Gap Q1 sales down 5 percent, will close 75 stores
Old Navy will shift to markets most favorable to the brand’s growth and close 53 stores in Japan.
Gap estimates an annualized sales loss of about $250 million associated with the store closures and expects to recognize restructuring costs in fiscal 2016 of about $300 million pre-tax, about $100 million of which is non-cash, from the store closures and streamlining measures.
Old Navy will strategically shift its focus to markets most favorable to the brand’s growth, resulting in the closure of its fleet of 53 stores in Japan in fiscal 2016.
Old Navy’s near-term growth ambitions will be anchored in North America, including its most recent debut of company-operated stores in Mexico, as well as China and its global franchise operations.
Japan remains an important market for Gap Inc.’s portfolio, with a continued strong presence of more than 200 Gap and Banana Republic stores. Additionally, the company expects to close select dilutive Banana Republic stores, primarily internationally, in fiscal year 2016.
In total, the company expects to close about 75 stores related to these measures.
Gap board authorized a quarterly dividend of $0.23 per share payable on or after July 27, 2016 to shareholders of record at the close of business on July 6, 2016. ■