Gap Inc. to Shutter 350 Stores, Transition Focus from Malls to E-Commerce
SAN FRANCISCO — Gap Inc. (NYSE: GPS), a longtime apparel tenant in enclosed regional malls nationwide, has announced plans to close 350 stores under its Banana Republic and Gap banners in an effort to transition focus to e-commerce and off-mall retail locations.
Store closures are scheduled for completion by fiscal year 2023, which ends Feb. 1, 2024, with 75 percent scheduled to close in 2021. By that time, the company expects 80 percent of its revenue to come from e-commerce and off-mall locations, including street-front retail stores and shops in strip and outlet centers.
Gap is the latest mall staple to shutter locations amid struggles due to the COVID-19 pandemic, following Ascena Retail Group — the parent company of Ann Taylor, Justice, Loft, Lane Bryant, Catherines and Lou & Grey — Bed Bath & Beyond, J.C. Penney and GNC.
Gap’s comparable sales were up 13 percent at the end of the second quarter, due in large part to an expanded focus on e-commerce and to the success of the company’s activewear brand, Athleta, which saw a 6 percent increase in sales during the quarter. The company also began producing and selling face masks at the start of the pandemic, sales of which brought in $225 million as of Oct. 2.
“Our strong performance in the second quarter reflects the customer response to our brands, products and experiences, particularly as we’ve rapidly adapted to the changing environment,” says Sonia Syngal, CEO of Gap Inc. “We nearly doubled our e-commerce business, with approximately 50 percent online penetration, demonstrating our ability to pivot to a digitally-led culture.”
Shares of Gap Inc. stock hit a 52-week high, rising 14 percent on Thursday following the company’s announcement to shrink its brick-and-mortar footprint. The company’s stock price closed at $21.15 per share that day, up from $16.97 on Oct. 22 last year.
San Francisco-based Gap Inc. is a leading global retailer offering clothing, accessories and personal care products under brands including Old Navy, Gap, Banana Republic, Athleta, Intermix, Janie and Jack and Hill City.
— Katie Sloan