The tight economy is pinching retailers, prompting Gap Inc. to announce it would close 190 clothing stores in the next two years and Lowe’s Cos. to close 20 of its home-improvement stores in a month.
None of the Lowe’s closings is in the Toledo area.
The locations of the Gap shutdowns have not been announced.
The long-struggling apparel giant said shuttering the 190 stores would reduce its regular Gap stores to 700 and its outlet stores to 250, or a 21 percent decline, in the United States by the end of 2013.
The company’s Old Navy brand will have roughly the same number of stores in North America, but the locations will continue to downsize in terms of space. By the end of fiscal year 2013, Old Navy “expects to potentially remove” another 1 million square feet.
The company has suffered from weak sales for years as shoppers have turned to trendier rivals. It has had some success in turning things around — namely a line of “premium” denim launched at Gap stores two years ago.
But analysts say many of its fashions, such as women’s tops, have underperformed.
The retailer said it plans to expand its Gap and Banana Republic stores in China, South America, and Italy.
Gap Chief Financial Officer Sabrina Simmons told investors that cotton prices have declined since reaching record levels this year and that the change will help increase profitability.
“We are focusing on a smaller and healthier fleet in North America,” she said.
Company officials said that falling cotton prices will boost its profit margin.
Meanwhile, Lowe’s said it has just closed 10 stores and will close another 10 underperforming stores, cutting a total of 1,950 jobs. It says the move will allow it to focus on more profitable locations.
The stores were in 10 states, but none in Ohio.
The company said it would open 10 to 15 stores a year in North America, beginning in 2012. Previously it spoke of opening about 30 stores a year.
It will have 1,705 stores after the latest closings.
In August, Lowe’s said volatile weather and shoppers’ worries about the economy had hurt demand.
Its net income was nearly flat in the second quarter and the company lowered its yearly sales forecast.