Chic sweaters and Christmas gift certificates are going to get a little harder to find. Gap has just announced that it will be closing nearly 200 stores over the next two years in North America.
The Wall Street Journal reports that there are currently 889 Gap stores in North America, excluding outlet stores, and the clothing company plans to reduce that number to 700 by the end of 2013. Gap, which is currently the largest U.S. clothing chain, is also planning to triple the number of Gap stores in China. Gaps plans to open thirty new stores in China by the end of the year.
Glenn Murphy, Gap’s CEO, said in a statement:
“The combination of our global strategy and formidable growth platform puts us in a strong position to expand our reach into the top 10 apparel markets worldwide. In North America, we’re taking a number of steps to improve sales in the near-term, and I’m confident that with a strong management team in place, we’re well positioned for sustained growth across the business.”
Gap has been struggling recently with domestic sales. Gap’s domestic profits dropped 19% in the second quarter this year. One reason for the loss of business, according to the WSJ, is that Gap is a middle of the line clothing store. Consumers today are shopping for either cheap clothes, or luxury items.
Gap has been reducing its footprint in the United States for years. In 2007 the company announced that it wanted to reduce it’s overall square footage in the United States by 10%. In 2007 there were 1056 Gap stores in North America. By the end of 2013 there will be just 700.
ABC notes that Gap’s shares rose 11 cents, to $17.96 per share.
Do you think Gap is making a smart move by reducing the number of stores in the United States while building stores overseas?