Forth & Towne strikes out, 550 job cuts
Gap will close its Forth & Towne stores, take $40 million loss and focus on rebuilding Gap and Old Navy.
NEW YORK (CNNMoney.com) -- Gap Inc. said Monday that it will close its Forth & Towne stores after an 18-month pilot that began August 2005.
The retailer said Forth & Towne was not delivering an acceptable long-term return on investment and it will focus, instead, on revitalizing its Gap and Old Navy brands.
"We made the tough decision to close the brand and focus our efforts on stabilizing the existing businesses," Bob Fisher, Gap's chairman of the board and interim president and CEO, said in a statement.
"I want to thank the talented Forth & Towne team for their hard work in bringing this brand to life," said Gary Muto, President of Forth & Towne.
The company plans to close its 19 Forth & Towne stores by the end of June 2007. Of the 550 employees that will be impacted, Gap said it is looking at ways to redeploy them to positions at Gap, Banana Republic and Old Navy, where feasible.
The company said the pre-tax expenses associated with the closure of Forth & Towne to be approximately $40 million which will be recognized primarily over the first and second quarters of fiscal year 2007.