SAN FRANCISCO _ More Old Navy, less Gap.
That was the message that Gap Inc. had for its investors Wednesday, when the company announced it will close about 200 underperforming Gap and Banana Republic locations while opening 270 stores under the popular discount Old Navy brand and Athleta, its athletic apparel store.
The closures mark the latest decline in Gap's once-ubiquitous namesake brand. Last year, the company said it would close 175 stores after it went almost two years without sales growth. The year before, it closed more than 100 stores.
But it is placing hope in Old Navy and Athleta.
The company said in its message to investors Wednesday that it expects Old Navy to exceed $10 billion and Athleta to exceed $1 billion in net sales in the next few years. Those forecasts could be ambitious _ Old Navy hit about $6 billion in the 2016 fiscal year.
"Over the past two years, we've made significant progress evolving how we operate, starting with getting great product into the hands of our customers, more consistently and faster than ever before," said Art Peck, president and CEO of Gap Inc., in a message on its website to investors. "With much of this foundation in place, we're now shifting our focus to growth. We will leverage our iconic brands and significant scale to deliver growth by shifting to where our customers are shopping _ online, value and active."
By shifting to growing the Old Navy and Athleta stores and closing the underperforming Gap and Banana Republic stores, and by "streamlining operations and processes," the company said it expects to save about $500 million in expenses over the next three years. It said it also plans to invest more in its mobile and online services.
