Econostrum | Economic News in the Mediterranean



Gap plans to close all its shops in Europe

The Gap brand could disappear from Europe (photo: DR)
The Gap brand could disappear from Europe (photo: DR)
EUROPE. The Gap Group (Gap, Banana Republic, Old Navy, Athleta, Intermix, Hill Citu and Janie and Jack brands) announced in a press release on Tuesday October 2020 that it was "starting a strategic review of options" for its business in Europe. "One of the options being considered is the possible closure of the Gap shops operated by our company in the UK, France, Ireland and Italy by the end of the second quarter 2021," said Mark Breitbard, Gap Brand International Director. This would affect 152 outlets based on the figures provided in the 2019 activity report.
The Covid-19 crisis is only accelerating a strategy of lowering curtains on the Old Continent that began in 2015.

At the same time, the ready-to-wear brand will review its warehouse and distribution model as well as its e-commerce activities for Gap and Banana Republic in Europe. "The closure of our European distribution centre in Rugby could have consequences," the statement said.

The group is also working on another option, that of "transferring part of its activities to third parties through a proposal to expand the partnership model", thus favouring franchises. Already this system involves more than 400 shops in thirty-five countries and fourteen e-commerce sites.

Created in 1969 in San Francisco in the United States by Donald Fisher, the company achieved a turnover of $16.38 billion (€13.81 billion) in 2019. It had 3,345 directly-operated shops (plus 574 franchises) and 129,000 employees on 1 February 2020.

In Europe (2,500 employees), 2019 sales amounted to $539m (€455m), i.e. 3% of worldwide sales. This represents 3% of worldwide sales, down 1% compared with the 2018 financial year, which was closed at $603 million (€509 million).
France generated sales of €69 million in 2019, with a net loss of €18 million and a workforce of 848 employees. Since August 2019, nine shops have been closed in France. The units still open are mainly located in Paris and its region (11) with a presence also in Montpellier, Aix-en-Provence, Lille, Angers and Lyon.

In Italy, the group has eleven shops.

Frédéric Dubessy

Wednesday, October 21st 2020

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