Gap (NYSE:GPS) announced it will close one-quarter, or 175, of all its namesake stores over the next few years. The company will start with the shuttering of 140 stores in 2015, potentially affecting thousands of jobs. In addition, Gap will cut 250 jobs at its headquarters.
The company has struggled with a sales slump of the Gap brand in recent years, Reuters reported. Instead, shoppers have turned to fast fashion chains such as H&M, Zara and Forever 21. As of Jan. 31, Gap had about 141,000 full-time and part-time employees in 3,700 stores worldwide.
"Customers are rapidly changing how they shop today, and these moves will help get Gap back to where we know it deserves to be in the eyes of consumers," said Gap's CEO Art Peck. Returning Gap to growth has been a priority for Peck since he took the helm four months ago.
The company expects to incur costs between $140 million and $160 million due to the closures, primarily in the current quarter. The company did not mention closings of any of its other brands—Banana Republic, Old Navy, Intermix and Athleta, or its outlet stores.
After the closures, Gap will have 500 brand stores left in North America and 300 outlet stores. The company also said it would close some stores in Europe, but did not say how many.
However, in Asia, Gap seems to still be expanding. The company recently announced the opening of its first store in India, with plans to open 40 in total. And in China, the retailer recently announced a partnership with a Beijing-based e-commerce site to sell apparel.
"Our customers and employees want Gap to win," said Jeff Kirwan, global president for Gap. "We're focused on offering consistent, on-brand product collections and enhancing the customer experience across all of our channels, including a smaller, more vibrant fleet of stores."
Kirwan joined Gap in December of 2014 and has rebuilt the leadership team since then, implementing changes to strengthen the brand and help it compete successfully on a global scale.
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