Gap Inc. bets on Old Navy and Athleta for growth, to close 200 underperforming stores
Consider it a new day for American retailer Gap Inc., as the company prepares to shift gears into growth and shift its brand focus.
The company announced on Wednesday a new growth strategy that will include a focus on both its Old Navy and Athleta brands, while the company will close some 200 underperforming Gap and Banana Republic specialty locations.
Gap Inc. said it expects Old Navy to exceed $10 billion and Athleta to exceed $1 billion in net sales in the next few years. The growth will be propelled by the opening of 270 Old Navy and Athleta stores, as well as growth in online and mobile channels.
“[…] We’re now shifting our focus to growth. We will leverage our iconic brands and significant scale to deliver growth by shifting to where our customers are shopping – online, value and active,” said Art Peck, president and chief executive officer, Gap Inc.
In its last reported quarter, the company reported better-than-expected second-quarter results. Gap Inc.'s comparable sales were up, largely due to Old Navy same-store sales, which was pegged as Gap's biggest revenue contributor. Meanwhile, Gap’s comparable sales fell 1 percent in Q2, while Banana Republic fell for the 10 straight quarter by 5 percent.
The company has equally been striving to improve its product design and the company’s ability to produce it faster.
“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,” explained Peck.
The company equally expects to save about $500 million in expense over the next three years by better leveraging its size and scale, cross-brand synergies and streamlining operations and processes.
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