In an effort to grow its worldwide reach through strategic international expansion plans, leading U.S. fashion retailer, Gap Inc. ( GPS ), recently announced the opening of its first individual store in Mexico. This store, offering Gap, GapKids and babyGap assortments, will be opened in the newly designed Interlomas Mall, just outside the Mexico City, covering an area of 10,000 square foot.
Earlier, Gap offered its merchandise throughout Mexico in Liverpool Department stores, which is one of the company's franchise stores. The new stand-alone store opening reflects the company's brand recognition and awareness within the consumers of Mexico.
Management believes that the new store will fetch great opportunities in the Mexican market and beyond. Moreover, seeing the encouraging response in Mexico through Liverpool Department stores, Gap is concentrating on offering American way of styling to the customers internationally.
Previously, the clothing retailer has experienced successful debut of its stores in Central and South America, which encouraged Gap to expand in Mexico. This reflects the company's continuous endeavor to expand globally. Further, Gap is planning to open new stores in the Latin American region this year.
By the end of 2012, Gap will open a new store in Bogota and Medellin, Columbia under an agreement with its retail partner Superior International. Earlier in this year, Gap had already opened a store with Superior International in Panama.
Recently, Gap signed a new deal with Neutral Duty Free, in order to open its first store in Uruguay by the end of 2012. Management believes that Latin America is one of the strongest emerging retail markets worldwide and has solid brand recognition for Gap and Banana Republic brands of the company.
On the back of the successful launch of Gap and Banana Republic in Chile and Panama, management is confident about achieving favorable opportunities in Uruguay market along with other countries as well.
Gap offered its products online in 2010 in Panama, Colombia, Uruguay, Chile, and Peru as well as in several other Latin American countries through its international shipping provider.
Founded in 1969 and headquartered in San Francisco, Gap is a leading retailer that operates under Gap, Banana Republic, Old Navy, Piperlime and Athleta brands. The offerings of the company's core brands include clothing, accessories as well as personal care products for men, women and kids. Gap operates in 90 countries through a pipeline of 3,000 company-operated stores, 250 franchise stores and e-commerce sites. Gap's net revenue was $14.5 billion in the fiscal 2011.
Gap, which competes with Abercrombie & Fitch Co. ( ANF ) and American Eagle Outfitters Inc. ( AEO ), carries a Zacks #1 Rank, translating into short-term Strong Buy rating for the next 1-3 months. However, we still retain our long-term 'Neutral' recommendation on the stock.