Gap Inc. Expands in Asia Pacific with First Stores in Vietnam and Guam
SAN FRANCISCO – August 22, 2011 – Continuing with its global expansion strategy, Gap Inc. (NYSE: GPS) today announced plans to open its first stores in Vietnam and Guam through its franchise channel. In Vietnam, the first Gap stores will open this October followed by the first Banana Republic store in 2012. The first Gap store will open in Guam in 2012. The company first made its products available to consumers in this region last year through its international online shipping provider.
“These openings will mark yet another important step for the company as we accelerate our growth into international markets,” said Stefan Laban, managing director of strategic alliances for Gap Inc. “Vietnam’s rapidly growing economy and Guam’s well developed tourism industry both provide ample opportunity to introduce the Gap and Banana Republic brands to local consumers.” The stores will house products from Gap, GapKids and babyGap and Banana Republic’s affordable luxury apparel and accessories for men and women.
Gap Inc. is focused on growing its share of the $1.4 trillion global apparel market. Over the last five years, the company has grown its franchise store base to about 200 and expanded to 26 countries throughout Asia, Europe, Latin America, the Middle East, Australia and Africa. With today’s announcement, the company now has franchise agreements in place to bring its brands to 32 countries, including Chile, Serbia and Morocco in fiscal year 2011. The company expects to double its franchise stores to 400 by fiscal year 2014. More about Gap Inc.’s global runway can be downloaded from gapinc.com.
Gap Inc. has signed a new franchise agreement with Imex Pan Pacific (IPP), one of the largest conglomerates in Vietnam, to open its first Gap and Banana Republic stores in the country. The company will open its first two Gap stores in Ho Chi Minh City, the largest city in Vietnam, followed by additional locations in Hanoi in 2012. Banana Republic will make its debut in late 2012.
Vietnam provides a uniquely favorable environment in which to open Gap and Banana Republic stores. The country boasts a relatively young population, with more than 90 percent of its 86 million people under the age of 65, a rapidly growing upper middle class consumer base, and a strong demand for international retail brands.
As part of an existing franchise agreement with Casual Clothing Specialist, Inc. (CCSI), Gap Inc. will open its first two Gap stores in Guam in January 2012. Guam is the second country to be managed under the company’s agreement with CCSI Group, one of the leading retail and commercial firms in the Philippines. CCSI Group also manages the company’s franchise locations for Gap and Banana Republic in the Philippines.
Guam, a U.S. island territory in the western Pacific Ocean, is within a few hours flight to Japan, Korea, China, Hong Kong, the Philippines and Australia. As a result, Guam’s economy is mostly supported by a tourism industry that accommodates more than one million visitors annually, which encourages a strong retail environment to open Gap.
This press release contains forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements other than those that are purely historical are forward-looking statements. Words such as “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan,” “project,” and similar expressions also identify forward-looking statements. Forward-looking statements include statements regarding the following:
· Expected franchise store openings, including in Vietnam, Guam, Serbia, Chile, and Morocco;
· Global expansion strategies, including franchise growth;
· Gaining a larger share of the global apparel market;
· Number of future franchise stores.
Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause the company’s actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, the following:
· The risk that changes in general economic conditions or consumer spending patterns will have a negative impact on the company’s strategies;
· The highly competitive nature of the company’s business internationally;
· The risk that the company or its franchisees will be unsuccessful in gauging fashion trends and changing consumer preferences;
· The risk that the company’s efforts to expand internationally may not be successful and could impair the value of its brands;
· The risk that the company’s franchisees will be unable to successfully open, operate, and grow the company’s franchised stores;
· The risk that the company or its franchisees will be unsuccessful in identifying, negotiating, and securing new store locations effectively;
· The risk that the company will be unsuccessful in implementing its strategic, operating and people initiatives;
· The risk that changes in the company’s credit profile or deterioration in market conditions may limit its access to the capital markets;
· The risk that updates or changes to the company’s information technology (“IT”) systems may disrupt its operations;
· The risk that acts or omissions by the company’s third-party vendors, including a failure to comply with the company’s code of vendor conduct, could have a negative impact on its reputation or operations;
· The risk that the company will not be successful in defending various proceedings, lawsuits, disputes, claims, and audits; and
· The risk that changes in the regulatory or administrative landscape could adversely affect the company’s financial condition and results of operations.
Additional information regarding factors that could cause results to differ can be found in the company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2011, as well as the company’s most recent Quarterly Report on Form 10-Q.
These forward-looking statements are based on information as of August 22, 2011. The company assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.
About Gap Inc.
Gap Inc. is a leading global specialty retailer offering clothing, accessories, and personal care products for men, women, children, and babies under the Gap, Banana Republic, Old Navy, Piperlime, and Athleta brands. Fiscal year 2010 net sales were $14.7 billion. Gap Inc. products are available for purchase in over 90 countries worldwide through about 3,100 company-operated stores, about 200 franchise stores, and e-commerce sites. For more information, please visit www.gapinc.com.