Gap Inc. will close roughly 200 poorly performing Gap and Banana Republic stores in the next three years, the clothing company announced Wednesday.
The move is part of the retailer’s plan to zero in on its brands that are showing the most promise, while paring back those that are struggling in order to boost growth.
“Over the past two years, we’ve made significant progress evolving how we operate,’’ Gap Inc.’s CEO and president, Art Peck, said in a statement. “With much of this foundation in place, we’re now shifting our focus to growth.’’
While it sheds dozens of Gap and Banana Republic locations, the company will open roughly 270 new Old Navy and Athleta stores. Gap Inc. forecasts that Old Navy sales will surpass $10 billion, and Athleta will top $1 billion in the next few years.
In the wake of the news, shares jumped 6.41% to $25.57 in mid-day trading.
Gap Inc., like other traditional chains, is also bolstering its online presence. Ultimately, the company says that steps to make the company more nimble should help it to cut roughly $500 million in costs in the next three years.