“Returning Gap brand to growth has been the top priority since my appointment four months ago — and [Gap president Jeff Kirwan] and his team bring a sense of urgency to this work,” said Gap Inc. CEO Art Peck in a statement. “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.”
140 of the store closings will occur this fiscal year. The company estimates a loss in sales associated with those stores this year of $300 million, and a savings of $25 million starting in 2016. There will also be a one-time cost of between $140 million to $160 million for the store closings.
When the closings are finalized, the company will operate about 500 Gap stores and 300 Gap Outlets (the Gap Outlet business was not affected by the closings) in North America.
Gap president Jeff Kirwan, who was promoted to the position in November, said the goal was for Gap to have a “smaller, more vibrant fleet of stores.”