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Gap trims store count to focus on healthier stores

Gap is closing hundreds of its stores. These are stores that don’t fit Gap’s expectations, whether in terms of profitability, customer experience or traffic trends. Instead focusing on higher-performing shops, Gap hopes to save some $100 million and strengthen healthier stores.

Gap offers apparel, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, Athleta, and Intermix brands. Its products include denim, tees, button-downs, khakis, and other products; and fitness and lifestyle products for use in yoga, training, sports, travel and everyday activities.

The operating model improvement process at the company’s namesake brand has been fraught with inventory problems. As a result, the company was saddled with excess inventory coming into the first quarter, which consequently impacted the company’s sales from this brand as well as its ability to optimize its margins, since it forced the brand to be more promotional.

The company has one platform for all of brands ensuring customers can purchase items for any of them in one place. This has also ensured its new brands get the recognition that would not have been possible if they had had a separate web presence. An upshot of this is that the company was able to deliver strong growth from its online and mobile channels in the second quarter.

 

 
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