Gap Inc. (GPS), as part of its expansion project in the $1.4 trillion global apparel market, has taken a step forward to introduce its brand in Serbia and Ukraine. It plans to launch the Gap brand in these Eastern European nations through contracts with existing franchises.
Gap, GapKids and babyGap are expected to unveil the latest trend in the cities of Belgrade and Kiev in fiscal 2011.
In collaboration with Marinopoulos Group, which is one of the foremost retail, commercial and industrial firms in Serbia, Gap expects to introduce its first store in Belgrade shortly this year. Belgrade, which is centrally located in Southeast Europe, is blessed with all modern amenities that will provide the company a strong platform of growth.
In Ukraine, the company expects to open its 836 square meter long space store on Kreschatik Street in the city of Kiev in June. Ukraine is the fifth largest retail market in Eastern Europe, an advantage that the company would like to cash in on in its efforts to spur growth. Gap through its international shipping provider had first made its products available online to Ukrainian customers last year.
The leading global specialty retailer has lately consolidated its foreign business under one division from London. The rationalized division, which is headed by Stephen Sunnucks, is responsible for all company-operated and franchised stores across Europe, the Middle East, North Africa, Asia Pacific and South America.
Gap currently operates with 530 stores in 28 countries outside of North America, and has expanded itsfranchise store base to about 180. The company expects to increase its franchised store base to 400 by 2015.
In keeping with its global expansion strategy, Gap also plans to open its first Old Navy store in Japan by the end of 2012. In 1995 Japan got the first Gap namesake store while the first Banana Republic store was opened in 2005. Gap at present operates 150 stores, or almost all of its Asian stores, in Japan.
Gap’s recent expansion into China and Australia is expected to further strengthen its top and bottom line performance, moving forward. The company’s China stores feature the full range of Gap adult, GapKids and babyGap merchandise. In Australia, Gap will offer its brands through a franchisee.
Based in San Francisco, California, The Gap Inc. is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products for men, women, children and babies. Its flagship brands include Gap, Banana Republic, Old Navy, Piperlime and Athleta.
However, Gap operates in a highly fragmented market and competes with well-established rivals like American Eagle Outfitters Inc. (AEO) and The TJX Companies Inc. (TJX).
Gap’s shares maintain a Zacks #3 Rank, which translates into a short-term Hold rating. Our long-term recommendation on the stock remains Neutral.
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