NEW YORK (TheStreet) -- Gap (GPS) shares are up 0.24% to $38.29 in pre-market trading on Tuesday, recovering from the dip it experienced in after-hours trading yesterday following its announcement that it is closing 175 of its stores across the country amid flagging sales.
The San Francisco-based clothing retailer also announced that it will cut 250 jobs at its corporate headquarters.
The closing of the stores will result in an annual loss in revenue of about $300 million and the company expects to take a one time charge of $160 million related to the closing process.
The company also said that it expects to save $25 million annually following the closings.
Gap said 140 of the stores will be closed by the end of this fiscal year with the remaining stores to be shuttered incrementally over the next few years.
"These decisions are very difficult, knowing they will affect a number of our valued employees, but we are confident they are necessary to help create a winning future for our employees, our customers and our shareholders," said Gap Global President Jeff Kirwan.
Following the closures, the company will have 800 store locations in North America with about 1,600 company-operated and franchise locations spread across 50 countries.
TheStreet Ratings team rates GAP INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate GAP INC (GPS) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income."