U.S. retailers Gap and Lowe's announced last week that they will close a combined 209 stores as part of their expansion strategies. Lowe's will close 20 stores and expects to open 10 to 15 stores per year in North America from 2012 forward. Gap will close 189 stores as well as downsize an undisclosed number of Old Navy stores and expand overseas growth.
The Lowe's store closing strategy aims to profit from its top stores by closing 20 underperforming stores in California, Colorado, Illinois, Louisiana, Massachusetts, Maine, Michigan, Minnesota, New Hampshire, New Jersey, New York, Rhode Island, Virginia, Washington and Wisconsin. Ten locations closed on October 16 and the remaining 10 will close in one month, following an inventory sell-through.
Additionally, the company announced it has discontinued a number of planned new store projects. Lowe's now expects to open 10 to 15 stores per year, compared to a prior assumption of approximately 30 stores per year.
"We have an obligation to make tough decisions when necessary to improve profitability and strengthen our financial position," says Robert A. Niblock, CEO of Lowe's. "Lowe's remains committed to making strategic investments and focusing resources in a manner that will generate the greatest shareholder value, enhance the customer shopping experience and create sustained customer loyalty over the long term."
For long-time struggling Gap, having a strong set of stores is also a top priority in its store closing and expansion plans. The retailer plans to reduce the number of brand stores by 21%, from 889 to 700, by the end of 2013. Expansion plans include the opening of an Old Navy store in Japan and nearly tripling the number of Gap stores in China to 45 by the end of next year. The company's first Banana Republic flagship in Paris is scheduled to open this year.
"The goal overall is to return the brand to health, and part of a healthy brand is a high-performing fleet of stores," says Gap spokesperson Louise Callagy.
The Gap store closings announcements mirrors a similar report in June 2011 that the retailer planned to close 200 stores by the end of 2013. Whether those store closings are the same as the recently announced 189 store closings are the same is unclear. To read the full story, see the RIS News article Gap and Talbots Closing Over 300 Combined Stores.