In line with its strategy of global expansion, The Gap, Inc. (GPS) recently announced its collaboration with leading European fashion eCommerce site, Zalando.
Per the partnership, Gap will introduce its online shop within Zalando, where the former will offer a wide array of items including accessories and clothing for Gap Women, Gap Men, GapKids and babyGap, beginning summer 2015.
Zalando is a popular fashion site in Europe with over 100 million visitors a month. Gap’s partnership with this well-known brand is most likely to enable it to attract European traffic, solidify its existing customer base by adding European shoppers and in turn grow its business.
Also, this deal will mark Gap’s entry into Europe’s multi-brand retailing, which in turn will bring together American and European casual styles and take Gap forward on the path of extending its online presence.
Gap had forayed into the European markets in 1987 when it launched its first company-operated global store in the U.K. Since then, it has been developing momentum as it continued to enhance its presence all over Europe with about 190 namesake stores and 33 franchise locations.
Gap’s focus on global expansion is also evident from its store update made with its third-quarter fiscal 2014 results where it stated that in fiscal 2014, it still intends to open 185 company-operated outlets, with primary focus on China, Old Navy in Japan, Athleta and global outlet stores. The company reiterated its target of a 2.5% rise in net square footage in fiscal 2014.
Moreover, in an attempt to attract early traffic and capitalize on the upcoming holiday season, Gap announced that more than 1,700 domestic stores will remain open on Thanksgiving Day. This strategic move will not only help customers to avail Gap’s Black Friday deals a day in advance, but it is also expected to boost the company’s sales.
Apart from Gap, many other retailers including Macy's, Inc. (M), Target Corp. (TGT) and Wal-Mart Stores Inc. (WMT) have announced early store openings on Thanksgiving as they need to be hawk-eyed to make the most of the holiday season.
Gap currently carries a Zacks Rank #4 (Sell) as the company’s third-quarter fiscal 2014 adjusted earnings of 74 cents a share missed the Zacks Consensus Estimate of 79 cents, though it improved 2.7% on a year-over-year basis. Also, net sales dipped marginally by 0.1% year over year to $3,972 million, coming way below the Zacks Consensus Estimate of $4,015 million. Sales were hurt by the negative impact of foreign currency translations.
Though management was not satisfied with its overall performance in the quarter, it remains hopeful about the upcoming holiday season.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment