Gap’s first-quarter profit plunges 47%
Struggling retailer Gap Inc. said it will close 75 stores this year as it reported that sales continued to fall in its first quarter.
The San Francisco retailer said it will close all 53 of its Old Navy stores in Japan, part of an effort to save $275 million a year. Some Banana Republic stores, mostly internationally, will also close.
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Gap, which also owns Banana Republic and Athleta, has been fighting to turn around its business as shoppers flock to e-commerce and fast fashion rivals.
In the three months that ended April 30, the clothier said profit was $127 million, or 32 cents a share. That was a nearly 47% drop compared with $239 million, or 56 cents, a year earlier.
Sales fell 6% to $3.4 billion. Sales at stores open at least a year plunged 5%, the sixth straight quarter of declines. Comparable sales at Gap dropped 3% and Banana Republic fell 11%. Old Navy, which has been a bright spot for the company, reported that comparable sales slid 6%.
Gap said it will hone in on growing brands in regions with the greatest opportunities. Old Navy, for example, will focus on areas such as North America and China instead of Japan.
The company said it will also streamline its operating model in order to take advantage of its scale and also respond faster to “the ever-changing environment and needs of customers.”
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