Gap takes steps to improve North American business
14 Oct '11
3 min read
Gap Inc. provided a comprehensive business update, detailing its plans to build upon the momentum of its growth strategy, and addressed product and marketing changes underway in its North America business.
With about 3,100 company-operated stores and about 200 franchise stores in 36 countries and online orders shipped to over 90 countries, the company reaffirmed its goal of growing total sales outside of North America and online to about 30 percent by the end of fiscal 2013. At today's event, leaders shared that retail sales outside North America increased 16 percent in the first half of the year, while revenue from its e-commerce business during this period increased 19 percent across its entire portfolio.
The company plans to bring the first store expression of its value brand, Old Navy, outside of North America, to Japan within the next 18 months, and plans to nearly triple the number of Gap stores in greater China from roughly 15 at the end of this year to about 45 by the end of 2012.
The first Gap flagship in Hong Kong is set to open in a matter of weeks on Queen's Road, as is the company's first Banana Republic flagship in Paris later this year. The company's athletic apparel brand, Athleta, is also on target to open over 50 stores by the end of 2013.
“The combination of our global strategy and formidable growth platform puts us in a strong position to expand our reach into the top 10 apparel markets worldwide,” said Glenn Murphy, chairman and chief executive officer of Gap Inc. “In North America, we're taking a number of steps to improve sales in the near-term, and I'm confident that with a strong management team in place, we're well positioned for sustained growth across the business.”
Speaking at its Gap Global Creative Center in New York City, brand presidents and merchants presented their plans to grow sales, such as: Gap brand, led by Art Peck, is making immediate adjustments across the business and testing provocative ideas, especially around product, store experience and marketing; Old Navy, led by Tom Wyatt, is building upon its improved performance from 2006 to 2010 through a new store model and overhauled marketing campaign in November that will reflect the brand's sense of fun, fashion, family and value; and Banana Republic, led by Jack Calhoun, is making product adjustments to its women's assortment to build off the momentum in its successful menswear division, and is focusing on innovative product partnerships given the recent success with Mad Men.
“Our brand leaders and their merchants are intent on delivering consistently great product for our target customers,” Murphy added.
The company also outlined progress related to its growth, core business performance, and financial health, as summarized below:
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