Long Island, NY – San Francisco, California – Today, June 15, 2015, Gap Inc. released a group of strategic actions which are aimed to improve business performance and build their company for better production in the future.
At one point, Gap had the rights to claim that they were one of the world’s largest specialty-apparel chains. They expanded to nearly every mall and city center in the United States because of the vast amount of shopping consumers would do on a daily basis. Sales increased as customers flocked to stores to get the latest deals and price knockdowns on clothing for their families.
With the rise of the internet, many consumers are not traveling to stores to purchase clothing anymore. Gap claims that their largest source of income comes from online sales. As a result, Gap Inc. announced that they will be closing multiple stores across the U.S. as an effort to save money and create a more dynamic shopping experience online.
A statement by Gap Inc confirmed that in the next few years they will be shutting down stores all across the country. “In order to drive productivity improvements and showcase the brand in the most successful locations, Gap will close about 175 specialty stores in North America over the next few years, with about 140 closures occurring this fiscal year. These changes will not impact Gap Outlet and Gap Factory Stores. In parallel with these moves, the brand will close a limited number of European stores during this period.”
Beginning in 2016, the company estimates that they will annually be saving about $25 million from these actions.
Jeff Kirwan, Global President for Gap, said “Our customers and employees want Gap to win. We’re focused on offering consistent, on-brand product collections and enhancing the customer experience across all of our channels, including a smaller, more vibrant fleet of stores.”
A video released by Wochit Business explains the that retailer Gap is to close 175 stores across North America over the next few years as it attempts to turn around the business. The San-Francisco-based company said in a statement that a “limited number” of European shops would also close. In addition, Gap will also cut about 250 jobs from its head office.
Since Kirwan was appointed to lead Gap in 2014, he implements an aggressive agenda that is designed to make the brand stronger as well as a positive framework that focuses on the American style. At the same time, he wants to rebuild the brand product operating model to increase speed, predictability, responsiveness and enable greater competitiveness.
Changes in Gap inc. in the next year or two will result in the reduction of the brand’s headquarter workforce primarily in North America by approximately 250 roles during 2015. As well, this will eliminate hundreds, even thousands of entry level positions of employees in stores across the Country.
Kirwan added, “These decisions are very difficult, knowing they will affect a number of our valued employees, but we are confident they are necessary to help create a winning future for our employees, our customers and our shareholders.”
After closing 175 plus locations, Gap will continue to serve North American Customers through approximately 800 Gap Stores. Including 500 Gap specialty locations and 300 Gap outlet stores across the country.
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