RETAIL
Gap Stores Headed for Expansion in India
Gap Inc. plans to tap into the purchasing power of 1.2 billion people in India with the debut of 40 franchised stores that will open next year.
The San Francisco mega-retailer said it is working with Arvind Lifestyle Brand Ltd., a subsidiary of Arvind Ltd., to open stores in the second most populated country in the world, after China.
The first stores are expected to open in the country’s two largest cities—Mumbai and Delhi—starting with Gap’s Summer 2015 collection for adults, kids and babies.
“India is an emerging, vibrant market and an important next step in our global expansion strategy,” said Steve Sunnucks, global president of Gap.
The company points out that half of India’s population is under the age of 25 and eager to embrace fashion.
India is one of the top 10 sourcing locations for Gap where the company has been producing garments for decades.
Since launching its first franchise-operated store in 2006, Gap has quickly expanded to have 400 franchise-operated stores along with approximately 3,200 company-owned stores. The Gap brand is now in 50 countries.
Meanwhile, Gap Inc. released its second-quarter earnings report for the period ending Aug. 2. Net sales for the second quarter increased 3 percent to $3.98 billion compared with $3.87 billion for the same period last year. Total online sales increased 11 percent to $515 million for the second quarter of 2014 compared with $466 million last year.
Net income for the second quarter rose 9.5 percent to $332 million compared with $303 million for the year-ago quarter.
Same-store sales for all its various nameplates were basically flat for the quarter compared with a 5 percent increase last year.
The company ended the second quarter of fiscal year 2014 with 3,594 store locations in 48 countries, of which 3,200 were company-operated.
During the second quarter, the company opened 47 outposts and closed 26 company-operated stores. Square footage of company-operated stores was up 1.6 percent compared with the second quarter of fiscal year 2013.
In 2014, Gap expects to open about 185 company-operated stores. The retailer opened five new stores in China during this recent quarter. The company is on track to end the year with approximately 110 stores in China, Hong Kong and Taiwan.
In addition, the company plans to close about 70 company-operated stores, which are weighted toward Gap North America. Given its focus on growing through new channels and geographies, the company continues to expect square footage to increase about 2.5 percent in 2014.
