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".
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