Gap considers closing all its UK stores

October 23rd, 2020 Royaltygist News 0 comments 1

Published: duration17 minutes ago

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US retailer Gap could close all of its own UK stores, putting thousands of jobs at risk, as it mulls shifting its operations to franchise-only in Europe.

It may close all of its shops in the UK, France, Ireland and Italy next summer, the retailer said.

Gap could also close its European distribution centre in Rugby.

The retailer, whose sales have been falling in recent years, reported a £740m loss in the three months to May due to coronavirus disruption.

Instead of operating its own stores, Gap said it was looking at whether to move to a franchise model.

The retailer had 129 Gap branded stores in Europe at the end of July.

"As we conduct the review, we will look at transferring elements of the business to interested third parties as part of a proposed partnership model expansion," said Mark Breitbard, head of Gap brand global.

Clothing retailers have been hit hard by the coronavirus crisis. As well as temporary shop closures during lockdown, they have had to contend with lower footfall and an accelerated shift to online shopping which has been capitalised on by specialists such as Asos and Boohoo.

Many retailers have struggled to survive amid the crisis, according to the Centre for Retail Research. These include:

Edinburgh Woollen Mill, which owns Jaegar and Austin Reed has filed notice to appoint administrators, putting 21,000 jobs at risk.

Debenhams, which said in August it would cut thousands of jobs, is up for sale and trying to find a new owner.

The DW Sports chain which entered administration in August threatening 1,700 jobs.

Scots-based clothing retailer M&Co which has gone into administration and said it would cut nearly 400 jobs in August.

Even before the pandemic, Gap was fighting to revitalise itself after losing younger shoppers to cheaper fast fashion brands such as Zara, H&M and Forever 21 over a number of years.

Earlier this year, Gap said it planned to close over 225 unprofitable Gap and Banana Republic stores globally as a part of a restructuring plan.

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