Gap Inc. on Thursday pulled the trigger on a round of layoffs, which are happening in waves, domestically and internationally, sources said Friday. Gap declined to disclose the extent of the layoffs.
Meanwhile, Kellwood Co. is closing its Chico, Calif., distribution center, laying off about 150 low-level employees.
At Gap Inc., sources said Old Navy was hit with the latest cuts, including Canadian operations. Production areas seem to be targeted, and some consolidations of certain functions are under way.
A senior production executive, Michelle Sizemore, is said to have been let go, but that could not be confirmed.
Gap Inc. spokesman Greg Rossiter said Friday, “As part of the process of simplifying the way we do business and making the company more competitive, some level of job reduction is necessary, as difficult as it would be.”
He also said the company would not be making any single sweeping announcement on cutbacks, and noted Gap had discussed the issue during conference calls. He said a number of changes have taken place over the last several weeks, including shutting down Forth & Towne, closing a distribution center and converting Old Navy outlets to Old Navy retail stores.
“The changes are ongoing and will be for some time,” he said.
Separately, RetailWeek.com reported last week that Gap’s London headquarters would eliminate some positions, including some redundancies, and is expected to make an announcement to staff about the European team restructure on Tuesday. It is unclear whether store staff will be affected by the review.
The company continues to search for a chief executive officer to take over for interim president and ceo Robert Fisher. Egon Zehnder International was hired to conduct the search.
Kellwood plans to gradually phase out the former Koret facility in Chico between July 13 and Aug. 31. It will divert clothing products from Chico to distribution hubs in City of Industry, Calif., and Trenton, Tenn.
The $1.96 billion vendor notified the Chico center’s estimated 140 to 160 employees about three weeks ago that the plant will be shuttered at the end of August.
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“Changes in our business processes requiring less inventory handling and the economics of this facility led to this decision,” said Jeffery Streader, Kellwood global president, in a statement. “We will be working with the city and county to identify other job opportunities for these associates within the community.”
UNITE HERE, the garment union representing the workers at Chico’s distribution hub, is reportedly in talks with St. Louis-based Kellwood, which inherited the plant when it acquired Koret in 1999, to get the company to change its mind about closing the plant as well as severance packages.