Gap Pulls Plug on New Concept

Gap(GPS) said Monday that it will pull the plug on its 18-month-old Forth & Towne concept to focus on its struggling existing brands.

The San Francisco-based specialty retail giant said Forth & Towne, targeted to women over age 35, "was not demonstrating enough potential for an acceptable long-term return on investment." Gap currently has 19 Forth & Towne stores in 10 U.S. markets.

"Forth & Towne was a great test of a promising concept and an illustration of the innovative risks you need to take in our business," said Bob Fisher, Gap's chairman and interim president and CEO, in a statement. "We made the tough decision to close the brand and focus our efforts on stabilizing the existing businesses."

The move comes as the company's Gap and Old Navy chains struggle with a two-year sales slump while grappling to find the right mix of merchandise. The company's other concept, Banana Republic, has shown some sales improvement in recent months, but the ongoing troubles at Gap and Old Navy recently led to the departure of Gap CEO Paul Pressler.

Dana Telsey, CEO and chief research officer at Telsey Advisory Group, says that shuttering Forth & Towne was the right move.

"It's a very small piece of the business," she says. "As the company focuses on its core brands, eliminating small distractions are essential."