NEW YORK (AFP) - Gap announced on Monday it will close 175 namesake stores in North America and eliminate 250 headquarters jobs as it responds to lower in-store sales with the rise of online shopping.

The youth-oriented apparel retailer said the majority of store closures would take place this year. After the closures, Gap will have about 500 specialty stores in North America and 300 outlet stores.

Gap chief executive Art Peck, who was promoted in February after leading Gap's growth, innovation and digital business, said a smaller modicum of physical stores was needed given shifting customer tastes.

"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 consumer," Mr Peck said.

A company news release did not say how many store jobs would be affected by the closures, in addition to those in the company's San Francisco headquarters.

"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 Mr Jeff Kirwin, global president for the Gap brand.

Gap expects a one-time charge associated with severance pay, inventory write-offs and lease cancellations of US$140 million (S$188.1 million) to US$160 million. Annual savings of US$25 million are expected to begin in 2016.

Monday's news release did not mention Gap's other two chains, Banana Republic, which has also struggled with lower sales, and Old Navy, which has seen sales rise of late.

Gap shares rose 0.3 percent in after-hours trade to US$38.30.