Gap Merges International Divisions, Plans Old Navy Growth
Gap Inc. is preparing to expand its global position.
The San Francisco–based retail giant— operator of Gap, Banana Republic, Old Navy and Athleta stores, as well as footwear e-tailer Piperlime—will merge its four international divisions into one central unit based in London.
Billed as an effort to leverage resources and capitalize on the global market, the move will consolidate company-run and franchise stores across Europe, the Middle East, North Africa, Asia Pacific and South America into one division, overseen by retail veteran Stephen Sunnucks, who has been named president, international, for Gap Inc.
During Sunnucks’ five-year tenure at Gap Inc., he helped the company expand its franchise operations and helped grow the Gap and Banana Republic business in Europe.
In his new position, he will lead the company’s brands outside of North America. Currently, the company operates 530 stores in 30 countries outside of North America.
“As we’ve expanded into new countries and introduced additional brands from our portfolio, our distinctively American aesthetic has resonated very well, everywhere from Milan to Shanghai to Sydney,” Sunnucks said. “We have the flexibility to adapt our formats for each market so that we can gain a larger share of the $1.4 trillion global apparel retail market.”
Gap Inc. also expanded the responsibilities of John Ermatinger, president of Gap Inc.’s Asia Pacific region, to include establishing Old Navy International. Under Ermatinger’s supervision, Gap will open Old Navy stores in Japan by the end of 2012. Last year, the company began shipping its products to more than 90 countries. Old Navy is the top-performing Gap brand in 50 of those 90 countries, according to the company.
“The Old Navy brand is well-known globally for offering customers value, fashion and a fun shopping experience for the entire family,” said Glenn Murphy, chairman and chief executive officer of Gap Inc. “We now have the international infrastructure in place to launch Old Navy in a cost-effective manner in new markets through our range of channels.”
Earlier this year, Gap Inc. opened the Gap Global Creative Center in New York for the purpose of “improving performance and executing one global design vision for the Gap brand around the world,” the company said.
The company is laying the groundwork to bolster its international and online business in the next few years. By 2013, Gap’s international and online share of revenue is expected to increase by 30 percent. Since 2006, the company’s international outreach has expanded from selling its products in eight countries and online to U.S. customers only to selling its products in 32 countries and selling online to customers in 90 countries.
At the end of last year, Gap also opened its first Gap and Banana Republic flagship stores in Italy and its first Gap Stores and e-commerce site in China. Retail expansion plans for 2011 include opening 190 stores across the world, including 10 in China and 10 in Italy. The company also plans to double its franchise stores to 400 over the next four years. —Alison A. Nieder
