Art Peck is bringing his balancing act to a Wall Street audience today.
And his plans include tilting toward growth at Old Navy and Athleta, while shuttering about 200 Gap and Banana Republic stores and cutting $500 million in expenses over three years.
Gap Inc. said Peck, the retailer’s president and chief executive officer, would give an overview of the firm’s “balanced growth strategy” at Goldman Sachs’ 24th annual global retailing conference.
“Over the past two years, we’ve made significant progress evolving how we operate — starting with getting great product into the hands of our customers, more consistently and faster than ever before,” Peck said. “With much of this foundation in place, we’re now shifting our focus to growth. We will leverage our iconic brands and significant scale to deliver growth by shifting to where our customers are shopping — online, value and active.”
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Gap plans on continuing to focus on its “growth brands” and projected Old Navy sales would top $10 billion and Athleta would exceed $1 billion in the next few years. The growth is seen coming from online and mobile expansion, U.S. store growth and “continued market share leadership in loyalty categories.”
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Over the next three years, Gap expects to add a total of 70 new stores to its fleet of roughly 3,200 owned doors. That includes the addition of 270 Old Navy and Athleta stores combined, but also the combined closure of 200 doors under the Banana Republic and Gap nameplates.
Meanwhile, the company will also continue to develop its online business.
To help pay for it all, the firm plans on producing about $500 million in expense savings over the next three years “by better leveraging its size and scale, cross-brand synergies and streamlining operations and processes.”
A portion of those savings will be reinvested in growth initiatives.
Investors liked the plan and pushed shares of the company up 3.6 percent to $24.90 in early trading on Wall Street.
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