GAP downsizes in home territory | RetailDetail

GAP downsizes in home territory

GAP downsizes in home territory

Californian clothing brand GAP will cut down its distribution network with 175 closures in North America and a limited number of store closures in Europe as well. The group says it has to do this because of altered purchase habits.

175 North American stores will close

140 of the 175 planned store closures in North America will shut down this year: Gap Outlet and Gap Factory Stores will not be harmed in the process and not close any stores, which means only the parent brand will face closures.

 

There will also be some store closures in Europe, but there was no mention of how many. On a worldwide scale, 250 people will lose their job, with the majority at its North American main office.

 

Gap will have 500 Gap stores and 300 Gap Outlet stores in North America after the restructuring is finalized, while it will also have an online presence. Worldwide, Gap will have 1,800 stores, both franchise and its own stores, in 50 countries.

 

Gap lagged behind quickly

Gap will lose some 300 million dollars (267 million euro) in turnover because of these closures. Just last year, the entire Gap group (including brands like Banana Republic, Old Navy, Athleta and Intermix) managed a 16.4 billion dollars (14.60 billion euro).

 

The move will also cost 140 - 160 million dollars (125 - 142 million euro), with 55 - 75 million dollars (49 - 67 million euro) in write-offs and devaluations. A positive note is that the restructuring will help save 25 million dollars (22 million euro) on a yearly basis.

 

Over the past few months, Gap lost customers to competitors like Zara and H&M and during 2015's first quarter, it lost 10 % in like-for-like turnover. Closing down less profitable stores should help improve overall profitability, the company hopes.

Questions or comments? Please feel free to contact the editors


Carrefour Belgium launches personal shoppers with 90 minutes delivery

19/07/2018

In the intense struggle for the customers' favour, Carrefour Belgium has presented a new service - featuring personal shoppers, delivery within 90 minutes and an app that can be expanded into a market place.

Cultured meat in stores by 2021?

18/07/2018

Commercialization of laboratory cultured meat is coming closer. Pioneer Mosa Meat has raised 7.5 million euros for the construction of a factory that will bring an affordable product to the market within three years.

Aldi commits to renewable energy

17/07/2018

Aldi Nord has published an ambitious international climate policy: the retailer wants to reduce greenhouse gas emissions by 40% by 2021 and reveals some compelling figures in its second sustainability report.

Discounters' major opportunities for growth in Western Europe

16/07/2018

Despite the multitude of stores in most European markets, discounters plan to open up to ten million square metres of store surface in five years' time. Even in so-called saturated markets they still see a lot of chances for growth, LZ Retailytics says.

Contamination bites huge chunks of Greenyard's value

16/07/2018

Vegetable producer Greenyard is under attack after a listeria contamination in its Hungarian factory. The company says to have taken all necessary measures, but the share price plummets.

Starbucks dumps plastic straws worldwide

12/07/2018

American coffee company Starbucks will ban plastic straws in their stores starting from 2020. A small step for coffee enthusiasts, but a big step for the environment, as the coffee giant uses about a billion straws every year.