Gap To Invest $ 140 Million In Texas Warehouse As Online Sales Increase –

Gap To Invest $ 140 Million In Texas Warehouse As Online Sales Increase

A pedestrian walks past the closed GAP flagship store on August 18, 2020 in San Francisco, California.

Justin Sullivan | fake images

Gap said Wednesday it will invest $ 140 million to build a distribution center in Longview, Texas, as part of its effort to double its online business over the next two years.

Upon completion, Gap said the 850,000-square-foot facility will be able to process 1 million packages per day. Initially, it will be used for Old Navy’s burgeoning e-commerce business and then expanded to other parts of the Gap business.

Gap expects the facility to create more than 500 full-time jobs by the end of 2023 and more than 1,000 in the next five years. It should also bring more than 1,000 part-time and seasonal jobs to the area by 2026.

Construction will begin in April. Gap expects it to be fully operational in August 2022.

The Covid health crisis has accelerated the shift to e-commerce and has forced many retailers to reconsider their investments and invest more money in supply chains and logistics. E-commerce giant Amazon has announced several investments in its warehouses, including building new ones, as its retail business has exploded over the last year. Large chains Walmart and Target have found ways to use their stores as mini fulfillment centers, while Macy’s took over two of its department stores late last year and turned them into small distribution centers.

While Gap’s sales have plummeted from 2019 levels during the health crisis, with fewer Americans visiting malls and shopping for clothes, the company has seen unbridled growth online. And hope it stays.

Gap has said it plans to derive half of its internet sales by fiscal 2023 as it closes underperforming stores and invests more in its growing Old Navy and Athleta clothing brands. The company is in the process of closing roughly 30% of its namesake Gap and Banana Republic stores in North America, leaving it with a greater presence online and away from shopping malls.

For the quarter ending October 31, Gap’s digital business grew 61% and represented 40% of total sales. The company said it added more than 3.4 million online customers during the period. Overall, revenue was virtually flat year-over-year during the quarter, at $ 3.99 billion.

Gap shares have risen 44% in the last 12 months.

The retailer is expected to report fourth-quarter earnings after the market closes on March 4.


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