Once popular retailer, the Gap is closing 175 of its shops in the US, as part of an aggressive rebranding campaign.
Everybody loved the Gap all throughout the 80’s and the 90’s, as they were basically the main providers of the endless collection of plain T-shirts, plaid shirts and blue jeans that everybody use to wear. This was everybody’s wardrobe back then, as people had a more carefree style, at least that was the desired appearance.
However, this is not exactly appealing to the millennials, who want to wear the flashiest eye-popping colors and be up to date with the latest fashion trends regarding patterns. Plain clothing is quite a rare sight nowadays and a carefree sense of style involves a lot more work than it ever has, since there is no honesty in fashion.
It seems that the times have finally caught up with the Gap and therefore, a rebranding campaign has become indispensable. The implementation of this campaign however has been conducted with significant urgency, as the Gap has just announced that it is going to close as many as 175 of its stores in North America by the end of the fiscal year.
This means that there are going to be about 800 Gap stores left, 300 of them being outlet stores and approximately 500 specialty stores. Therefore, Gap’s presence will not be completely removed, but only downsized for the time being. This drastic course of action is expected to cause about 250 jobs at the Gap Headquarters to be dissolved along with the process.
For the moment, the retail company has not made any announcement regarding its European stores, but quite a few of these are bound to be closed in the near future.
“Customers are rapidly changing how they shop today, and these moves will help get Gap back to where we know it deserves to be in the eyes of consumers.” said Gap’s CEO, Art Peck.
It will take the company quite some time to recover financially, if the aggressive campaign does not include more modern clothing lines in Gap’s future collections, because the costs that will come up along with the closing of their stores are going to be gigantic.
It will take $140-160million just to close down the stores, while the company will lose $300million each years in sales, due to the decreased number of shops. The effect of the drastic measure will be felt at the end of 2016, when the company should register around $25million in annual savings.
It is going to cost a lot quite an impressive amount to get Gap up and running again, as it is also going to need a very strong advertisement campaign in order to become relevant to millennials again.
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