Old Navy Opens First Store in Mainland China

SAN FRANCISCO – February 27, 2014 – Gap Inc. (NYSE: GPS) today announced Old Navy’s opening of the brand’s first store in China, continuing its expansion outside the U.S.

With the debut of Old Navy’s first company-operated store, opening March 1 on Shanghai’s famous Nanjing West Road, the company plans to build on Gap brand’s three-year run of successful growth in the world’s second largest apparel market. A dedicated Old Navy e-commerce site will also be available simultaneous to the store opening, allowing customers across mainland China to shop the brand’s offerings for the entire family.

“At Old Navy, we’re about making current American fashion essentials accessible for every family,” said Stefan Larsson, global brand president, Old Navy. “As we enter our 20^th year, we’re excited to introduce our brand to more customers around the world and share our fun, energizing and unique shopping environment.”

The 22,000 square foot (2,000 square meters), three-level Shanghai store is located in the Jing’an District, a major commercial area known for shopping, sightseeing, hotels and office buildings that draws thousands of locals and overseas visitors. The store features iconic elements from Old Navy’s U.S. flagship stores such as the famous “Super Modelquins” and Magic the Dog, as well as interactive features that will make shopping fun for the entire family, such as touchscreen video games and game tables.

“We plan to open a total of five stores in China in fiscal 2014, starting with the Shanghai store,” said Robert Frank, Old Navy’s executive vice president of international.  “With our China entry, continued growth in Canada and Japan and the launch of our franchise business in the Philippines next month, we are well positioned to grow our share of the global retail apparel market.”

The entry into the Chinese market follows Old Navy’s successful launch in Japan in 2012. Old Navy plans to open about 25 additional stores this year in Japan, bringing the total number of stores in the country to approximately 43 by the end of 2014.

Launched in 1994, Old Navy brings fun, fashion and value to the whole family. Customers quickly connected with the brand, as Old Navy became the first retailer to reach $1 billion in annual sales in less than four years of operation. Old Navy operates more than 1,000 stores in the U.S., Canada and Japan and has an ecommerce presence that serves customers in nearly 80 countries around the world.

About Gap Inc.

Gap Inc. is a leading global retailer offering clothing, accessories, and personal care products for men, women, children, and babies under the Gap, Banana Republic, Old Navy, Piperlime, Athleta, and Intermix brands. Fiscal year 2013 net sales were $16.1 billion. Gap Inc. products are available for purchase in more than 90 countries worldwide through about 3,100 company-operated stores, over 350 franchise stores, and e-commerce sites. For more information, please visit www.gapinc.com.

Forward Looking Statements

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:

• Old Navy store openings in China in fiscal 2014;
• Launch of the Old Navy franchise business in the Philippines;
• Old Navy store openings in Japan in fiscal 2014; and
• Total number of Old Navy stores in Japan at the end of fiscal 2014.

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 could adversely impact the company’s results of operations;
• the highly competitive nature of the company’s business internationally;
• the risk that the company will be unsuccessful in gauging apparel trends and changing consumer preferences;
• the risk that the company will be unsuccessful in identifying, negotiating, and securing new store locations and renewing, modifying or terminating leases for existing store locations effectively;
• the risk that natural disasters, public health crises, political crises, or other catastrophic events could adversely affect the company’s operations and financial results;
• 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, strategies, 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 February 2, 2013, as well as the company’s subsequent filings with the Securities and Exchange Commission.

These forward-looking statements are based on information as of February 27, 2014. 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.

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