Gap Inc. plans to close stores in the U.S., while expanding in China.
The retailer announced plans on Thursday to shut down 189 locations, or 21 percent of its namesake Gap store in the U.S. by the end of 2013. The largest U.S. clothing chain, which also runs Old Navy and Banana Republic chains, plans to triple the number of Gap stores in China from about 15 by the end of the year to 45 by the end of next year.
The plan is designed to reach the company’s goal of reducing its overall square footage in the U.S. by 10 percent from by the end of 2013, while doubling revenue outside of the U.S. to 30 percent by the end of the same year.
Like many U.S. companies, Gap has been looking overseas for growth as Americans continue to cut back on spending during a down economy in the U.S. Gap sales have decreased considerably due to growing competition from specialty realtors like Abercrombie & Fitch and cheap merchants like H&M.
On Thursday, the company said that it plans to have closed 34 percent of its Gap stores between 2007 and 2013. After the reduction, the company will have 700 remaining stores, down from 1056 in 2007. Overseas, the company said its first Gap store in Hong Kong will be opening in a few weeks as well as the first Banana Republic in Paris later this year. Gap Inc. also plans to expand Old Navy to Japan within the next 18 months.
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