Will Gap's Downsizing Work?

Gap Inc. Chairman and CEO Glenn Murphy yesterday told a New York City investor conference that his company is looking at combining concepts into single stores and reducing store count.The retailer will accomplish this, in some cases, by putting an adult Gap, along with baby, body and kids concepts, under one roof creating a superstore. Industry observers have said for years that Gap’s overexpansion, creating 40-million sf of space, has led to its four years of sales declines. Same-store sales in May, for example, fell by 14% year over year.This strategy makes more sense to us right now, especially with a weakened economy, than opening up new concepts. Why not consolidate chains, especially if they are all branded on the Gap model in the first place?We are curious to see how retail landlords react to this news. Could it hurt the many malls with multiple Gap concepts? And is this strategy enough to finally turn around sales at the chain?