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LOS ANGELES - Gap, seeking to focus on problems at its two main apparel chains, said yesterday it would shut down its newest chain, Forth & Towne, a move that will affect about 550 employees.
The company expects pre-tax charges of US$40 million ($56 million) for the closure of the 19 Forth & Towne stores in 10 US markets. The charges will be recognised over the first and second quarters.
Forth & Towne, designed to appeal to women between the ages of 35 and 50, was launched in August 2005. The stores featured larger, centrally located dressing rooms and were stocked with accessories, including handbags and shoes, to help women put together full outfits and drive impulse purchases.
Gap is struggling to turn around a two-year sales slump.
"We made the tough decision to close the brand and focus our efforts on stabilising the existing businesses," Gap chairman and interim chief executive Robert Fisher said.
Although analysts had recognised the underserved market that Forth & Towne was aiming for, some on Wall Street had criticised former Gap CEO Paul Pressler - who left the company in January - for focusing on new growth opportunities before fixing persistent problems at the company's two largest chains, Gap and Old Navy.
Gap also operates the more upscale Banana Republic chain.
- REUTERS
