Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Failure to invest $ 140 million in a warehouse in Texas as online sales increase

Failure to invest $ 140 million in a warehouse in Texas as online sales increase

A pedestrian walks to GAP’s closed flagship store 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 efforts to double its online business over the next two years.

Upon completion, Gap said the 850,000-square-foot facility would be able to handle 1

million packages a day. It will initially be used for Old Navy’s thriving 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. In addition, it should bring over 1,000 part-time jobs and seasonal jobs in the region by 2026.

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

The health crisis at Covid has accelerated the transition to e-commerce and forced many retailers to rethink their investments and invest more money in supply and logistics chains. E-commerce giant Amazon has announced several investments in its warehouses, including the construction of new ones, as its retail business has thrived over the past year. The big-box chains Walmart and Target have found ways to use their stores as mini-execution centers, while Macy’s took two of its department stores late last year and turned them into pint-sized distribution centers.

While Gap’s sales fell from 2019 levels during the health crisis, with fewer Americans visiting malls and shopping for clothing, the company saw strong growth online. And he expects that to stay around.

Gap said it plans to pull half of its sales from the Internet by fiscal 2023 as it closes weak stores and invests more in its growing clothing brands Old Navy and Athleta. The company is in the process of closing about 30% of its eponymous Gap and Banana Republic stores in North America, which will leave it with a larger presence online and away from malls.

For the quarter ended October 31, Gap’s digital business grew 61% to 40% of total sales. The company said it added more than 3.4 million customers online during the period. Overall, revenue was about equal on an annual basis during the quarter, amounting to $ 3.99 billion.

Differences in shares have increased by about 44% in the last 12 months.

The trader is expected to report profits for the fourth quarter after the market closed on March 4.

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