Can’t get it in Gap! The fashion outlet will cut hundreds of employees as it tries to cut costs and make the company more streamlined — amid plans to cull 350 stores across the US by the end of the year.
- Gap is cutting hundreds of employees from its global workforce to cut costs Amid plans to cull 350 stores across the US by the end of the year
- The latest round of discounts is part of a restructuring to make the iconic American fashion brand “smarter and less bureaucratic”.
- It saw net sales drop six percent to $15.6 billion for the fiscal year that ended Jan. 28 and shifted to $202 million from a profit of $256 million previously.
Gap is cutting hundreds of employees from its global workforce to cut costs and streamline the company amid plans to cull 350 stores across the US by the end of the year.
The latest round of discounts is part of a restructuring to make the iconic American fashion brand “smarter and less bureaucratic.”
It comes after Gap laid off about 500 corporate employees mainly in its San Francisco and New York offices in September as part of efforts to save $250 million annually.
The retailer saw net sales drop six percent to $15.6 billion for the fiscal year that ended Jan. 28 and turn up a loss of $202 million from a profit of $256 million a year earlier.
Gap was previously among the largest operators of mall stores in the country, but the brand has decimated since the pandemic and has closed 299 stores across North America since October 2020.
Chairman and interim CEO Bob Martin sent a memo to employees last week outlining the latest cuts that will be larger than last time, according to the Wall Street Journal.
Gap is cutting hundreds of employees from its global workforce to cut costs and streamline the company amid plans to cull 350 stores across the US by the end of the year.
The retailer’s share price has fallen nearly 70 percent in the past five years
“Our goal is to flatten the organization, increase spheres of control to create more powerful and individual empowering roles, and reduce layers to remove bottlenecks and make better, faster decisions,” he said.
Gap began notifying employees it planned to lay off in its international sourcing department on April 18.
The memo said it would notify those at its San Francisco headquarters about the potential cuts later this week and notify the finance team in late May.
The leaders of each of the retailer’s brands — Gap, Banana Republic, Old Navy and Athleta — are reviewing ways to strip away the layers of management to speed up decision-making, a source said.
They added that Gap’s restructuring plan is about tackling years of mounting bureaucracy that is making the company ineffective.
A gap fell on the competition with executives concerned more about protecting their area than developing new products for shoppers, according to the source, and style decisions stalled in endless meetings.
Gap’s restructuring plan is about tackling years of growing bureaucracy that’s been making the company ineffective, according to a source.
The now closed Gap store at 555 Michigan Ave. On the Magnificent Mile in Chicago
She’s had to deal with several issues over the past year with her Old Navy brand including when a plan to make clothing sizes for everyone backfires, a messy breakup with musician and designer Kanye West and a buildup of excess inventory.
The retailer said it identified an additional $300 million in cost-cutting last March, which is stripping away the layers of management.
They didn’t disclose how many jobs would be lost, but they did announce that the senior position of its chief growth officer would be eliminated. Athleta CEO Mary Beth Laughton also left the company last month.
There are about 95,000 Gap employees worldwide, as of January, most of whom work in retail locations while about 9 percent of its employees work in headquarters locations.
Chief Financial Officer Katrina O’Connell confirmed that “another 50 to 55 Gap and Banana Republic stores” in North America will close this year to meet the goal of closing 350 stores.
“We remain on track to achieve our goal of closing 350 non-strategic Gap and Banana Republic stores in North America by the end of 2023 and the end of fiscal 2022 after achieving nearly 90 percent of that goal,” she said. ”
The company had about 2,400 stores in the United States.
Gap’s stock price has fallen about 70 percent in the past five years and is down 14 percent over the past year.
The company continues to operate without a permanent leader after the previous CEO stepped down last July.
Interim CEO Martin said in March that the board was close to choosing the permanent appointment and that he would be an external candidate.
A Gap store in Manhattan, New York closed its doors and was replaced by the state’s first licensed marijuana store in December that is operated by social services group Housing Works.
