Gap guns for international and online sales

At an investor meeting in the US yesterday, Gap said it will sell to more than 80 countries by the end of this year, up from 25 at the start of the year. By the end of this year it will also open stores and offer online shopping in China and Italy, which it said are two of the top ten apparel markets in the world.

Gap Inc chairman and chief executive Glenn Murphy said: “While never losing sight of our goal to gain market share in our North American businesses, our strong portfolio of brands combined with several powerful platforms such as outlet, online and franchise give us significant global runway. We’re making the investments necessary to shift the balance of revenue over time to come increasingly from our online and international businesses.”

Gap Europe and international strategic alliances president Stephen Sunnucks said in the last five years the company has doubled its store base of European company-owned stores and franchise stores from 165 to 335, and expanded from two to 24 countries.

He said the business had made mistakes in the past and took a three-phased approach to stabilise the business, turn it around, and go for growth. “We are now in the third phase” he said.

He explained previous problems had included customers said their products had become “less relevant in fashionability”, but they still liked the quality and the in-store environment and windows had become “predictable”.

He said: “We set about fixing these problems with local teams and local expertise.” Product is now picked from the main collection by local buyers.

Another problem was that Gap was entering secondary locations with stores that were too big to sustain, so he said: “We closed underperforming stores” and added: “To be successful you need brand building affluent stores in big cosmopolitan cities. Once you have brand awareness you can build out across the country, then online.”

Further Banana Republic stores will open in the UK, he said.