Gap Is Heading to India With 40 Stores

E-commerce is also now making up 13 percent of the company's sales, higher than the U.S. average.
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Lauren Indvik
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E-commerce is also now making up 13 percent of the company's sales, higher than the U.S. average.
Pieces from Gap's summer 2014 collection. Photo: Gap

Pieces from Gap's summer 2014 collection. Photo: Gap

Gap is not taking its lackluster sales performance lying down: The company announced that its flagship brand, which saw sales decrease another 5 percent in the second fiscal quarter of the year, is heading into India for the first time, through a licensed partner. And it's not just dipping its toe in -- the retailer is planning to open 40 stores in the world's second most populated country, starting next year.

India has been a notable target for mass market brands in recent years: Zara has been in India since 2010, and H&M opened its first store there this year.

In addition to India, Gap is also continuing to grow its presence in Asia, adding five new stores in greater China in the past three months. The brand now has around 110 stores across China, Hong Kong and Taiwan, and 235 in Asia altogether. (By comparison, Gap has 966 stores in the North America and 190 in Europe.) Asia currently accounts for 9 percent of the company's total sales.

While Gap's flagship brand didn't perform great, the company -- which also owns Old Navy, Banana Republic and Athleta -- had a solid quarter, with net sales up 3 percent to $3.98 billion. E-commerce sales across those brands increased 11 percent to $515 million, meaning e-commerce is now making up around 13 percent of sales, higher than the national average.

Shares were trading up around 5 percent early Friday morning.