Gap To Close 21% Of Its U.S. Stores By January

The mid-priced clothing business simply isn’t what it used to be. Today, Gap Inc. announced that it will be closing 175 of its Gap stores in the next few years, and 140 of them will close during this fiscal year, which ends in January. However, it’s just regular Gap stores that are closing: the company’s upmarket Banana Republic brand and downmarket Old Navy brand are doing fine, as are Gap outlets and factory stores.

Coming changes for Gap also mean that the company will be “streamlining” its headquarters staff in San Francisco, cutting 250 positions. Like most retailers, they’re going multichannel, hoping to expand online sales while shrinking their mall-store footprint, since Americans aren’t all that keen on going to the mall anymore. Some stores in Europe will also close. Between corporate-owned and franchise stores, there are Gap stores in about 50 countries.

Right now, there are 675 Gap stores in the U.S., and around 300 outlet stores. There are no planned outlet store closings: that may be an indication of where business is going. Preppy competitor J. Crew isn’t doing so well, but its Madewell brand that includes $548 distressed denim overalls is thriving.

Gap to Close 175 Stores in North America [New York Times]