Banana Republic, the blackest mark on Gap Inc.’s balance sheet, will exit the United Kingdom.
People familiar with the matter told Retail Week that all eight of Banana Republic’s U.K. stores could close by early 2017.
That disclosure followed Gap Inc.’s announcement last May that it would shutter select “dilutive” Banana Republic stores, primarily internationally, in fiscal year 2016. The specialty chain currently has one location in Bath, while the remainder are in London.
According to Retail Week’s sources, the company informed staff of the upcoming closures Tuesday. H&M and Zara have reportedly agreed to take over some of the leases. It’s not yet clear whether the store will maintain a presence online.
Sales have been on a downward spiral at Banana Republic for some time now. Comparable store sales globally fell 9 percent in September, 10 percent in August, 14 percent in July, 4 percent in June and 11 percent in May. In fact, in the year ended Jan. 30, Banana Republic global revenue declined from $2.9 billion to $2.66 billion.
Banana Republic opened its first U.K. store in London in 2008. Within two years, then-European chief Stephen Sunnucks said that location was already one of the chain’s top three performing stores worldwide.