Gap Exiting Malls, to Shutter 350 Stores by 2024
Gap Inc., which was for decades a fixture at shopping malls around the country, said Thursday that it will be closing 220 of its namesake Gap stores — or one-third of its store base — by early 2024. That will result in 80 percent of its remaining Gap stores being in off-mall locations. As part of its restructuring, Gap Inc. said it also plans to close 130 of its Banana Republic stores in North America in three years. The retail organization detailed a three-year plan that calls for closing what amounts to 30 percent of the company’s Gap and Banana Republic stores in North America and focusing on outlets and its e-commerce business.
Total Retail's Take: A mall-based specialty apparel retailer such as Gap Inc. announcing store closures hardly qualifies as news these days, unfortunately so. What the interesting angle here is what's to become of the shopping mall in the future. Mall owners are working feverishly to find new uses for their properties, with vacant storefronts, such as in the case of Gap Inc., becoming all too commonplace. For example, Simon Property Group, the biggest U.S. mall owner, has been in talks with Amazon.com to turn shuttered Sears and J.C. Penney stores into warehouses for the online retail giant. We've also seen mall owners such as Simon and Brookfield Property Partners look to throw a lifeline to struggling tenants by acquiring them, such as the case with J.C. Penney, as a means to keep storefronts open. In 2016, Simon joined with brand manager Authentic Brands Group to create SPARC (Simon Properties Authentic Retail Concepts) to buy bankrupt retailers. That year it purchased Aeropostale, and SPARC has embarked on a buying binge since, having purchased retailers Brooks Brothers, Lucky Brands, and, most recently, J.C. Penney. SPARC, in partnership with competing mall owner Brookfield Property Group, also bought women’s clothing chain Forever 21. Much like the future outlook for brick-and-mortar retail brands, shopping malls will need to be innovative in identifying a profitable path forward.
Joe Keenan is the executive editor of Total Retail. Joe has more than 10 years experience covering the retail industry, and enjoys profiling innovative companies and people in the space.