NEW YORK - Gap Inc. plans to close some US stores while expanding its international and online business. It said falling cotton prices will boost its profit margin.
Gap will reduce the number of its North American namesake stores to about 700 by the end of 2013, a 34 percent decrease from the end of 2007, chief financial officer Sabrina Simmons said yesterday at an investor meeting. The chain had 889 stores open in the first half of 2011.
Lower cotton prices, which declined after reaching record highs this year, will help increase profitability, the company said.
“We are focusing on a smaller and healthier fleet in North America,’’ Simmons said. “Normalizing cotton prices should help our margins, as well.’’
The company said it plans to return operating margins to 2010 levels “over time.’’
Gap will expand the presence of its namesake and Banana Republic stores in China, South America, and Italy, said Stephen Sunnucks, president of international operations.