New York: Retail group Gap said it would shutter 75 stores this year amid sagging sales, including 53 of its kids-focused Old Navy brand outlets in Japan.
Announcing a fall in first-quarter earnings, the San Francisco-based retailer also warned that it might not achieve previous earnings forecasts for this year given the headwinds buffeting the apparel industry.
Net income came in at $127 million, down 47 per cent from a year ago, for 32 cents per share, in line with what the company forecast in a revision early this month.
Gap global net sales at $3.44 billion were down 6.0pc in the first quarter, ended April 30, from a year ago. Sales were off in every region except Asia, where they registered a slight gain. Sales in the US, 77pc of the total, were also down 6.0pc.
“Old Navy will strategically shift its focus to markets most favorable to the brand’s growth,” the company said.
It pointed to the US and Mexican markets as well as China as its focus for Old navy, its lowest-priced brand. But it said that Japan “remains an important market” with the continued presence of more than 200 Gap and Banana Republic stores.
The closings, aimed at cutting overall costs, will also include Banana Republic outlets, most of them in international markets, though the locations were not detailed.
Like many of its competitors, the company has been hit by shifting tastes and slower consumer spending worldwide, as well as competition from online fashion retailers.
“As the pace of change across the apparel industry increases, now is the time to accelerate our transformation by scaling our product and operating capabilities across our global portfolio,” said chief executive Art Peck.
“By taking every opportunity to exploit our strategic advantages, our brands will be able to more fully harness the power of the enterprise to better
serve their customers across channels and geographies.”
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