Gap in Aggressive China Expansion

   Date:2012-01-19

GAP Inc, America's biggest apparel retailer, is set to accelerate its roll-out of new stores in China this year as part of its global expansion strategy.

The San Fransisco-based clothing and accessories retailer unveiled two new stores on Nanjing Road E. and Huashan Road in Shanghai today, bringing the total number of its self-branded shops in China to 14 from four in 2010.

Aina Konold, the chief financial officer and vice president of Gap's business in China, said this number is expected to soar to 45 in its 2012 fiscal year ending in January 2013 as China has become one of Gap's most important market worldwide.

To achieve this goal, Gap will further penetrate the five major Chinese cities - Beijing, Shanghai, Hong Kong, Tianjin, and Hangzhou - where it already has a presence, and break into a few new ones with great consumption potential.

The performance of Gap's current stores has proved that the brand has a certain appeal with Chinese consumers, Konold added. Its flagship store in Hong Kong posted global record sales during its opening last year while the stores in Shanghai and Beijing were among the top 10 percent of best-performing ones.

But as retailers in China find it increasingly harder to nail down a good property lease contract, Konold emphasized that Gap is proactive with its expansion, whose planning is based on a thorough analysis of financial return.

She didn't rule out the scenario of Gap introducing more brands, such as Banana Republic, to China in the future.

Shanghai remains Gap's biggest market in the nation, where it operates seven stores.

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