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Gap has launched a strategic review for its European business that may result in the possible closures of company-operated stores in the UK, France, Ireland and Italy at the end of Q2 2021.
In addition, it is reviewing its warehouse and distribution model, as well as its Gap and Banana Republic company-owned e-commerce operations in Europe. A possible outcome of the review also includes the closure of its EU distribution centre in Rugby.
It comes as the group said it would now focus on “harnessing the power of Gap brand in asset-light ways”. Going forward, it said it aims to transform its business model “through partnerships that grow and amplify our global reach”.
The global retailer will now look at transferring elements of the business to interested third parties as part of a proposed partnership model expansion, adding that franchise partnerships are a “strong and cost-effective way to amplify the brand”.
Through franchise, the Gap brand currently reaches customers in 35 countries with more than 400 stores and 14 e-commerce sites.
Mark Breitbard, head of Gap Brand Global, said: “We are committed to sharing more as we thoughtfully work through this process. While the work is tough, we have our eyes set on leveraging our brand power to deliver Modern American Optimism to customers around the world.
“To the teams that support our European business, I want to thank you for your understanding as we go through this process and express my appreciation on behalf of the entire leadership team.”
