Gap Inc. is the latest major retailer to announce store closures in response to declining sales. Gap Inc. will be closing 230 of their underperforming GAP stores worldwide over the next two years, many of them in the US and some in Canada. It's one of several moves the company has decided to make in order to cut back on costs and boost profits.

"We’re confident these closures will play an important role in revitalizing the brand," the Gap Inc. CEO said during a call with investors, USA Today reports. The stores remaining will need significant work - namely, getting reduced in size.

Many of the stores will be shuttered by the end of 2019, but the rest will close as their leases expire over the next two years. According to Gap Inc., this will lead to an estimated 40% of purchases made on the GAP website, allowing the company to save on store operation costs.

READ ALSO: Victoria's Secret Closing Down 53 Stores Across North America As Sales Decline

In addition to the store closures, Gap Inc. will be creating a separate public company for Old Navy following an uptick in Old Navy's profits. Old Navy continues to thrive as GAP's sales dropped by 5% in just three months, including the holiday shopping season. Banana Republic, another brand under Gap Inc., is underperforming as well.

"Following a comprehensive review by the Gap Inc. board of directors, it’s clear that Old Navy’s business model and customers have increasingly diverged from our specialty brands over time, and each company now requires a different strategy to thrive moving forward," says Gap Inc. chairman Rob Fisher.

READ ALSO: Payless Shoes Will Be Closing Almost 250 Canadian Stores Due To Bankruptcy

Gap Inc. will operate as a separate company under the name NewCo. It will be comprised of the company's other retailers including Banana Republic, Athleta, Intermix and Hill City.

READ ALSO: Hudson's Bay Closing Down All Home Outfitters Stores In Canada, Saks Off Fifth Stores May Be Next

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