Gap has announced some serious cuts to improve its overall performance. The brand plans to close about 175 specialty stores in North America over the next few years, with about 140 closures happening in fiscal 2015. The company estimates an annualized sales loss of approximately US $ 300 million associated with the store closures. Gap Outlet and Factory stores will not be affected. The brand will also reduce approximately 250 employees from its headquarter during fiscal 2015.
After the closing measures, Gap wants to reach a number of 800 Gap stores in North America (500 Gap specialty locations plus 300 outlet stores) and a global presence of 1,600 company-operated and franchise stores in 50 countries. Gap estimates annualized savings from these actions to be approximately US $ 25 million, beginning in 2016.
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Next to a more trenddriven design, Gap Inc. wants to focus stronger on providing a seamless shopping experience across all channels. The brand will pursue global growth opportunities, most notably in China, where sales have grown to nearly 500 million in four years and Gap e-commerce sales expanded by about 60% between 2013 and 2014.
