Gap to close 75 Old Navy and Banana Republic stores globally
Clothing retailer Gap yesterday said it plans to close all its Old Navy stores in Japan and some Banana Republics mostly outside of North America by the end of its business year due to a continuing sales slump.
Gap added that it could not reaffirm its earnings outlook for the year after having projected in February adjusted earnings of $2.20 to $2.25 a share.
Yesterday, it said the current consensus estimate by analysts of $1.92 was “within a reasonable target of potential outcomes". But Gap also said that to get to that estimate, “trends in the apparel retail environment would need to improve from the first quarter".
Gap announced it would close about 75 stores, mainly outside the US, and said it would book about $300m (£205m) in restructuring charges before taxes. Meanwhile, it estimated the moves would save about $275 million a year and improve its operating margin by nearly two percentage points.
Over all for the first quarter, Gap reported a profit of $127m, or 32 cents a share, down from $239m, or 56 cents a share, a year earlier.
Net sales were down 6 percent at $3.44 billion, the company had reported last week.
Gap shares closed up 1.17 per cent at $17.29.