Yahoo Finance Gap moves to close 19 stores, putting hundreds of jobs at risk
Hundreds of jobs are at risk after Gap moved to close 19 stores in Britain as the fashion retailer retreats from Europe.
The US chain, which once had the same UK market share as Primark, has decided not to extend some store leases when they expire at the end of July.
The decision comes as Gap revealed last year it was considering shifting its operations to a franchise-only model in Europe.
Gap’s remaining 50 standalone stores in the UK are still under review, Drapers first reported. The locations where shops would close have not been disclosed.
The distribution centre in Rugby, Warwickshire, is also at risk.
Gap said it was "keen to maintain a presence in Europe", but this could include a greater focus on its online sales.
A spokeswoman said: "We are proposing to close 19 Gap stores in the United Kingdom and the Republic of Ireland that have leases ending at the end of July 2021. These leases are not being extended due to the strategic review that we have under way."
In February, it emerged that Gap was putting increased pressure on landlords as it tried to end leases early.
Its parent company closed all Banana Republic stores in the UK three years ago.
Separately, the owner of Zara has been buoyed by shopping sprees since shops reopened worldwide, with profits coming in ahead of expectations.
Inditex, the world’s largest fashion retailer, said sales in May and June were twice as high compared to the same period last year thanks to pent-up demand.
Pablo Isla, the chairman, said: “Week after week we are seeing store traffic recovering. We are seeing a progressive recovery.”
His remarks came after Inditex reported sales of €4.9bn (£3.4bn) for the three months to April, up 56pc from the same period last year. However, that remains 16pc lower than in 2019.
The group, which also owns the Bershka and Stradivarius chains, made a net profit of €421m during the period. That was better than expected but still down on the previous quarter and lower than the €734m profit two years ago.
The majority of its stores are now open and sales so far are up 102pc ahead of 2020 and 5pc ahead of 2019. Shares fell 2.3pc in Madrid.
Chloe Collins, a retail analyst at GlobalData, said: “Despite its strong online proposition, Inditex was unable to offset physical losses as consumers in lockdown had little motivation to buy new trend-led apparel.”
Almost a quarter of the chain’s trading hours were lost from February to April due to temporary store closures as Europe was badly hit by a third wave of the pandemic.
Last month Zara began expanding into beauty products. The category is becoming a battleground for retailers including Next, Asos, Hut Group - one of the market leaders - and Boohoo after it acquired the Debenhams website from administrators.
The department store chain was one of Britain's biggest premium beauty retailers before it collapsed in December.
Inditex, which in June last year announced plans to close hundreds of stores, has 6,758 stores worldwide, down from 7,412 last April.
