Gap Inc. might plan to shut down hundreds of its stores to combat sluggish sales and to improve margins.
The clothing retailer has more than 3,000 stores across the globe, out of which the weakest performers in recent times seem to be those of its namesake brand. In the third quarter, sales at Gap stores open for at least 12 months declined -7%, while the company’s Old Navy and Banana Republic store sales growth were still in positive territory.
According to a CNBC report, Gap Inc.’s CEO Art Peck said Tuesday evening during a call with analysts that the company is considering to shutter under-performing stores with "with urgency". Peck indicated that by addressing the bottom half of its fleet of Gap stores, the company could add more than $100 million to earnings. Gap Inc. has not yet disclosed the locations of stores it is looking to shut down.