Gap Inc. announced Wednesday that it will close approximately 200 underperforming Gap and Banana Republic stores in the next three years.
The company, instead, plans to zero in on its growing brands like Old Navy and Athleta.
“Over the past two years, we’ve made significant progress evolving how we operate," said Art Peck, president and chief executive officer, Gap Inc. "We’re now shifting our focus to growth. We will leverage our iconic brands and significant scale to deliver growth by shifting to where our customers are shopping – online, value and active.”
So as the company closes hundreds of Gap and Banana Republic stores, it will also be opening roughly 270 new Old Navy and Athleta stores.
The San Francisco-based company said Old Navy is expected to exceed $10 billion in net sales in the next few years. And Athleta, which sells athletic clothing, is expected to exceed $1 billion in sales.
"The company expects about $500 million in expense savings over the next three years by better leveraging its size and scale," Gap Inc. said in a statement.
Gap Inc. is facing the same problems as other fashion retailers as shoppers have stopped buying as much clothing and have moved toward online shopping. The result has been sluggish traffic at stores, which the company has been trying to counteract with frequent discounts. Although recently, the company has been trying to pull back on price cutting.
The Associated Press contributed to this report.