Gap to close 175 North American stores

This photo taken on May 14, 2014, shows signage outside a Gap store in the Shadyside section of Pittsburgh. The Gap Inc. reports quarterly financial results after the market closes Thursday, May 21, 2015. (AP Photo/Gene J. Puskar)

(CNNMoney) — Gap will close 175 stores in North America, leaving about 800 open, and will layoff 250 employees this year.

Gap said Monday it will also close a “limited number” of Gap stores in Europe over the next few years.

Store closures will only affect Gap stores, and not its other brands — Banana Republic, Old Navy, Intermix and Athleta — or its outlet and factory stores, and the brand will continue run about 1,600 Gap stores worldwide.

The company said the layoffs will mainly affect employees at its San Francisco headquarters. As of January, Gap employed about 141,000 people globally.

The brand has been struggling for a few years now. Gap reported dismal sales for the first quarter of 2015, down 10% from last year. It recently also shut down the Piperlime line.

The company announced the store closures and layoffs as part of an effort to cut costs and boost sales. It estimates the restructuring will cost the company about $150 million.

Gap executives will give more details on the changes in an investor meeting on Tuesday at 9 a.m. PST.

“Returning Gap brand to growth has been the top priority since my appointment four months ago – and Jeff and his team bring a sense of urgency to this work,” said Art Peck, Gap Inc. chief executive officer. “Customers are rapidly changing how they shop today, and these moves will help get Gap back to where we know it deserves to be in the eyes of consumers.”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s