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On Thursday, a Gap store in London.
Getty Images/AFP/Daniel Leal-Olivas
Following reports that the apparel retailer is liquidating locations internationally as part of a continued strategy shift for its bricks-and-mortar footprint, Gap stock rose somewhat on Thursday. By the end of September, Gap (ticker: GPS) plans to close all 81 of its stores in the United Kingdom and Ireland. Following a strategic evaluation of its European business, the company is considering selling its stores in France and Italy.
The closures are a significant change for Gap, which began its international expansion in the United Kingdom more than three decades ago. Last year, the corporation revealed plans to downsize its physical presence in its primary North American market by more than half. While mall-based shops have been suffering with falling visitation for years, the Covid-19 outbreak threw Gap and others into a tailspin. Gap fought commercial landlords over rent during mandatory closures, and sales were low at the start of the crisis, but the retailer was able to pivot successfully. It announced a high-profile partnership with musician Kanye West, which analysts believe will pay off in the long run, and has recouped revenue through online sales. While the pandemic is no longer affecting store operations in the United States, and demand for office clothing may increase as more people return to work, Gap and other retailers believe that e-commerce and having a variety of ways to buy their goods—so-called omnichannel capabilities—will continue to grow in importance. This would eliminate the need for a huge network of physical locations. In afternoon trading, Gap was 0.6 percent higher at $33.83, while the
S&P 500 Index
had increased by 0.5 percent. The stock has risen about 68 percent since the beginning of the year, and is up about 175 percent in the last year. Teresa Rivas may be reached at teresa.rivas@barrons.com./n
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