Embattled apparel chain Gap is to close 175 stores in the US as it adjusts to a slump in sales.

Gap US currently has 675 stores nationwide and a further 300 outlet stores.

CEO Art Peck says the company will cull the mainstream store network back to 500 and retain the 300 outlet stores. An unspecified number of European stores will also close.

It will also cut 250 jobs at its San Francisco headquarters.

“Returning Gap brand to growth has been the top priority since my appointment four months ago – and Jeff (Kirwan) and his team bring a sense of urgency to this work,” said Peck in a statement.

“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.”

“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.”

Gap says the closures will cut the brand’s sales by about US$300 million a year. One-off costs associated with the restructure will range between $140 and $160 million, up to $75 million of that in non-cash components. These costs include lease buyouts, asset impairments primarily related to the Gap fleet, inventory and fabric write-offs, and employee related costs associated with organisational changes.

Gap’s total sales for the year to January 31 were $16.44 billion.