The casual clothing purveyor of choice for yummy mummies and off-duty yuppies

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.