Gap to close 175 stores in North America

Due to declining sales, clothing company Gap Inc. announced on Monday that it will close 175 of its North American retail stores in the coming years, including 140 closures this fiscal year.

The company estimated an annualized sales loss of approximately $300 million in addition to between $140 million and $160 million in one-time costs associated with the closures. In a press release, Gap said it expects to save approximately $25 million per year because of the closures beginning in 2016.

“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,” said Gap Inc. CEO Art Peck.

The closures will not affect Gap Outlet and Gap Factory stores. Gap will also lay off 250 employees of its headquarters workforce.

“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,” said Jeff Kirwan, global president for Gap.

Westchester and Fairfield counties are home to seven Gap stores each. It is not clear if any of those locations will be affected by the store closings.

Gap Inc., which also operates the Banana Republic, Old Navy, Athleta and Intermix brands, saw net sales of $16.4 billion in the 2014 fiscal year.