Gap Bought Intermix for $130 Million (and Probably Won't Stop There)

Gap kicked off the new year with a new luxury retailer in its portfolio.
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Dhani Mau
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Gap kicked off the new year with a new luxury retailer in its portfolio.
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Gap kicked off the new year with a new luxury retailer in its portfolio.

In a deal that was finalized December 31, Gap acquired New York-based specialty chain Intermix for a cool $130 million in cash, WWD is reporting.

The acquisition follows recent reports that the two retailers were working together on something. It was a partnership we didn't necessarily see coming--but one from which both parties could definitely benefit, and plans for growth are already underway.

Intermix co-founder Khajak Keledjian told WWD Intermix has “found a partner that has the global scale and infrastructure required to support our vision for growth" and that partnering with Gap "will let us focus more on product, merchandising and innovation.”

So what changes can we expect to come out of this deal?

For Intermix, the focus seems to be on expanding both in the U.S. and overseas and growing its online presence. This year, it plans to open stores in Brooklyn, San Francisco, and Montecito. Art Peck, president of Gap’s Growth, Innovation & Digital division, pointed out that while Intermix is not as recognized internationally, the store is popular among tourists and it does ship overseas.

Also interesting: Intermix's online growth will be dependent on opening brick and mortar stores as well. In Gap's new e-commerce model, the online store and brick-and-mortar stores are more connected, ultimately making it so that you can find something online and reserve it in a store.

In the longer term, Intermix's plans to launch menswear and introduce its own private label will likely take shape.

For Gap, the mega-retailer now has a strong business with a lot of growth potential under its belt. Plus, the deal is an indication of what's to come now that the brand is finally starting to turn itself around. "We have our radar up to see if there are potentially significant opportunities out there,” Peck said, adding that Gap's “eyes are open on a global business. The acquisition doesn’t have to be a U.S. brand.” Hmmm...