Two Gap stores in hometown San Francisco — the brand's Market Street flagship housed in the city's historic Flood Building and another down the street in the Embarcadero Center complex — will permanently close.
"We are confident these closures will strengthen the health of our company moving forward," a company spokesperson said in part in an emailed statement. "And, as with any store closure, we are encouraging employees to find opportunities at other locations within our family of brands."
"As part of Gap Inc.'s strategy to adapt to the changing needs of the customer and growth of our online business, we are looking thoughtfully at our real estate to support the best path forward," the company also said. "As a result, we are closing a number of stores across the Gap Inc. fleet. We are committed to quickly and decisively addressing stores that are underperforming and reviewing lease agreements that don't fit our vision for the future of Gap Inc."
Gap Inc.'s new leadership team doesn't seem to harbor much nostalgia for the Gap brand, joining U.S. consumers who have steadily abandoned the former icon of casual style for a while now.
Executives in June described a firm commitment to reducing Gap's store count in favor of boosting its online growth and said failed negotiations with landlords on rent would mean permanent closures. That tough approach extends to the brand's flagship, which sits near Union Square in the city's major shopping district.
The move comes as Gap and sibling Old Navy stores are showing some stabilization as stores reopen after shuttering temporarily due to the COVID-19 pandemic. As of early August, customer visits were down more than 34% year-over-year at both Gap and Old Navy stores, but "the data indicates that the numbers are plateauing," according to foot traffic analytics firm Placer.ai. That news is especially encouraging in light of last year's particularly strong back-to-school sales, which set up tough comparisons with the season this year challenged by the ongoing pandemic.
"While COVID cratered expectations for retailers across the spectrum during Q2, there's good reason to suspect that retailers like Gap and Ross will see a drastic improvement in foot traffic and sales during Q3," the firm noted in emailed comments.
Still, several analysts have warned that Gap's lack of direction will continue to endanger its prospects, leaving the company's discount Old Navy brand and faster-growing Athleta activewear banner to take up the slack. The brand recently made waves with its announcement of a collaboration with Kanye West's Yeezy brand.