Gap Announces Closure Of 175 North American Stores
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There was a time when the Gap ruled - jeans, plaid shirts, khakis. Well, that time has apparently passed. Gap just announced a new round of store closures and is trying to figure out how to be cool again. Here's NPR's Yuki Noguchi.
YUKI NOGUCHI, BYLINE: For decades, Gap was fashion's icon for reliably not-too-trendy, comfortable clothes. But its sales are sagging, and its earlier success isn't translating to today's consumer.
JASON MOSER: Fashion changes with the times. I mean, nobody's immune.
NOGUCHI: Jason Moser is an analyst with The Motley Fool. He says Gap is losing customers to rivals offering better value. One of its other brands - Old Navy, for example - is doing well marketing to a lower-end market. But he says the other brands in the midmarket - Banana Republic and Gap - have lost their way.
MOSER: It sounds like perhaps that they almost sort of let this millennial generation sort of pass them right by.
NOGUCHI: And Gap isn't alone. Last week, J.Crew announced it would lay off workers amid poor sales. On Monday, Gap executives announced they'll be closing 175 stores across North America, the bulk of them by the end of the year. It's not clear yet how many jobs will be eliminated. Closing stores will cost Gap sales, at least in the short-term, as Gap CEO Art Peck acknowledged at an investors meeting today.
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ART PECK: I hate the idea of conceding market share. We will do everything we can do to claw back every dollar that we can. But let's be realistic - some of that - some of those dollars and some of that wallet is going to go to the competition.
NOGUCHI: Peck says part of the advantage of divesting some stores is that it will free up resources to invest in new initiatives, including mobile. Yuki Noguchi, NPR News, Washington. Transcript provided by NPR, Copyright NPR.