Gap Inc. announced Wednesday that it will close 200 stores by 2013, reducing the chain’s retail store locations to 700. But the chain will boost its outlet presence by 50 or 60 stores, signaling a change in outlook.
Gap Chairman and CEO Glenn Murphy said at a Piper Jaffray investor conference that the store needed to change its product, stores and marketing because outlets are where customers gravitate, according to the San Francisco Business Times, an affiliated publication.
“I think we’ve lost our edge here a little bit. ... We’ve been tapping at the edges of Gap brand in North America. That’s not good enough,” Murphy said.
Rising costs of yarn and cotton caused the retailer to scale back its earnings predictions for the year and work on cutting out middlemen by working directly with mills rather than vendors.
But that doesn’t mean it’s all bad news for Gap. Murphy said that the brand recently expanded to Canada and Japan and that it plans to open an outlet in Italy. It’s also opening more of its Athleta stores, planning to have 10 storefronts by the end of 2011, and rolling out more products in its Piperlime brand. In addition, Gap will add about 40 Banana Republic Factory stores for a total of about 150.
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