Thousands of jobs at risk as Gap considers closing all UK stores

LaToya Harding
·2-min read
Gap store
A basket of flowers hangs near Gap Inc's flagship retail store at the Powell Street cable car turn in San Francisco, California. Photo: Robert Galbraith/Reuters

American retailer Gap (GPS) is mulling the closure of all of its UK stores, putting thousands of jobs at risk.

The fashion house said shops in the United Kingdom, France, Ireland and Italy could shut at the end of the second quarter in 2021, along with is European distribution centre in Rugby, Warwickshire.

It is looking to shift its operations to a franchise-only model in Europe.

In 2018, Gap’s parent company, which also owns Old Navy, shut its entire Banana Republic chain in the UK. It confirmed that it would also close more than 200 of its main brand and Banana Republic stores globally this year.

Mark Breitbard, head of Gap brand global, said: “As we conduct the review, we will look at transferring elements of the business to interested third parties as part of a proposed partnership model expansion.

“Franchise partnerships are a strong and cost-effective way to amplify the brand.”

A Gap spokesperson told the BBC that it was also looking at "alternative ways to operate the European e-commerce business." The spokesperson declined to give a breakdown of the number of stores and employees Gap has by country.

READ MORE: UK retail sales surged in September

The coronavirus pandemic has wreaked havoc across the already-struggling retail sector, which was battling a rise in online shopping, increased business rates and declining customer footfall.

In the three month to August, Gap sales fell 18% to a pre-tax loss of $41m (£31m).

The company, founded in 1969 and headquartered in San Francisco, had 129 Gap-branded stores in Europe at the end of July and around 400 franchise stores.

It comes as Edinburgh Woollen Mill, the owner of high street brand Jaeger and Peacocks has been granted a 10-day extension to work on a rescue plan and speak to potential suitors.

The high street clothing chain announced earlier this month that it would collapse without filing for an intention to appoint administrators with the High Court. A move which puts 24,000 jobs at risk.

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