Over the next two months, the company will complete an assessment of its 40 million sf of US real estate and create a strategic plan around what Murphy dubbed the "Four R's": repositioning, relocating, remodeling and right-sizing. Many stores, he said, are too large, and separating some of Gap's various brands, including Body and Kids into separate units is no longer strategically smart.
"Our fleet is older than we would like and not reflective of what the brands once were," Murphy said. "And with 3,100 stores, we have not put in the time to create a strategy. Great retailers strategically define where they want to get to."
The result means reducing the size and number of stores in the United States, and combining Gap adult, Baby, Body and Kids into one large superstore in some locations.
The age of some stores, however, has one advantage for landlords, he said. Many are in prime locations in A malls, which still have value.
"One of the advantages of being a 40-year-old company is that we were going into malls early, taking the 40 or 50-yard-line space," Murphy said.
Meanwhile, the Gap will expand to Russia, its 18th country, and Banana Republic will expand to other U.K. cities beyond its London flagship. The outlet business will expand to Canada. As of May 3, Gap operates 3,177 stores worldwide.
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