The Gap Inc. (NYSE:GPS) plans to shut 230 stores and split off its Old Navy brand, as the fashion firm starts a restructuring aimed at "revitalising" the company.
The company said the closures would mainly be in North America, adding it had already closed 55 of its stores, leaving 742 Gap outlets globally.
The news accompanied the groupâs fourth-quarter update which revealed that like-for-like sales at Gap fell by 5% for both the quarter and the full-year, while Old Navy's revenue was flat for the quarter but for the 12 month period rose by 3%.
Gap saw overall operating profit fall to $372mln in the fourth quarter, down from $396mln a year earlier, on sales marginally lower at $4.6bn.
The company said Old Navy will be spun-off as a standalone company while a new business, which is yet to be named, will encompass The Gap stores as well as its other brands including Banana Republic.
Gap said the store closures will occur over the next two years but did not detail where or how many jobs will be lost.