A BIG GAP SOON TO BE LEFT IN AUSTRALIAN RETAIL

A BIG GAP SOON TO BE LEFT IN AUSTRALIAN RETAIL

Come 31 January, 2018, all Gap stores in Australia will be shut down for good.

OrotonGroup (ASX: ORL), who manages the Gap franchise business in Australia, has entered into a binding agreement with Gap Inc to close all Australian Gap stores within the next six months.

OrotonGroup has faced its fair share of problems this year, when in May the company had $11 million shaved off its market value.

Analysts at the time said the company had two choices: sell its brands to an overseas buyer or to quit the ASX entirely.

The group, in an ASX announcement, has said it is too early to determine what the financial impact divesting from Gap will be, but the decision will limit any future losses.

Ross Lane, CEO of OrotonGroup thanked the Gap Australia team for their support over recent years in developing the brand.

The Gap announcement has sent shares in Oroton plummeting down to just $1.

There are six Gap stores in Australia: four in NSW and two in Victoria. Gap Australia employs around 50 full-time and 150 casual staff members.

Earlier this week, Oroton said it had negotiated a six-month extension to a $35 million debt it currently owes Westpac.

Oroton, in today's announcement, said securing the extension and making the agreement with Gap were "important milestones in the Strategic Review".

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

How communications technology can raise the bar on customer service, employee experience
Partner Content
From capturing feedback early to providing messages with a higher rate of cut-through, ...
Advertisement

Related Stories

Car subscription software company Loopit eyes global markets after $3.6m seed round

Car subscription software company Loopit eyes global markets after $3.6m seed round

In a bid to enter new global markets and capitalise on the growing ...

Fashion-tech startup Citizen Wolf uses data to tailor tees, alleviate landfill

Fashion-tech startup Citizen Wolf uses data to tailor tees, alleviate landfill

As a consequence of our addiction to fast fashion, Australia sends ...

Apollo to divest large share of motorhome fleet to get Tourism Holdings merger over the line

Apollo to divest large share of motorhome fleet to get Tourism Holdings merger over the line

In an effort to appease Australian and New Zealand regulator concer...

Dexus awards John Holland building contract in $2.1b Waterfront Brisbane project

Dexus awards John Holland building contract in $2.1b Waterfront Brisbane project

After securing an $830 million contract from Dexus (ASX: DXS), Melb...