The retail giant is experiencing a multitude of problems.
Gap just announced that it is going to close 175 of its retail stores, mostly those that are in shopping malls across the country. The brand is trying to retain its image as it suffers a slump in sales and reputation.
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Of the 675 stores that Gap Inc. currently has, they will close 175, leaving them with only 100. Gap Inc, is owned by the company that owns Banana Republic and Old Navy - both of which are suffering as well. The company has been suffering as they struggle to stay on top of trends and keep prices at reasonable levels, according to The New York Times.
To help right the ship, Gap has shaken up its management ranks: Art Peck became CEO in February and leadership of the Gap and Banana Republic brands was changed. The company also has been working to overhaul its fashions to improve their appeal. And it got rid of its Piperlime line that wasn't floundering. The company is also cutting jobs from the top down, removing officers and positions that they think aren't necessary.
In total, Gap said store closings and job cuts will save it around $25 million a year. The company said it will take about $140 million to $160 million in charges related to the moves.
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The stores that will close, which won't include any of the Gap Factory or Gap Outlet locations that are scatter around the country, have about $300 million in annual sales out of Gap's total of $16 billion. The company also reaffirmed its fiscal 2015 earnings guidance of $2.75 to $2.80 a share, which excludes estimated pretax costs of $140 million to $160 million related to the company’s actions.