Progressing with its global expansion plan,
), the premier international specialty retailer recently
announced the opening of franchise and standalone stores in
Paraguay, Hungary and Mexico. Apart from this, the company is
planning to extend its international operations to 8 Latin
American countries, including, Chile, Panama, Colombia, Mexico,
Uruguay, Paraguay, Peru and Brazil.
In order to penetrate deeper into the $1.4 trillion global
apparel retail market, Gap entered into agreements with its
existing franchise partners in Paraguay and Hungary to open its
first flagship store. According to the agreement with its partner
Neutral, the company will open its first franchise Gap store in
Paraguay by the end of 2013. In Hungary, Gap has signed a deal
with Gottex Brands to open 2 franchises Gap stores.
Furthermore, this Zacks Rank #2 (Buy) stock entered into an
agreement with its existing partner Distribuidora Liverpool, S.A.
DE C.V. to open a stand-alone Banana Republic store in Mexico.
Earlier, the company was offering its Banana Republic merchandise
under a "shop-within-shop" franchise concept at the Liverpool
Gap, which competes with
Abercrombie & Fitch Co.
American Eagle Outfitters, Inc.
), has been marching ahead with its long-term plans by reducing
its dependency on the North American specialty business, while
increasing its online presence and expanding international
operations. Moreover, Gap aims to generate 30% of its total sales
from overseas operations and online business by 2013 versus 27%
in fiscal 2012.
Gap, which witnessed a phase of declining comparable-store
sales and reduced profitability, is now gradually treading the
growth path, based on turnaround strategies as is evident from
its solid comps and sales performance in fiscal 2013 so far.
We believe that the company's long-term strategic moves and
its cost management measures have not only given it financial
flexibility, but helped reduce operating expenses as well.
Moreover, Gap's globally recognized brands complement one
another, enabling the company to leverage its position in the
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