Gap (GPS) Stock Continues To Climb On Store Closures

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Gap Inc (NYSE: GPS)

Gap stock is having a great day in the market today as investors continue to show their support of the recently announced store closures. Today, we’ll take a look at the announcement that the company made with regard to the store closures, discuss how this is likely to help the company as a whole, and talk about what we can expect to see from GPS moving forward.

Gap Will Close 175 Stores In North America

Gap recently announced that it will be closing 175 stores in North America throughout the next “few years”. The plan is n effort to “deliver more consistent and compelling product collections and engage customers across all channels”; and investors seem to love it. Throughout this fiscal year, 140 Gap brand stores will close; cutting about 250 jobs from the company’s payroll throughout the year. Once all closures are complete, Gap will have 800 brand stores in North America. Upon the announcement GPS CEO Art Peck had the following to say…

Returning Gap brand to growth has been the top priority since my appointment four months ago – and Jeff and his team bring a sense of urgency to this work…Customers are rapidly changing how they shop today, and these moves will help get Gap back to where we know it deserves to be in the eyes of consumers.”

What We’ve Seen From GPS As A Result

Investors are clearly happy with the announcement. While the stock gained in after hours trading following the announcement, the biggest gain so far came today. GPS hit resistance at $38.59 per share for the first time since June 4th today. Although we are seeing late declines today, it seems as though support will be higher and declines are far slower than normal. At this point, I’m watching closely for a break above $38.59. If this happens, we’re likely to see a big spike in the value of GPS.

What We Can Expect From The Stock Moving Forward

Moving forward, I’m expecting to see great things from GPS in both the short and long term outlooks. Here’s how I see it…

  • Short Term – Gap’s new CEO is obviously taking the reigns in a positive way; and his moves are exciting investors. As mentioned above, I’m expecting to see support reached at a higher level than we’ve seen lately; leading to a breakout. So, watch this one closely. We may see decent gains in the short run.

  • Long Term – In the long run, I’m also starting to regain faith in GPS. The new CEO is making bold changes to put the company back into the spotlight. He recognizes that consumers are shopping online more and more today than ever before; and seems to want to take advantage of that channel. Also, with a smaller amount of retail stores in North America, the company can focus on brand management and a better experience in the 800 stores it has left. All in all, the plan seems solid; so, I’m expecting to see growth in the long run.

What Do You Think?

Where do you think GPS is headed and why? Let us know in the comments below!

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