Gap Inc. to close 21 percent of its North American Gap stores

Gap Inc. has announced it will close 21 percent of its Gap brand stores in North America by the end of 2013, the Wall Street Journal reports. It will have 700 stores in the region, which is about a third fewer stores than the company had at the end of 2007, the Los Angeles Times reports.

The company also said that, while it will continue to operate the same number of Old Navy stores, it will make them smaller. By the end of fiscal year 2013, Gap "expects to potentially remove" another 1 million square feet from its Old Navy locations, the L.A. Times reports.

“We are focusing on a smaller and healthier fleet in North America,” Chief Financial Officer Sabrina Simmons told Crain’s New York Business.

According to Reuters:

Sales at Gap's North American stores open at least a year fell by at least 5 percent in six of the last seven years and have kept dropping this year, a far cry from the chain's heyday in the 1980s and 1990s as the go-to retailer for casual American style.

In an interview on the eve of Gap’s investor day on Thursday, President of Gap North America Art Peck told Reuters that the company had lost its way by straying from high-quality jeans and other basics. "What's expected of us is pretty clear," Peck said. "I think it's been us who've kind of wandered around." Peck joined Gap in February following a management reshuffle.

The company is redesigning its clothes to be basics-with-a-twist, Peck told Reuters, and straightening up stores that look messy. "We have far better product in our stores than we're getting paid for," Peck said.

While the Gap pulls back in North America, it’s expanding abroad. The company is tripling the number of Gap stores in greater China to 45 by the end of 2012 and will open its first Old Navy store in Japan in the next 18 months, Reuters reports.