Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Business News

One brand is learning to break a few store eggs to make a profit omlette

(BUSINESS NEWS) Banana Republic, Gap, Old Navy and Athleta all fall under the same umbrella, but two of those stores are not like the others.

old navy

Mind the gap

It’s no surprise that more retailers are shutting their doors as sales continue to fall.

This week, Gap announced the closure of 200 Banana Republic and Gap stores over the next three years.

The Same Old Retail Tale

This is nothing new to the retail community. As the online market continues to expand, consumers are favoring convenience over visiting physical retailers. Numerous stores have already closed, even major retailers like Macy’s, JCPenney and Sears.

Other shops have completely gone out of business.

You may remember saying goodbye to Bebe and Wet Seal this year. What may have started as a trend has quickly become the new norm. Now retailers like Gap are looking at the future of their companies with a wary eye, and making the necessary changes before it is too late.

Out with the Old, In with the Old Navy?

In an effort to turn their sales around and drive customers back into their most popular stores, Gap decided to shut down certain brands while opening more successful ones. In the next few years, 200 Banana Republic and Gap stores will close while 270 Old Navy and Athleta stores will open.

Advertisement. Scroll to continue reading.

Overall, it is a gain of 70 stores, which Gap estimates will save them $500 million in expenses.

The company calls it their “long-term balanced growth strategy.” Art Peck, the CEO of Gap hopes that by “leveraging their iconic brands,” they will see significant growth moving forward.

For them, it is a way to drive customers into their stores and shift their focus to where they are shopping, whether it’s online or in person.

Numbers game

While the implementation of this plan requires closing a vast number of stores, none of which have been made public yet, it will also provide jobs in the new stores. Banana Republic and Gap stores have both reported a decrease in sales.

Last month, Gap reported a loss of 1% while Banana Republic sales decreased by 5% overall. At the other side of the spectrum, Old Navy is expected to generate over $10 million and Athleta, $1 billion in the next few years. It’s an investment that Gap needs to make, and a fortunate option they have, for the brand to sustain in the world of online shopping.


Advertisement. Scroll to continue reading.
Written By

Natalie is a Staff Writer at The American Genius and co-founded an Austin creative magazine called Almost Real Things. When she is not writing, she spends her time making art, teaching painting classes and confusing people. In addition to pursuing a writing career, Natalie plans on getting her MFA to become a Professor of Fine Art.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.



Business News

The Federal Trade Commission is looking into reviving an old law about pricing, and it sounds like their first target might be the Pepsi...

Business News

Retail sales rose in October and fell in November - possibly December too. What made the Great Pumpkin pop?

Tech News

(TECHNOLOGY) The Metaverse has been the talk of the town for quite some time now, but how it will affect retail as we know...

Business News

(NEWS) Toys R Us is opening their newest store complete with a 2-story slide and ice cream parlor, as well as an exclusive partnership...

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.