Struggling US apparel retailer Gap Inc has revealed plans to shutter more than 225 stores globally this year with another batch to follow next year.
The company has reported a second-quarter net loss of $62 million on sales down 18 per cent. Sales through physical stores were down by 48 per cent, offset by a meteoric 95-per-cent rise on online sales. The company gained more than 3.5 million new customers during the period.
The company did not give any indication of where in the world its stores would close, or which banners are most affected by the plan, although its namesake Gap network and Banana Republic stores seem to be performing the worst. As at August 1, Gap Inc had 1643 stores trading under those two brands.
The decline in sales in physical stores during the quarter was caused by enforced temporary closures due to the Covid-19 pandemic, with shops beginning to reopen from May. As of August 1, about 90 per cent of its stores globally were trading again.
Worldwide sales by the Gap brand were down 28 per cent and at Banana Republic by 52 per cent. Old Navy performed better, down by 5 per cent overall, and aided by a 136-per-cent increase online.
Athleta was the standout, boosted by consumers purchasing more relaxing apparel as they moved to working from home. Sales were up 6 per cent overall, and online by 74 per cent.
