Gap to triple stores in China by end-2012

Gap Inc., whose portfolio of brands includes Gap, Banana Republic and Old Navy, outlined a strategy to increase total sales to counter lackluster demand in North America.

In China, where Gap opened its first store in November 2010, the company said it would expand from about 15 stores at the end of this year to about 45 by the end of fiscal 2012, in late January 2013.

The first Gap flagship store in Hong Kong is set to open in a matter of weeks, the company noted.

Gap also said it would open its first Old Navy store, its lower-priced brand, outside of North America, in Japan within the next 18 months.

The company's first Banana Republic flagship in Paris is slated to open later this year.

The San Francisco-based company reaffirmed its target of increasing sales growth outside of North America and online by about 30 per cent by the end of its 2013 fiscal year.

"The combination of our global strategy and formidable growth platform puts us in a strong position to expand our reach into the top 10 apparel markets worldwide," said Glenn Murphy, Gap chairman and chief executive, in the statement.

"In North America, we're taking a number of steps to improve sales in the near term, and I'm confident that with a strong management team in place, we're well positioned for sustained growth across the business."

The company said it would reduce overall store square footage in North America by 10 per cent by 2012, compared with 2007 levels.

And it is focusing on Gap stores, planning to shrink their number to 700, a decline of 34 per cent from end-2007.

Gap has about 3,100 company-operated stores and about 200 franchise stores in 36 countries and online orders shipped to over 90 countries.

Retail sales outside North America increased 16 per cent in the first half of the year, while revenue from e-commerce business increased 19 per cent across its entire portfolio, the company said.

A week ago Gap reported September net sales were flat compared with last year.