In July, the company completed an analysis of its 3,170 stores,seeking to assess the role of each store in its market and theappropriate size for each unit. The results showed that Gap'schains had too much space, says Glenn Murphy, chairman and CEO ofGap Inc.

"We've never had a clear real estate strategy," Murphy explains."We now have that information, and it will allow us to make quickdecisions. The real estate comes down to the quality of the malland the quality of the real estate."

The company will first approach its landlords regardingdispositions, as they may have knowledge of tenants who will wantor need the space, he says. Gap now plans about 100 new stores forthe year, primarily in the Banana Republic division, a reduction of15 stores. Store closings remain steady at about 115. Those numbersinclude store repositionings, which count both as an opening and aclosing. Net square footage is expected to remain roughly flat forthe fiscal year.