NEW YORK – Gap Inc. said Monday that it will close its 19 Forth & Towne women’s stores, ending an 18-month experiment.
Closures are expected to be completed by the end of June. Pre-tax charges for the exit are expected to be about $40 million, most of them taken during the first half of the new fiscal year.
“Forth & Towne was a great test of a promising concept and an illustration of the innovative risks you need to take in our business,” said Bob Fisher, Gap’s chairman and interim president and chief executive officer. “We made the tough decision to close the brand and focus our efforts on stabilizing the existing businesses.”
About 550 employees will be affected by the decision, and Gap said it is attempting to place as many as possible in positions with its Gap, Old Navy and Banana Republic divisions.
Gary Muto, former president of Gap brand and an 18-year veteran of Gap Inc., is president of Forth & Towne. Gap spokesperson Greg Rossiter said that no decision had been made about Muto’s status with the company at this time.
Gap said in a statement that “a thorough analysis revealed the concept was not demonstrating enough potential to deliver an acceptable long-term return on investment. Instead, the company believes that future investments should be focused on turning around its Gap and Old Navy brands as well as supporting other growth initiatives that have greater potential of creating shareholder value.”
Gap is scheduled to report its fourth-quarter and full-year results on March 1.