Gap and Banana Republic are closing another 350 stores as retailers flee malls in the second wave of the retail apocalypse
- 350 Gap and Banana Republic stores are set to close in North America by the end of 2023, parent company Gap Inc. announced on Thursday.
- By the end of 2023, only roughly 870 Banana Republic and Gap stores will remain open in the US and Canada, compared to 1,216 in 2019.
- The closures are part of Gap's plan to move out of malls, as the pandemic sends foot traffic spiraling even lower.
Gap is closing hundreds of stores as it attempts to flee failing malls.
On Thursday, Gap Inc. announced plans to close roughly 350 Gap and Banana Republic stores in North America by the end of 2023. That represents a 30% drop in its total number of locations.
The company previously announced plans to close more than 225 Gap and Banana Republic stores in 2020. In 2019, there were 1,216 Gap and Banana Republic locations in the US and Canada; by the end of 2023, there will only be roughly 870 left.
"As result of this work, our mall-based exposure will decline meaningfully," Gap Inc. chief financial officer Katrina O'Connell said in an investor presentation on Thursday. Gap said that in 2023 roughly 80% of its revenues will come from online sales and locations outside of malls.
Mark Breitbard, the CEO of the Gap brand, said that the shift away from malls represented "huge changes" for the company, where the mall business was once front-and-center.
Stores in malls have struggled to build sales in recent years, as declining foot traffic sparked a wave of store closures.The pandemic introduced a new crisis for retailers, with Gap Inc. temporarily closing all stores in the spring.
More than 7,500 store closures have been announced so far in 2020. Malls have struggled to collect rent from retailers, most of whom closed locations at least temporarily during the pandemic. Lou Conforti, the CEO of Washington Prime Group, recently told Business Insider that the industry need to make some significant changes if malls want to survive.
"This has been a very passive industry," said Conforti. "We were rent collectors versus problem solvers or curators."