Gap to close all its shops in the UK and Ireland

US clothing retailer Gap will close all its 81 outlets in the UK and Ireland, part of plans to go online only.

The company, which owns brands including Old Navy and Banana Republic, said it would close the shops “in a phased manner” by the end of September.

The apparel chain was also in discussions to sell its outlets in Italy and France.

In France, Gap was in talks with Hermione People and Brands to take over all its shops there, while an unnamed partner was lining up to buy its Italian stores.

It did not disclose how many employees would be affected by the moves but said it would begin a consultation process with staff.

The decision comes after a strategic review that began last year as the company attempts to boost profitability and improve operations after the pandemic battered high street retailers.

Gap said “we are not exiting the UK market” and that it would continue to offer its products online.

"We believe in Gap's global brand power. We are executing against Gap's power plan and partnering to amplify our global reach," the company said.

"We are not exiting the UK market. We will continue to run and operate our Gap e-commerce business in the United Kingdom and Republic of Ireland."

Kate Hardcastle, a consumer and retail expert, said Gap failed to adapt to changing consumer tastes since it began operating in Britain in 1987.

“They were very firm in their offer and that carefully curated denim that once had curb appeal for shoppers suddenly became lost in time,” she told BBC’s Radio 4 Today programme.

“As consumers have moved on, competition has come into the marketplace.”

She expected the shop premises left behind would be difficult to lease in the present climate.

“Until we get some big thinking plans for our high street we’re going to see more empty stores,” she said.

Gap’s announcement comes as the UK government’s furlough scheme begins to wind down from Thursday.

For the first time since the scheme was introduced in March last year, employers will have to shoulder more of the costs of employees' wages. The government will pay 70 per cent, but employers will now tip in 10 per cent.

Meanwhile, the owner of low-cost fashion chain Primark said its third-quarter sales were better than expected after its outlets opened their doors following a Covid-19 lockdown.

Associated British Foods said Primark’s revenues hit £1.6 billion ($2.21bn) in the third quarter with the reopening of all shops and the opening of seven new stores, up from £600 million in the same period last year.

Primark’s like-for-like sales in the quarter were 3 per cent up on a two-year basis.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said Primark was benefitting from other retailers withdrawing from a physical presence in shopping centres.

‘’The GAP sized hole in the high street which will be left when the US retailer closes its final stores at the end of September will be hard to fill, given the big names which have already left bricks and mortar shops behind," she said.

"But Primark, one of the big fashion chains left standing, its likely to clean up from GAP’s exodus, attracting browsing shoppers whose options are dwindling. It is still turning heads on the high street, while one by one other fashion retailers fall by the wayside."