Gap Closing All Old Navy Stores in Japan, Plus Select Banana Republic Stores
After reporting dismal sales for its first quarter, Gap Inc. announced it is closing all 53 of its Old Navy stores in Japan and 75 Banana Republic stores in mostly overseas locations as it concentrates on other geographies.
“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 Art Peck, Gap’s Chief Executive Officer.
The San Francisco company will concentrate on its Old Navy presence in the United States and recently opened stores in Mexico and China.
Overall, same-store sales in all its nameplates were down 5 percent in the first quarter ending April 30, 2016, compared to a 4 percent decline for the same period last year.
Net income for the first quarter totaled $127 million, sliding 47 percent from the previous year’s first quarter when it came in at $239 million. Net sales also took a major hit, declining to $3.44 billion for the first quarter compared to $3.65 billion the previous year. Part of that decline was due to a strong dollar that had a negative $20 million effect on the San Francisco’s bottom line.
Retooling the retail formula in 2016 will cost the company $300 million in lease-related expenses, inventory write-offs and the cost to lay off employees
