Gap closing over 225 stores globally as sales continue to drop
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Struggling US apparel retailer Gap Inc has revealed plans to shutter more than 225 stores globally this year with another batch to follow next year.
The company has reported a second-quarter net loss of $62 million on sales down 18 percent. Sales through physical stores were down by 48 percent, offset by a meteoric 95-per-cent rise on online sales. The company gained more than 3.5 million new customers during the period.
The company did not give any indication of where in the world its stores would close, or which banners are most affected by the plan, although its namesake Gap network and Banana Republic stores seem to be performing the worst. As at August 1, Gap Inc had 1643 stores trading under those two brands.
The decline in sales in physical stores during the quarter was caused by enforced temporary closures due to the Covid-19 pandemic, with shops beginning to reopen from May. As of August 1, about 90 percent of its stores globally were trading again.
Worldwide sales by the Gap brand were down 28 percent and at Banana Republic by 52 percent. Old Navy performed better, down by 5 percent overall, and aided by a 136-per-cent increase online.
Athleta was the standout, boosted by consumers purchasing more relaxing apparel as they moved to work from home. Sales were up 6 percent overall, and online by 74 percent.
Questions & Answers
Q.Which specific brands within Gap Inc. Are most affected by the planned store closures?
Which specific brands within Gap Inc. Are most affected by the planned store closures?
The company did not specify which banners are most affected by the store closure plan. However, the namesake Gap network and Banana Republic stores appear to be performing the worst according to the sales data provided.
Q.How many stores is Gap Inc. Planning to close in total?
How many stores is Gap Inc. Planning to close in total?
Gap Inc. Plans to close over 225 stores globally this year. Another batch of closures is expected to follow next year, but the specific number for next year has not been disclosed in the article.
Q.What caused the significant drop in physical store sales during the second quarter?
What caused the significant drop in physical store sales during the second quarter?
The decline in sales for physical stores was caused by enforced temporary closures due to the Covid-19 pandemic. Shops began to reopen from May, with about 90 percent of stores trading again by August 1.
Q.Which of Gap Inc.'s brands performed best during this period?
Which of Gap Inc.'s brands performed best during this period?
Athleta was the standout brand, with overall sales up by 6 percent. This was boosted by a 74 percent increase in online sales, as consumers purchased more relaxing apparel for working from home.