Gap Closing 20% of Shops in the US
As a blogger of a certain age, the idea that the mall-staple store the Gap- or just “Gap”- would draw down its operations in the United States to such a degree is surprising and kind of makes one feel out of touch with the youth of today.
Before Target was widespread, cutting into Gap’s casualwear profits, the khakis and jeans slinging shop was a 90s institution. In my school, pants were often worn by preppy types deliberately rolled down to reveal a Gap logo, while Gap bags were saved to tote things around prominently. Internet shopping in general is likely another reason the iconic retailer is deciding to shrink US operations- but expand in China- and the Wall Street Journal starkly describes how the ever-present recession has “exposed an oversaturated market, with far more stores than shoppers to fill them.”
Analyst Edward Yruma (clearly economical with vowels) had this to say to the WSJ about the overall retail climate in the US:
“Retailers were overstored before we headed into the downturn. Given the way consumers are spending, coupled with the fact more are going online, we just need fewer stores.”
While the commentary doesn’t directly address the issues Gap faces, the mega-retailer (parent of casual Old Navy and slightly more upscale Banana Republic) has had a rough few quarters. The first two of 2011 revealed losses of 21% for Gap, and CEO Glenn Murphy said that while the shrinking store count isn’t a “condemnation of our home country,” the company is “making a prediction that it’s slow growth here” and isn’t “happy” with the first two quarters of sales in US markets.
