Hundreds of Gap and Banana Republic stores prepare to close

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Gap expects Old Navy to record $10 billion in sales in the next few years.

Gap announced plans on Wednesday to close roughly 200 "underperforming" Gap and Banana Republic stores.

Lower-priced Old Navy has been a bright spot for the clothing retailer, posting rising sales even as they fell at the Gap and Banana Republic. Meanwhile, Athleta sales will eclipse $1 billion.

Speaking at a retail conference Wednesday, Gap CEO Art Peck described the sales downturns at Gap and Banana Republic as "significant and acute", and admitted the company made "creative missteps" in its efforts to keep the brands competitive.

Gap offers its services through e-commerce platform which includes cross-brand shopping, omni-channel services, pick-up in store, buy online service yet to come and new personalization engine powered by customer data. That has resulted in sluggish traffic at the stores.

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As a part of its growth initiative strategy, Gap is preparing to reinvest a part of productivity related savings widen its margin.

The company did not reveal which stores will close. Since 2005, the chain has closed 650 stores and reduced its square footage by 5 million square feet, Peck said.

So far, the company has witnessed double-digit sales growth through its online and mobile businesses.

Gap Inc shares were unchanged in premarket trading Friday.

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