With the bad economy and the high unemployment rate Gap is planning to close one hundred eighty-nine stores in the United States by the end of 2013 but triple the number of the stores in China from fifteen to about forty-five by then end of the next year. Gap has previously stated their goal of reducing the square footage in the United States by ten percent from 2007 to the end of 2013. In turn, they want to try to double the revenue from outside of the United States to thirty percent by the end of 2013.
One of the reasons that Gap is looking overseas for growth is that with the down economy the people here in the United States are cutting back on their spending. Gap’s sales have gone down because of the growing competition from retailers like Abercrombie & Finch. To help improve its profits, Gap has either reduced the size of their stores or closed some in the past few years. The plan to reduce the square footage in the United States was announced in 2008 but at that time the number of stores was not disclosed.
By the end of 2013 there will be seven hundred Gap stores still opened, down from one thousand fifty-six in 2007. The first Gap store will be opening in Hong Kong in a few weeks. Gap also owns Banana Republic and Old Navy stores. The first Banana Republic store will open later this year in Paris, and within the next eighteen months, they are planning to expand Old Navy outside of the United States to Japan.