DAVID GREENE, HOST:
And this is how bad things have gotten for Gap, the retail giant. The company's planning to close about 175 stores. That's roughly a quarter of its locations in North America. And Gap will eliminate up to 250 corporate positions. Sales have been dropping over the past decade, not just because people are shopping more online. Customers also seem to be preferring fashion brands that are both cheaper and adapt faster to trends. Here's NPR's Nathan Rott.
NATHAN ROTT, BYLINE: There was a time when Gap was it. Celebrities wore Gap clothes on the red carpet. Teams treated Gap like the unofficial high school uniform. There was even a recurring "Saturday Night Live" skit called "Gap Girls." This one, a game show hosted by Courtney Cox.
(SOUNDBITE OF TV SHOW, "SATURDAY NIGHT LIVE")
COURTENEY COX: Hi, welcome to Gapardy, the show that's a lot like "Jeopardy," except for all the contestants work at the Gap.
ROTT: But those golden days of Gap are gone. Even its customers outside of a storefront in Santa Monica, Calif. say as much. Here is Claire Robertiello, who says she's only here because she's pregnant and buying mom clothes.
CLAIRE ROBERTIELLO: In high school, in '89 through '93, I was cool to get stuff at the Gap.
ROTT: But now, it's just...
ROBERTIELLO: J.Crew took over, and that's it.
ROTT: OK, so J.Crew isn't the best example. It too is laying off workers due to poor sales. But her point remains. While cheaper retailers have done well because of prices and other stores, like H&M have thrived on quickly putting out the new, hip thing, Gap has struggled to adapt, which is part of the reason Gap's CEO, Art Peck, told an audience of investors that the decision to close a quarter of its remaining full-price shops in North America - or its fleet, in retail speak - was tough but the right thing to do, even going as far as to say it was overdue.
ART PECK: If we tighten up that fleet, we get the fleet more consistent with where we need to be. We can afford to invest in it, to keep it to brand standards. And we can afford to buy to it and assort to it in a more consistent and simple way.
ROTT: Essentially, get rid of the stores that aren't worth investing in and try to right the ship with the others. Dan Hess is the CEO of Merchant Forecast, a research company for retail investors.
DAN HESS: The conversation about strategic placement, the conversation about how many stores they need to keep open and how many they need to close, those are all secondary, in our view, to the fact that they need to offer product that consumers want to buy.
ROTT: Gap's leadership knows as much, they said in their talk with investors, but the question is, can they do it?
HESS: Unless they find that sweet spot where they're able to provide classic American basics and exist in a world that is kind of driven by fast fashion, then Gap becomes irrelevant.
ROTT: Hess is optimistic that the retailer can find that sweet spot. He thinks that it already has to an extent. Gap provides basic clothes - jeans, T-shirts, button-ups - that are the building blocks to any style or fashion. And, he says, if they improve the quality, they can thrive in that. Consumer Alex Ronaldo, outside of the Gap store in Santa Monica, agrees. She says Gap serves its purpose.
ALEX RONALDO: If there's a meeting coming up and I'm not trying to look necessarily fashionable, then I shop at Gap.
ROTT: It's not where you shop to go out for Friday night.
RONALDO: Definitely not.
ROTT: But maybe in the new retail market, that's OK. Nathan Rott, NPR News. Transcript provided by NPR, Copyright NPR.