get the item w/in a few days. Plus no driving to mall and dealing w/ crowds. Far as Gap and Banana Republic (same company) I love their clothes (esp. Banana Rep.). No doubt they're hurting because the last few years I get endless e-mails (coupons, major sales, credits etc..)w/ them practically paying me to go into their stores lol. 10-15 yrs ago would get maybe only a few a week. Maybe a 25% off coupon here/there or whatever. Today, unbelievable what I get several x a day! 

They are desperate. They send me so many damn coupons too! :lmao:They once sent me a $40 coupon that had almost no fine print exceptions and I was able to use it on a purchase that was almost exactly $40. All I paid was like $3 shipping!

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6 hours ago, Sky Fits Heaven said:

How UGLY are those clothes?? Even in the context of their time. 

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11 hours ago, karbatal said:

Where are American people shopping instead? It's interesting to know where the consumers are moving to understand what's happening. 

online - it is so easy to return stuff that you have purchased online if you don't like it or it doesn't fit

 

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Sorry, but I am NOT in the camp of getting all clothes online. The idea of buying all of that online and having to do constant returns would drive me up the fucking wall. I have a hard enough time in stores as it is. :lmao:  Plus, I'm extremely picky about fabric too - the feel, the stretch (or not)...and how fitted/cut/sewn a garment is too. And not all sizing and cut are universal between brands. You can't check any of that on a damn computer screen. More than half the stuff I see I like and then inspect in the stores, I end up putting back anyway.

 

 

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23 hours ago, jacket said:

THey look so happy...

Yeah what's up with the lack of enthusiasm?

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Once in a while I end up with a Gap gift card and I always struggle to find something there. Very bland. They own Old Navy and it's a similar situation there, but you can at least find a cute t-shirt.

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