Jun 16, 2015 2 min read

Gap announced on Monday that it planned to close one-fourth of its stores in North America over the next few years, potentially affecting thousands of jobs, as the brand struggles to turn around a business mired in a long sales slump.

The retailer said in a statement that it would shutter 175 of its 675 Gap stores in North America, of which about 140 will close in the current fiscal year that ends in January. The closings will leave the Gap label with about 500 specialty stores in the region, in addition to Gap’s 300 outlet stores, which are not being closed.

The bulk of the stores to be closed are in the United States. Gap will also close a limited number of European locations, the company said, though it did not give a specific store count. The retailer is slated to update investors on its turnaround plans on Tuesday.

Gap also said that it would eliminate about 250 jobs this year at its corporate headquarters in San Francisco. But it declined to say how many store employee positions would be lost. The company has about 141,000 full- and part-time employees worldwide, in about 1,600 company-owned and franchise stores. It had been one of the first retailers to raise wages for its hourly workers in a recent wave of pay increases at some of the country’s biggest retailers.

With the store closings, “we feel confident that we’re going to be positioned to restore the brand and get it back on track as quickly as possible,” Art Peck, who took over as Gap’s chief executive in February, said in an interview. “We never want to close stores, but we felt this was the right decision.”

After dominating khaki and denim culture through the 1990s, Gap has stumbled in recent years, hurt by management blunders, a revolving door of executives and, by its own executives’ admission, uninspiring fashion. As with many midrange apparel retailers, both Gap and its sister brand, Banana Republic, have lost core shoppers, who were lured away by cheap chic styles offered by the likes of H&M.