Gap Inc. -- parent of the Gap, Old Navy, and Banana Republic retail chains -- announced Thursday it will be closing 189 Gap locations in the United States by the end of 2013 and that it will expand overseas by opening a store in Hong Kong and triple the number of its locations in China to 45 from 15.
This move on the part of Gap is related to its goal of reducing its overall square footage in the U.S. by 10 percent between 2007 and 2013. The company also wants to increase revenue from outside the U.S. by 30 percent.
The combination of our global strategy and formidable growth platform puts us in a strong position to expand our reach into the top 10 apparel markets worldwide, Glenn Murphy, Gap's CEO, said in a statement. In North America, we're taking a number of steps to improve sales in the near-term, and I'm confident that with a strong management team in place, we're well positioned for sustained growth across the business.
Gap sales in the U.S. have dropped because of growing competition from other retailers such as Abercrombie & Fitch and H&M, according to the Huffington Post, which reported that Gap's overall revenue at stores open at least a year fell 2 percent in the second quarter.
Banana Republic also experienced a 2 percent decline.
After the planned round of closings, Gap will have 700 Gap locations at the end of 2013, which compares with 1,056 stores in 2007, according to the Huffington Post.