Economy

Gap, Banana Republic stores closing

Gap, Banana Republic stores closing”

Gap Inc.is making bold moves to address declining retail sales in their longstanding stalwart brands, Gap and Banana Republic, announcing Wednesday that they're closing 200 underperforming stores and will then open 270 new locations of the two brands that are doing well for them, Old Navy and Athleta.

As a part of its growth strategy, Gap has made a decision to focus its energies on Old Navy and Athleta, which it believes will exceed 10 billion dollars and 1 billion dollars in net sales respectively, in the next few years, driven by growth in online and mobile channels, United States store expansion, and continued market share leadership in loyalty categories.

There are now about 2,000 Gap and Banana Republic stores worldwide, according to public filings, so the closures would likely impact about 10% of them.

Gap CEO Art Peck said sales downturns at Gap and Banana Republic are "significant and acute". Peck referred to Old Navy as "obviously the very important horse pulling the cart right now inside of this company".

When Gap reported earnings last month, Old Navy outperformed the other brands once again.

Gap said in a statement posted online Wednesday that it also expects Athleta, a trendy athletic wear brand, to drive growth. Those forecasts could be ambitious-Old Navy hit about $6 billion in the 2016 fiscal year.

Louisiana has 15 Old Navy stores, including four in the New Orleans area, but only one Athleta store, located at Lakeside Shopping Center in Metairie. It said it also plans to invest more in its mobile and online services.



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