Gap Set To Close Stores In The U.S.

Gap has always been known for being a popular retailer of casual, comfortable clothing in the United States. Recently Gap announced that it is closing down many of its stores, bringing the number of stores in the U.S. to 700. Instead of expanding in the United States, Gap decided to tackle one of the most profitable and fastest emerging countries, China. The company decided to open more stores internationally, seeing that it could make more money in newer, emerging markets. One of Gap's brands, Old Navy, is also opening an outlet in Japan. Since the economy took a downturn, retailers have to find markets that will many their brands profitable and in demand. It also makes the company, as a whole, stronger since it will have international customers who will eventually develop brand loyalty. Besides moving their brands overseas, cotton prices have significantly dropped as well, thus increasing profit for retailers.

My view:
Since people in the U.S. are being laid off and can't afford shopping at places like GAP and Banana Republic, they are just shipping their stores along with their jobs to other countries for a profit. People are saving money instead of spending money and that is why retailers, like Liz Clairborne, are suffering because their products aren't in demand as much. Retailers are left with the decision of closing down their stores completely or taking their stores to other markets.

http://bottomline.msnbc.msn.com/_news/2011/10/13/8308229-gap-to-shutter-a-third-of-us-stores-expand-globally?gt1=43001