US retailer Gap will close 140 North American stores and a “limited number” in Europe during 2015.
The number of US store closures will rise to 175 over the next few years, Gap said. The changes will not affect its Gap Outlet and Gap Factory Stores.
Gap will have about 1,600 company-operated and franchise locations worldwide by the end of the process, including 800 in the US. It has not provided details on the European store closures.
It will also axe around 250 roles in its head office, primarily in the US, during 2015.
The company estimates an annual sales loss of approximately $300m (£192m) associated with the store closures.
One-off costs are expected to be in the range of approximately $140m to $160m (£90m to £103m), of which about $55m to $75m (£35 to £48) will be non-cash. These will mostly fall in the second quarter of 2015.
The company estimates the annual savings will be approximately $25m (£16m) from 2016 onwards.
“Returning Gap brand to growth has been the top priority since my appointment four months ago – and Jeff [Kirwan, global president for Gap] and his team bring a sense of urgency to this work,” said Gap chief executive Art Peck.
“Customers are rapidly changing how they shop today, and these moves will help get Gap back to where we know it deserves to be in the eyes of consumers.”
Kirwan, who was appointed in December, added: “We’re focused on offering consistent, on-brand product collections and enhancing the customer experience across all of our channels, including a smaller, more vibrant fleet of stores.”
On the staff cuts, he said: “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.”