The gap will shut all of its 81 stores in the United Kingdom and Ireland by the end of September and go online, while the brand adjusts to changes in shopping habits after the pandemic.
The American apparel retailer, which possesses Old Navy and the Banana Republic, mentioned in a statement on Thursday that the closures will impact company-operated stores. It also added that plans were also in progress to sell its outlets in France and Italy.
The retreat comes after a strategic review of its European business that started last year “with the goal of finding new, more cost-effective ways” to serve customers in the region, the company mentioned.
Gap (GPS) declared a three-year plan in October to close hundreds of stores in North America, amounting to almost a third of its retail footprint. Like competitors, the company has had to acclimate to the shift to e-commerce accelerated by the coronavirus pandemic, which has challenged brick-and-mortar retailers and leads to the bankruptcy of established brands such as Brooks Brothers.
Growing from jeans and LPs to a retail behemoth
On Thursday, Gap accused “market dynamics” of its decision to close stores in the United Kingdom and Ireland, which it mentioned will take place in a “phased manner” through the end of September. It refused to comment on how many jobs would be affected.
“We are thoughtfully moving through the consultation process with our European team, and we will provide support and transition assistance for our colleagues as we look to wind down stores,” the company mentioned.
It is in consultation with a “potential partner” in Italy and discussing with Hermione People and Brands, the retail branch of property developer FIB Group, to take over Gap stores in France.
Gap opened in London in 1987, setting up its first expansion outside the United States. It has been present in Ireland since 2006.
“Gap was decades ahead in offering the athleisure styles which have become so popular during the pandemic,” mentioned senior investment and markets analyst at Hargreaves Lansdown, Susannah Streeter.
However, the brand has fought to compete with a growing number of rivals in the “casual space,” especially given “languishing footfall” in shopping centres and on main streets where many of its stores are based, she added in a research note on Thursday.
The brand’s physical withdrawal will come as a blow to Britain’s main streets, which are already reeling from the shutting of Debenhams, the country’s biggest department store chain.