Gap Inc. to Bring First Gap Store to South America
SAN FRANCISCO --(BUSINESS WIRE)-- Continuing its global expansion, Gap Inc. (NYSE:GPS) today announced a franchise agreement to introduce Gap brand in South America. The first Gap store is expected to open in Santiago, Chile in the Parque Arauco mall in September 2011. With today's announcement, Gap Inc. now has franchise agreements in place for a total of 25 countries on six continents.
Gap Inc. has signed a franchise agreement with Komax, for exclusive rights to operate Gap brand stores in Chile. Komax will purchase merchandise from Gap and must adhere to the company's quality standards.
"We are looking forward to offering Gap's modern, cool American designs to customers in a retail sector that is strong, and has an exceptional demand for fashion," said Stephen Sunnucks, President, Gap Inc., Europe and Strategic Alliances. "Komax has impressed us with their local expertise in the market and proven track record of launching international brands to customers in Chile."
The franchise business is a key part of Gap Inc.'s global business strategy. At the end of the third quarter of fiscal year 2010, the company had 165 franchise stores in 23 countries throughout Asia, Eastern Europe, Latin America, the Middle East and Australia. By 2015, the company plans to grow its number of franchise stores to 400.
Gap Inc. will continue to enter new markets through company-owned and online channels. Gap Inc. recently opened its first wholly owned stores in China and later this month it will open its first store in Italy. As of today, Gap Inc. is able to sell products to customers in more than 80 countries, up from 25 at the start of the fiscal year. This includes China and Italy, two of the top ten apparel markets in the world.
The company projects that by fiscal 2013, international and online sales will account for more than a quarter of its total net sales.
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, without limitation, statements regarding; (i) franchise store openings in Chile; (ii) international business strategy and growth; (iii) number of franchise stores by 2015; (iv) store openings in Italy; and (v) international and online sales by fiscal 2013.
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 our franchisee will be unable to successfully open, operate and grow the Gap branded apparel and accessories stores planned for Chile; the risk that the company will be unsuccessful in gauging fashion trends and changing consumer preferences; the risk that changes in general economic conditions, or consumer spending patterns will have a negative impact on the company's financial performance or strategies; the highly competitive nature of the company's business internationally and its dependence on consumer spending patterns, which are influenced by numerous other factors; the risk that the company will be unsuccessful in identifying and negotiating new store locations and renewing or modifying leases for existing store locations effectively; the risk that the company will be unsuccessful in implementing its strategic, operating and people initiatives; the risk that adverse changes in the company's credit ratings may have a negative impact on its financing costs, structure and access to capital in future periods; the risk that changes to the company's IT systems may disrupt its operations; the risk that trade matters, events causing disruptions in product shipments from China and other foreign countries, or an inability to secure sufficient manufacturing capacity may disrupt the company's supply chain or operations; 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 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 the company's reputation or operations; and the risk that the company will not be successful in defending various proceedings, lawsuits, disputes, claims, and audits; any of which could impact net sales, expenses, and/or planned strategies. 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 30, 2010. Readers should also consult the company's quarterly report on Form 10-Q for the fiscal quarter ended July 31, 2010.
These forward-looking statements are based on information as of November 17, 2010. 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 2009 sales were $14.2 billion. Gap Inc. operates about 3,100 stores in the United States, Canada, the United Kingdom, France, Ireland, Italy, Japan and China. In addition, Gap Inc. is expanding its global presence through franchise agreements in Asia, Australia, Europe, Latin America, and the Middle East. For more information, please visit www.gapinc.com.