GAP's Growth Plan for 2010
Gap Inc.’s e-commerce business and its international retail are due for a growth spurt, said Glenn Murphy, chairman and chief executive of the San Francisco–based retail giant, during an Oct. 15 conference call with investors. He also noted that Gap will be whittling down its real estate holdings of more than 3,100 stores across the globe; 2,162 of those stores are located in the United States.
During the call, Murphy outlined the $14.5 billion retailer’s 2010 strategy to recapture its market share and increase its profits. Murphy was hired in July 2007 to revive Gap’s fortunes, and its profile will be rising during the upcoming holiday sales season.
For the first time in two years, it produced TV advertisements to attract shoppers to the stores in its namesake division, The Gap. The ads will begin screening on Nov. 12. Other Gap divisions include Banana Republic; Old Navy; and its e-commerce division, Gap Inc. Direct.
For fall 2010, it will open its first Gap store in China. Its e-commerce division also looks forward to international expansion. During 2010, the retailer will debut its family of Web sites in Canada and the United Kingdom. Gap will build fulfillment centers and warehouse inventory in those countries to offer better service and to avoid customs issues and costs. Gap Inc. Direct sales grew from $595 million in 2005 to $1 billion in 2008.
Murphy also mentioned that the retailer had debuted a prototype Gap store in North Park Center in Dallas in September. The remodeled store will be a template for smaller Gap stores, said Sabrina Simmons, the retailer’s chief financial officer, who also spoke during the call. “We will reduce square footage while growing sales,” she said. Gap Inc. is scheduled to reduce its square footage 10 percent in the next five years.—Andrew Asch
