Turning point for Gap as 200 stores close worldwide

After 40 years, the brand for yummy mummies and yuppies at play is forced to tailor its ambitions

For four decades it has been the casual clothing purveyor of choice for yummy mummies and off-duty yuppies, catering to fashion-conscious customers with a certain amount of disposable income but, first and foremost, an interest in sartorial pragmatism. No more: Gap is cutting back.

In a presentation at a consumer conference, live-streamed on the company's website,chairman and CEO Glenn Murphy has announced that Gap is to close 200 of its 900 worldwide stores by 2013, and focus on modernising its signature look. He also admitted that Gap had not tried hard enough to attract ethnic minority customers in the US.

In a masterful attempt at accentuating the positive, Mr Murphy described the brand's repositioning as "a huge opportunity ... to fill in with trend-right products ... and focus on new category development". Marketing will shift, he said, "disproportionately to acquiring new customers".

The Gap, as it was originally known, first opened in San Francisco in 1969, masterminded by a businessman, Don Fisher, who died in 2009. The cotton and jersey separates it sold, along with denim and relaxed tailoring, soon dictated the look of the American middle classes. It was preppy without being stuffy – the name was suggested by Fisher's wife, Doris, as a take on the phrase "generation gap" – and it provided clothing for an emergent band of shoppers who didn't want to look like their parents had done at their age.

This is still, broadly, what Gap aims for. A reliable source of practical basics and classic clothing, the American chain became a byword for relaxed modern casual wear. Perennial pieces from the store include chinos, jeans and white shirts, although recent design team changes and high-end collaborations have pushed the brand's offerings in new directions.

"We focused on the denim collection 18 months ago," said Gap's head of global PR, Anita Borzyszkowska, "improving the fabric, fit and details with the aim of making jeans priced around £40 comparable to jeans that might cost £200." Other recent directives have included a "black pants" capsule and a "perfect trouser" collection. "Gap is most successful when it finds its place within the season's trends," added Borzyszkowska. "The flare and the wide-leg pants are good examples. They are the sort of pieces that could appeal regardless of how closely you follow trends."

Stacey Duguid, executive fashion editor at Elle, added: "[Gap] resolutely sticks to its brand identity, never veering too far into trends. Gap clothing is always instantly recognisable, which I don't think in the current climate is such a bad thing."

The store has a history of successful designer collaborations too, such as dresses by Roland Mouret or a safari capsule by Alexander Wang. Last season saw the launch of a range with the Italian couture house Valentino, where signature Gap khakis were transformed with ruffles and zips. There is also Stella McCartney's on-going kids' collection – although pricey in comparison to other high-street childrenswear offerings – which remains a hit among shoppers.

So Mr Murphy's remarks about a shift of focus and the closing of branches seem to have come out of the blue. They reflect changes affecting the fashion industry as a whole, with soaring cotton prices and diminishing zest for consumption.

Against this, Gap has a broad demographic: although it focuses its advertising on those aged between 25 and 30, it has ranges for both newborns and adults. As a consequence, its customer base is much bigger than, say, Topshop or H&M.

"People have a loyalty to Gap," said Kay Barron, Grazia's fashion news and features editor. "They know what they're going to get. It's the fashion equivalent of Boots – trustworthy, friendly and sells all the essentials."

Mind the Gap

August, 1969 Don and Doris Fisher open the first Gap store in San Francisco

1973 Grows to more than 25 stores, including areas outside California

1974 Gap begins to sell private-label merchandise

1984 Firm stops selling all brand-name clothes except Levi's

1986 First GapKids store opens.

1987 First international Gap store opens in London

1990 babyGap brand is introduced

1991 It stops carrying Levi's and sells only its own Gap brand of clothes

2003 Gap, along with 21 other companies, is hit with a class action lawsuit filed by sweatshop workers in Saipan. A $20m settlement is reached, but the firm does not admit liability

2004 Donald Fisher stands down as Chairman, His son, Robert, takes over

2011 Gap announces it is closing 200 stores