With about 3,100 company-operated stores and about 200 franchise stores in 36 countries and online orders shipped to over 90 countries, the company reaffirmed its goal of growing total sales outside of North America and online to about 30 percent by the end of fiscal 2013.
The company will close about one third of it's North American Gap stores but it plans to bring the first store expression of its value brand, Old Navy, outside of North America, to Japan within the next 18 months, and plans to nearly triple the number of Gap stores in greater China from roughly 15 at the end of this year to about 45 by the end of 2012.
The first Gap flagship in Hong Kong is set to open in a matter of weeks on Queen’s Road, as is the company’s first Banana Republic flagship in Paris later this year. The company’s athletic apparel brand, Athleta, is also on target to open over 50 stores by the end of 2013.
“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, chairman and cEO of Gap Inc, at the GAP annual investor meeting.
“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.”
Financial outlook and strong long-term strategy
Gap CFO Sabrina Simmons stated: Moving beyond 2011, the company remains focused on growing revenue, operating margin and earnings while returning excess cash to shareholders. The company has an overall goal of low single digit revenue growth on its approximately $15 billion revenue base.
In North America, sales are expected to grow modestly on its smaller, healthier specialty store fleet supplemented by 3 sales growth in its online and outlet channels. Internationally, the company plans to complement specialty store growth with the higher returning online, outlet and franchise channels. Regarding margins, the company intends, over time, to return to the operating margin levels achieved in 2010.