(NEW YORK, NY) — Gap has just announced that it will close around 230 stores over the next two years.
CEO Art Peck confirmed that most of the closings will be in the US leaving the company smaller but healthier.
According to an article by the Business Insider, same-store sales were down 5% in the fourth quarter of 2018 and dropped overall for the year.
Over the years, Gap supported major discounting to get rid of inventory, building a reputation that has damaged the brand.
“We know what we need to do to win. And we are committed to restructuring the fleet and revitalizing Gap brand to unlock shareholder value and drive profitable growth,” said Perk.
Not only will the company close nearly half of its locations, but it will split from Old Navy making the two separate publicly traded companies.
“Following a comprehensive review by the Gap Inc. board of directors, it’s clear that Old Navy’s business model and customers have increasingly diverged from our specialty brands over time, and each company now requires a different strategy to thrive moving forward,” said Gap’s Board Chairman, Robert Fisher.
The news comes after a tough run for Gap. Late last year, the company decided to close two Manhattan stores located at 680 Fifth Avenue and 60 West 34th Street.