Updated 03:49 PM EDT, Sat, Sep 18, 2021

Gap Closing 175 Stores in North America; $300 Million Sales Drop Expected

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With the economy, being as it is, it is not surprising that another major brand name is closing down a number of its stores in order to strengthen its brand.

According to NBC News, Gap Inc., which owns brands like Gap, Old Navy, and Banana Republic, announced on Monday that it will close 140 Gap stores in North America and an undisclosed number of stores in Europe by the end of the fiscal year. In total, the company plans on closing 175 of its namesake stores and cutting 250 jobs from its headquarters.

Bloomberg reported that the closures and job cuts are made in an attempt for the company to recover from five straight quarters of declining sales.

In a statement cited by Business Insider, Gap CEO Art Peck noted that "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."

Fortune also reported that the closing of over a hundred stores and job cuts will cost the company about $300 million in annual sales, which is not especially good for their numbers, considering that last year, the brand's revenue in North America was listed to be only under $4 billion.

While this seems to be a reasonable action from the struggling brand, an analysis from Forbes said that closing many of its stores will not fix its biggest problems, as the brand has been hurt by the less expensive, more stylish brands that now dominate the fashion scene.

While parents still love buying Gap and its brands for children, Forbes noted that with today's teenagers less enamored by brand names posted significantly on their clothing, it leaves Gap and similar brands less appealing on their target market, and that's a big problem. Innovation seems to be the saving grace of brands these days.

Gap's sales have been dismal, but the company does not expect the closures and moves to affect its other brands, which were reported to have had better performance than Gap in the last year. The company's Global President, Jeff Kirwan even noted that the company will apply what it learned from their Old Navy brand to Gap, as it has been doing well in sales the past few quarters.

While closing stores may help the company's sinking ship for now, what it needs, as noted by Forbes, is to find its identity and its voice as a brand.

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