Photo: Getty Images/tupungato
Gap Inc. is getting out of Dodge and just about any other place where it has a store located in a mall.
The parent company of its namesake brand, Athleta, Banana Republic and Old Navy announced on its investor meeting webcast yesterday that it plans to close 30 percent of its Gap and Banana Republic stores in North American by 2024, leaving 80 percent of those chains’ locations in non-mall properties.
Like many other clothing retailers, Gap Inc. has used these past months in which the industry has reeled from the novel coronavirus pandemic to take stock of its strengths and weaknesses. Management has developed a new strategic plan largely focused on outlet locations and online sales.
Mark Breitbard, CEO of the Gap business, said the chain had become “overly reliant on low-productivity, high-rent stores" and has focused in recent months on addressing its “real estate issues” and accelerating its transition “to a true omni-model."
Two bright spots for Gap Inc. have been its Athleta and Old Navy banners and the retailer has plans to grow store counts for both.
The Athleta business has tapped into the growing market for women’s active athletic apparel, which has outpaced the total women’s clothing category by 14 points. The brand said its core four strengths — health and wellness, female empowerment, sustainability (70 percent of items made from sustainable materials) and inclusivity (clothes designed for all ages and sizes) —position it to double its current sales to reach $2 billion by 2024. Athleta is looking to double its store count from 200 to 300 by 2024, and will continue to simultaneously focus online. The banner has added more than two million customers online in the past six months as its digital sales have grown 95 percent year-over-year during that time.
Old Navy, which has helped buoy its parent company’s results for years, plans to add 30 to 40 new stores over the next three years to add to its current total of roughly 1,200. During that time, the chain expects to grow its annual sales from its current $8 billion to around $10 billion.