Clothing retail giant Gap will close more than 100 of its Gap stores in North America as it expands overseas and increases online sales, the company said Thursday.
More clothes will be sold online and shipped direct to consumers from store inventory, Gap officials said at the company’s annual investor meeting. Gap will expand its “ship-from-store” pilot program from 25 to 270 stores next year. Those outlets will include Gap, Banana Republic, Old Navy and Athleta stores.
Gap’s overseas sales increased 16 percent in the first half of 2011, and online sales rose 19 percent, with online orders coming from 330 cities in China. Gap online sales are expected to hit $1.5 billion this year and $2 billion by 2014.
By the end of 2013, Gap expects to have 950 stores in North America, including 700 Gap specialty stores and 250 Gap outlet stores, 34 percent fewer than in 2007. The $15 billion retailer currently has 1,091 company-owned Gap stores in the U.S. and Canada and a total of 3,100 company-owned stores in 36 countries.
China is a burgeoning market for the iconic U.S. clothing retailer. By the end of 2012, the retailer will increase the number of Gap stores in China from 15 to 45. The realignment of international and domestic retail networks will impact the retailer’s distribution and manufacturing operations worldwide.
As it expands overseas, the company said is shortening “product pipelines” to create and ship apparel more quickly to Gap, Old Navy and Banana Republic stores. Gap also is saving $20 million a year by using more space efficient containers and redesigning packaging to eliminate tons of cardboard and plastic bands.