Gap To Close Its High-End Chain After 18 Months
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Gap Inc., the biggest clothing retailer in America, plans to close its 18-month-old Forth & Towne chain to focus on its struggling namesake and Old Navy shops.
The 19 Forth & Towne stores, which target women 35 and older, will be shut by end-June, the company said yesterday in a statement. The chain employs 550 in cities including San Francisco and Atlanta, and the closures will cost the company $40 million in the first and second quarters before taxes.
The closure is Gap’s first strategy change since January’s departure of the chief executive officer, Paul Pressler, following five quarters profit declines. The interim CEO, Robert Fisher, will disclose this week how the company plans to revive Gap and Old Navy, which represented 85% of last year’s sales.
“At this point, the company needs to focus on Gap and Old Navy,” an analyst at CL King & Associates in New York, Mark Montagna, said. Forth & Towne “wasn’t going to be a meaningful contributor to earnings for years.” He has an “underperform” rating on the stock.
