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Gap Cutting Expansion Plans

SAN FRANCISCO-The company is opening about 100 new stores, down from the 214 it opened last year.

By Debra Hazel | Updated on February 29, 2008

SAN FRANCISCO-Gap Inc. is cutting its store growth in half compared to 2007, and will be reducing the size of its stores, executives said at the company’s fourth quarter conference call. Instead, in North America it will focus on what the company calls the “Three Rs”: right-sizing, repositioning and remodeling stores

“We will be very selective going forward on new store openings in the North American market,” said Glenn Murphy, chairman and CEO. “With 40 million sf of space, the real growth is in reducing the size of the points of distribution rather than the number of points of distribution.”

Excluding 15 store repositions, the company expects to open about 100 store locations and close about 85 stores (weighted toward Gap units) this year. In 2007, the company opened 214 stores and closed 178 units, for a total of 3,167 stores at the end of the fiscal year. The overall real estate strategy determining the most efficient store sizes will be completed by the summer.

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