Gap Shrinking US Operations While Expanding Overseas

October 14 00:00 2011

New York, October 14 (RainbowNewsLine.com) – Nearly 200 stores are being closed down by Gap Inc (NYSE: GPS) and many other stores will be downsized in the US mainly because of plummeting profits and declining sales at locations open at least a year. The long struggling San Francisco Company said Thursday that while shrinking its operations in the US, it will focus on international expansion.

The apparel giant plans to trim the number of its Gap brand stores in North America by 700 by the end of 2013, which will mean a decrease of 21% from the 889 stores which were in operation at the end of July.

A spokeswoman for Gap Inc., parent to the Gap, Banana Republic and Old Navy chains, did not specify which stores would close. Spokeswoman Louise Callagy said, “We’ve been in some malls for a really long time; in some instances the demographics may have changed, so it may not make sense for a Gap brand store to be there anymore,” and added that “The goal overall is to return the brand to health, and part of a healthy brand is a high-performing fleet” of stores.

Gap reported a 19% decline in profit in the most recent quarter and a slump in sales at stores open at least a year. Its stock has gone down 19% year to date, while the average retail stock in the Standard & Poor’s 500 Index is up 4%.

At an annual investor meeting in New York, plans for overseas growth were included in the business overview provided by the executives.

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