Gap Inc. Expands in Latin America with First Stores in Chile
Gap and Banana Republic To Open In Panama and Colombia in 2012
SAN FRANCISCO--(BUSINESS WIRE)--Continuing with its international growth strategy, Gap Inc. (NYSE: GPS) today announced its further expansion in Latin America. Leveraging its franchise model, the company plans to open its first stores in South America in Chile this month as well as introduce Gap and Banana Republic stores to Panama and Colombia in 2012.
“We believe substantial opportunity exists in Latin America and our first stores in Chile, Panama and Colombia will allow us to establish a foundation for further growth in this region.”
“We are thrilled to be opening our first stores in South America. Taking our brands to another continent reflects the success and flexibility of our franchise model, which allows us to quickly expand our reach to customers around the world,” said Stephen Sunnucks, President, International, Gap Inc. “We believe substantial opportunity exists in Latin America and our first stores in Chile, Panama and Colombia will allow us to establish a foundation for further growth in this region.”
Gap Inc. first made its products available to consumers in Chile, Panama and Colombia last year through its international online shipping provider. Stores in these countries 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, expanded to 29 countries throughout Asia, Europe, Latin America, the Middle East, Australia and Africa and currently has franchise agreements in place to bring its brands to 33 countries on 6 continents. In fiscal year 2011 alone, Gap Inc. plans to open franchise locations in about 10 new countries and 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.
Under Gap Inc.’s existing franchise agreement with Komax, the first Gap store in Chile will open in Santiago on October 14 in the Parque Arauco Mall. A second Gap store will open in the country in Concepcion at the Plaza Trebol Shopping Center in November. “Chile is a great match for Gap brand’s aesthetic and target customer. With a nearly $6 billion apparel & footwear market, a retail sector that makes up 9.4% of the country’s GDP, and a proven customer base interested in American style and brands, Chile represents a natural extension for our brands,” said Stefan Laban, managing director of strategic alliances for Gap Inc.
Gap Inc. has signed a new agreement with Superior Retail Inc. to bring Gap and Banana Republic to Panama. The company plans to open the first stores in Panama City, the country’s capital, in January 2012. Panama’s economy is among the fastest growing and best managed in Latin America. With a high rate of tourism and a rapidly growing demand for international retail brands, Panama provides an ideal environment in which to introduce Gap Inc.’s brands.
As part of the new agreement with Superior Retail Inc., the first Gap and Banana Republic stores in Colombia are expected to open in the capital city of Bogota in late 2012. Colombia has the second largest population in South America (46 million people) and has one of the highest rates of economic growth in Latin America. These characteristics, combined with a high level of brand awareness for Gap and Banana Republic, provides an excellent platform to bring both brands to the market.
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 and timing, including in Chile, Colombia and Panama;
- Global expansion strategies, including franchise growth;
- Substantial opportunity in Latin America and further growth in the region;
- 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 financial performance or 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 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 January 29, 2011, as well as the company’s subsequent Quarterly Reports on Form 10-Q.
These forward-looking statements are based on information as of October 12, 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.
Gap Inc. Media Relations
Catherine Rhoades, 415-427-2807