A pedestrian walks through the GAP flagship store closed on August 18, 2020 in San Francisco, California.
Justin Sullivan | Getty 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.
At the end, Gap said the 850,000-square-foot facility will be able to process 1 million packages a day. Initially, it will be used for Old Navy’s growing e-commerce business, then expand to other parts of Gap’s 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 by August 2022.
Covid’s health crisis has accelerated the shift to e-commerce and forced many retailers to rethink their investments and invest more money in supply chains and logistics. E-commerce giant Amazon has announced several investments in its stores, including building new ones, as its retail business has grown over the past year. Department store chains Walmart and Target have found ways to use their stores as mini-performance centers, while Macy’s took two of its department stores late last year and turned them into distribution centers. of small size.
While Gap sales have fallen from 2019 levels during the health crisis, with fewer Americans visiting malls and buying clothing, the company has experienced rampant growth online. And he hopes that will continue.
Gap has said it plans to take out half of its Internet sales by fiscal 2023 as it closes stores with less performance and invests more in its growing clothing brands Old Navy and Athleta. The company is closing approximately 30% of its eponymous Gap and Banana Republic stores in North America, leaving it with a larger online and out-of-mall presence.
For the quarter ended October 31, Gap’s digital business grew 61% and accounted for 40% of total sales. The company said it added more than 3.4 million customers online during the period. Overall, revenue was approximately year-over-year during the quarter, at $ 3.999 billion.
Gap shares have risen about 44% in the last twelve months.
The retailer is expected to report fourth-quarter earnings after the market closed on March 4th.