Gap Inc. announced Wednesday it would close 200 underperforming Banana Republic and Gap stores in the next three years as the retailer seeks to expand its online business and focus on its value and active wear brands.
The company is seeing significant growth from its Old Navy and Athleta divisions and plans to open 270 of those stores.
“We’re now shifting our focus to growth,” President and CEO Art Peck said in a press release. “We will leverage our iconic brands and significant scale to deliver growth by shifting to where our customers are shopping – online, value and active.”
Gap expects Old Navy sales to top $10 billion and Athleta to exceed $1 billion in the next few years.
Like many retailers, the company says it is seeing a large portion of its business shift online. Gap reports profitable online and mobile business with double-digit sales growth.
“Over the past two years, we’ve made significant progress evolving how we operate – starting with getting great product into the hands of our customers, more consistently and faster than ever before,” Peck said.
Gap is the latest retailer to announce store closures. Department store chains Sears, J.C. Penney and Macy’s all recently announced dozens of store closures.
Earlier this year, specialty-clothing chain The Limited announced it would close all 250 of its locations.
Gap’s closures and other efficiencies are expected to generate about $500 million in cost savings in the next three years. The company says the savings will allow it to focus on growth initiatives for its top-performing lines.