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Gap in Paris

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San Francisco, California-based premier international specialty retailer, Gap Inc. (GPS - Free Report) , intends to further expand its global footprint by opening its first ever Banana Republic store in Paris.

The store is scheduled to be open in early December 2011 at one of the most popular international shopping destination in the world Avenue des Champs Elysees. The 1,482 square meters (15,952 square feet) store will be designed with unique architecture and rich materials inspired by the heritage of France and will offer the best city styles that appears in the company's other stores in all hub cities.

The store will include Banana Republic's unique approach to customer service. The store will consist of trained stylists from whom customers can obtain free styling advice. Customers can also book stylist personnel in person or over phone as per their styling needs.

Banana Republic stores consists of lifestyle collections at approachable prices and includes ready-to-wear collections for men and women, apparel, handbags, jewelry, fragrance and eyewear. Banana Republic is a division of Gap Inc. and has over 600 stores in the United States, United Kingdom, Canada, Italy and Japan.

Prior Story

Gap has made a franchise agreement with one of the largest conglomerates in Vietnam, Imex Pan Pacific (IPP), to open its first two Gap stores in Vietnam's largest city, Ho Chi Minh City in October 2011, followed by other locations in Hanoi in 2012. The company intends to open its first Banana Republic store in the later part of 2012.

The country's demography also supports the company's expansion plan as 90% of its 86 million populations are under the age of 65. In addition, rapid growth of middle class consumer base coupled with strong demand for international brands are also expected to boost its growth.

Gap will also open its first two Gap stores in Guam under its existing franchise agreement with Casual Clothing Specialist Inc. (CCSI) in January 2012. CCSI is a leading retail and commercial firm in Philippines, managing the company's Gap and Banana Republic franchise. Guam's economy is mostly supported by tourism as it is very near to Japan, Korea, China, Hong Kong, the Philippines and Australia, which provides a congenial environment to open retail stores.

Gap intends to increase its market share in the $1.4 trillion global apparel market and hence is focusing on enhancing its franchise store base counts. The company has increased its franchise store count to about 200 across 26 countries over the last 5 years. Moreover, with this announcement, the company's presence has expanded in 32 countries. Further, Gap wants to increase its franchise store base counts to about 400 by 2014.

Gap is a premier international specialty retailer offering a diverse range of clothing, accessories, and personal care products for men, women, children and babies. Its flagship brands include Gap, Banana Republic, Old Navy, Piperlime and Athleta.

Further, in a drive to boost international operations, Gap consolidated its foreign business under one umbrella while operating from London. Lackluster sales in North America compelled the company to explore business in other shores. In order to counter the domestic market saturation, Gap is aiming to generate 30% of total sales from its overseas operations and online business by 2013.

Gap competes with national and local department stores and discount stores, such as American Eagle Outfitters Inc. (AEO - Free Report) and The TJX Companies Inc. (TJX - Free Report) . Currently, the company maintains a Zacks #3 Rank, which translates into a short-term Hold rating. Our long-term recommendation on the stock remains Neutral.

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