Say it isn’t so.
There’s a long list of stores closing in 2020, and Gap’s joined the ever-growing list of retailers that have closed locations. In February 2019, Gap announced they’d be closing up to 230 stores before February 2021. Now, with lackluster sales and COVID-19 related losses, Gap’s closing more than 350 stores by 2024.
Yeah, they’re in a bit of a free fall. It makes sense why they were on our 2020 store closures watch list.
Why do physical stores keep closing? It’s partly due to the ongoing e-commerce boom (the hardest-hit stores were declining in sales even before COVID-19), but it’s mostly the pandemic that’s kept shoppers like you and me at home.
(Download the KCL app to stay current on all the deep discount store-closing sales going on.)
Here’s what to expect with the closing of Gap stores and their plans for the future:
More than 350 Gap outlet stores will close by 2024.
When Gap, Inc. first announced they were closing 230 stores in the U.S. by 2021, they were also going to split the company in half. That’s no longer the case — Gap will not be splitting the company.
They are, however, permanently closing more than 350 of their underperforming Gap stores at traditional shopping malls, including 130 of their Banana Republic mall outlets by 2024. This means up to 80% of Gap’s remaining stores will be in off-mall locations.
It’s great that they want to focus on e-commerce and slash store prices (for those of us who like ordering on Gap.com), but it’s bad news if you love shopping at the mall.
Keep an eye out for Gap store liquidation sales of up to 90% off.
There aren’t any specific details about Gap liquidation sales — or even all the particular stores on the chopping block — but closures equal liquidation sales.
Generally speaking, most of these sales last 8 – 12 weeks, depending on inventory. While discounts increase over time, like from 50 – 90% off, you won’t want to wait that long, because the best stuff will be gone.
But don’t just run into the store on day one ready to buy out the place. Early ‘discounts’ can be deceiving, so you gotta play this smart.
How does this affect Old Navy, Banana Republic, and Athleta?
Gap, Inc. is the parent company of Old Navy, Banana Republic, and Athleta. And right now, with consistent growth overall, Athleta is the company’s cash cow, so it’s not going anywhere.
Old Navy is Gap’s second strongest brand of late; with shops located away from shopping malls, it’s been performing better than other retailers as they reopen. Old Navy’s safe for now too.
On the other hand, Banana Republic has been at a disadvantage during COVID-19 since they mostly sell clothes for men and women to wear to work. Banana Republic will be adding activewear, sleepwear, and knits to its inventory — or at least until people return to the office.
Only time will tell if all of Gap’s brands will successfully make it through the pandemic.
Here’s what’s in store for the future of Gap, Inc.
As Gap tries to regain its footing amidst COVID-19, they’ve begun to make tweaks here and there to make up for this year’s losses. These are just a few of the changes you can expect to see soon:
- Gap plans to expand its higher-profit brands by 2024. Gap will be adding 100 new Athleta stores and 30 – 40 Old Navy locations in the US.
- In June, Gap announced a deal with Kanye West, who will be designing an exclusive fashion line for their stores — a move that gave a little bump to their stock.
- To improve online sales while stores close, Gap is mixing up their inventory. For example, they began making face masks, which are sold individually or in bulk.
- Gap is turning underperforming stores into Online Fulfillment Centers to improve customer service and support their e-commerce expansion.
Even with these new changes, I gotta be honest — if things get hairy with the company’s overall financial picture, who knows what the future holds for Gap and its brands?