One-fourth of Gap stores throughout North America will close, the company announced Monday.
In a statement, the company said 140 will close by January. A total of 175 are slated for closure.
The changes will not impact Gap Outlet and Gap Factory Stores, the company said. "In parallel with these moves, the brand will close a limited number of European stores during this period."
About 800 Gap stores will remain open.
The decision is "meant to align Gap’s organization in support of its new product operating model," according to Monday's announcement. "This will result in the reduction of the brand’s headquarter workforce, primarily in North America, by approximately 250 roles during fiscal year 2015."
“These decisions are very difficult, knowing they will affect a number of our valued employees, but we are confident they are necessary to help create a winning future for our employees, our customers and our shareholders," said Jeff Kirwan, global president for Gap.
The company estimates an annualized sales loss of approximately $300 million associated with the store closures, according to the announcement, and an annualized savings to be approximately $25 million, beginning in 2016.
