It’s out with the old — or underperforming — and in with the new at Gap. In a bid to turn around sales and get people into stores, the mall staple says it will close about 200 Banana Republic and Gap locations, while opening 270 Old Navy and Athleta stores over the next three years.
The store changes were announced today at the Goldman Sachs 24th Annual Global Retail Conference as part of what the retail company calls its long-term, balanced growth strategy.
Gap says the strategy is intended to shift focus to where customers are shopping, while also increasing the presence of its more profitable brands.
For instance, the Old Navy brand is expected to exceed $10 billion in sales over the next few years, while Athleta is estimated to exceed $1 billion in sales.
On the other side of the retail spectrum, the company’s stalwart brands, Gap and Banana Republic, have seen sales fall consistently in recent years. Just last month, Gap reported that sales at its namesake stores fell 1%, while Banana Republic’s sales fell 5%.
To that end, Gap says it will concentrate on brands that make it money: Athleta, Old Navy, and other “value expressions.”
In all, Gap brands will see a net increase of 70 stores over the next three years, as it closes 200 Gap and Banana Republic locations and opens 270 Old Navy, Athleta, and other stores. A list of stores slated for closing has not yet been released.
The changes, the company notes, will result in an expected $500 million in expense savings over the next three years.
“We will leverage our iconic brands and significant scale to deliver growth by shifting to where our customers are shopping – online, value and active,” Art Peck, president and CEO of Gap, said today.