Shares of Gap Inc. (NYSE:GPS) rose 1 percent in extended-hours trading Monday after the apparel retailer announced plans to close about 175 U.S. stores over the next few years, with around 140 store closures occurring this year. The company, which operates Gap, Old Navy, Banana Republic and Athleta brands, also will cut around 250 jobs at its headquarters in San Francisco and in New York and other locations nationwide this year in an effort to streamline its store fleet and headquarters workforce.

The retailer is looking to rebuild and strengthen its brand as it faces increasing competition from rival chains like Zara, H&M and Forever 21.

Jeff Kirwan, who was appointed as global president for Gap in December, has implemented an aggressive agenda designed to strengthen the brand and successfully compete on the global stage in support of the brand’s new product operating model, the company said.

“We’re focused on offering consistent, on-brand product collections and enhancing the customer experience across all of our channels, including a smaller, more vibrant fleet of stores," Kirwan said in a statement Monday. 

The brand will close a limited number of European stores during this period. The changes will not impact Gap Outlet and Gap Factory Stores.

Following the closings, the retailer will operate 800 Gap stores in North America, comprising 500 Gap specialty locations and 300 Gap outlet stores. The brand will continue to have a robust global presence in more than 50 countries with about 1,600 company-operated and franchise locations.

The company estimates an annualized sales loss of approximately $300 million associated with the store closures. 

Gap’s sales and earnings for the February-to-April quarter were affected by the stronger U.S. dollar and delayed shipments due to a shipping slowdown at West Coast ports.

For the quarter ended May 2, Gap reported its first-quarter net income fell 8 percent to $239 million, or 56 cents per share, on revenue of $3.66 billion, compared with a profit of $260 million, or 58 cents per share, on sales of $3.7 billion during the same period a year earlier.

Despite the challenges, Gap said Monday it maintains its full-year earnings projections on Monday between $2.75 and $2.80 a share.

Shares of Gap have lost 7 percent of their value in the last 12 months, closing at $38.20 in the regular trading session Monday.