Gap has decided to close 175 stores across North America over the next few years as it attempts to turn around the business.
A “limited number” of European shops would also close, the retailer said in a statement.
Gap has been struggling with falling sales as it competes with the likes of Europe’s H&M and Zara.
Like-for-like sales for the Gap brand fell by 15% in April, compared with a 3% rise in the same month last year.
Gap CEO Art Peck said: “Returning Gap brand to growth has been the top priority since my appointment four months ago.
“Customers are rapidly changing how they shop today, and these moves will help get Gap back to where we know it deserves to be in the eyes of consumers.”
Gap store closures will mean a loss of sales worth about $300 million, the retailer said, with one-off costs expected to be between $140 million to $160 million.
The retailer did not say how many employees would be laid off as a result.