Gap Inc. is shuttering the concept after an 18-month pilot proved the store brand, which was aimed at women over age 35, wouldn't deliver "an acceptable long-term return on investment."
Focus on Gap, Old Navy
"We made the tough decision to close the brand and focus our efforts on stabilizing the existing businesses," Bob Fisher, Gap Inc. chairman and interim president-CEO, said in a statement. The marketer will instead turn its attention to reviving its Gap and Old Navy brands and other efforts with "greater potential" for building shareholder value.
The announcement comes just three days before Gap Inc. is scheduled to release its fiscal-year results and turnaround plans.
As a result of the decision, the company will close 19 Forth & Towne stores in 10 domestic markets by June. The closures will affect 550 employees; Gap Inc. said it will look at ways to reassign those workers to other stores. The company will take a $40 million pre-tax expense on the closure over the first half of the coming fiscal year. The company hasn't announced its plans for Gary Muto, president of Forth & Towne. The brand's ad agency, AR, New York, also handles Gap Inc.'s Banana Republic.
Gap North America posted an 8% decline in same-store sales for the fourth quarter and a 6% decline in January. Old Navy North America reported a 9% same-store sales drop followed by a 1% decline in January.
The move follows a string of management shake-ups including last month's resignation by Paul Pressler as CEO of Gap Inc. amid slumps in its flagship Gap and Old Navy brands. Other departures followed, including Cynthia Harris, president of Gap Brands; Charlotte Neuville, head designer for Gap North America; Denise Johnston, president of Gap Adult; and Ivy Ross, Old Navy's executive VP-product design.
Meanwhile, Marka Hansen, president of Banana Republic, moved to Gap North America as president, succeeding Ms. Harris. Last week, Gap hired Michael Cape as exec VP-marketing, Old Navy, from VP-director of brand marketing at J.C. Penney Co.
Gap has begun its celebrity-laden spring print and outdoor campaign from agency Laird & Partners called "khakis with attitude" in March fashion magazines.