Gap to close 175 stores, cut 250 jobs

SAN FRANCISCO -- There was a big announcement Monday from Bay Area-based Gap. The struggling retail giant says it will close 175 stores and eliminate hundreds of corporate positions, all in an effort to make a comeback.

It was not announced which stores would be closing, but the company said the move will help the San Francisco original be profitable again.

There was a somber mood at Gap's San Francisco headquarters and employees did want to comment. There will be 250 positions will eliminated in the city and at its New York office.

Rapidly declining sales are forcing Gap to close 175 retail locations in North America. Shopper Sydney Durkovich said she was surprised. She told ABC7 News, "I think it's a shame because I like their clothes, they're fun and they're at a good price point."

Gap's move is no surprise to Bloomberg consumer reporter Lindsey Rupp. She said, "This brand, in particular, has been struggling five quarters of same store sales declines in a row. That's not good. So I think they felt they needed to make a drastic change."

A turnaround for Gap won't be easy. More people are shopping online and there is brutal competition from brands like H&M and UNIQLO.

We asked a few shoppers what Gap means to them. Some said the styles were too basic.

"I think I have one sweater from there; my mom bought it for me, but no. I don't normally go in," shopper Anya Bayerle said.

"Fashion's really changed. That [store] is like really basic," shopper Donna Shahreza said.

Gap CEO Art Peck, told us in a statement: "Customers are rapidly changing how they shop today. These moves will help get Gap back to where it deserves to be in the eyes of consumers."

Don and Doris Fisher opened San Francisco's first Gap store in 1969. It's a legacy the retail giant hopes will live on.