Gap Closing Stores: 250 Jobs Eliminated As 175 Outlets Close Their Doors
The Gap is closing stores in an attempt to boost its image. One hundred and seventy-five of its namesake stores will be closing their doors, costing 250 corporate jobs in the process.
Some might argue that a large number of layoffs will only hurt the company’s image due to disgruntled employees suddenly having to look for work again. In the current job climate, it’s already challenging to find work. The jobs lost, as announced, were lost at the top, and the company has not disclosed how many will lose jobs at the retail level.
The company has stated that it will help employees relocate to other jobs, but it is unknown how effective this will be.
After the recent raise in The Gap‘s minimum wage, this news could hit the lower levels especially hard. Even stores overseas will be hit in the downsize.
Gap is closing a quarter of its North American stores in the coming years. Here’s why: http://t.co/zt3Do5xa18 pic.twitter.com/LMtyG9Fixb
— The Atlantic (@TheAtlantic) June 16, 2015
The reason for The Gap closing stores is that the brand has been losing appeal, unable to keep up with the trends, according to ABC News. Once being the go-to store for name brand khakis, the company has been struggling with a slump in sales over the past few years.
It is unknown if its other retailers, Old Navy and Banana Republic, will also eventually be hit in this move to re-establish the brand. The Piperlime brand has already been dropped from The Gap’s selection. After Art Peck’s move to CEO in February, leadership has changed for Gap and Banana Republic.
Peck expressed his concern with The Gap closing these stores.
“[We] feel confident that we’re going to be positioned to restore the brand and get it back on track as quickly as possible. We never want to close stores, but we felt this was the right decision.
We know where we have issues in the assortment. And we know that those issues have to do with a lack of femininity, particular silhouettes that we have that she doesn’t find flattering. And there’s a lack of optimism in the brand, which shows up as a very tight and muted color palette, and a lack of print and pattern.
We’ve been moving quickly and decisively. We need to take decisions, look at the situation, then get things done and behind us.”
The move resulting in The Gap closing stores across the United States and Europe is expected to save the company millions of dollars a year, though the transition will cost more to complete by January of 2016.
Do you think The Gap will recoup its costs and come back as a prominent fashion brand?
[Image via Joe Raedle / Getty Images]
