Gap Inc, the biggest US apparel chain, expects the share of revenue from online and overseas sales to rise by half in about two years, as it expands in countries, including China, to reduce reliance on its home market.
“China is probably the cornerstone of our expansion,” Redmond Yeung (楊得銘), president of China operations, said in an interview in Hong Kong yesterday.
Overseas stores and Gap’s online business will account for 30 percent of total sales by the 12 months ending Jan. 31, 2014, rising from 20 percent last fiscal year, he said.
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Gap is seeking to tap rising Chinese affluence as consumer confidence in the US stagnates around recession levels.
Consumers in China, the world’s most populous nation, will spend more on clothes as the number of households with at least 74,000 yuan (US$11,600) in annual income surges to 140 million by 2020 from 50 million last year, Boston Consulting Group said in July.
China “is where retail sales are growing fast,” Yeung said.
“This is the right time to capture the growing affluence of China’s middle class,” he said.
Gap sells clothing under its namesake and the Banana Republic and Old Navy labels.
The San Francisco-based company currently only offers apparel under the Gap label in Greater China, a region that typically includes China, Hong Kong and Taiwan.
Gap opened its first store in Hong Kong yesterday and plans to increase the number of outlets in Greater China fivefold to 45 by January 2013 from the current nine.
Stores in the cities of Hangzhou and Tianjin would open in the coming weeks, adding to those in Beijing and Shanghai, it said.
“Gap is not cheap, but Chinese consumers are having a greater appetite to spend,” Yeung said.
“We want to first introduce our iconic Gap brand to Chinese consumers and build on that,” he added.
Gap plans to open the first Old Navy outlet in Asia next year in Japan, Yeung said.
The company, whose competitors include Ponzano, Italy-based Benetton Group SpA and Hennes & Mauritz AB of Stockholm, already has 150 Gap and Banana Republic stores in Japan, the world’s third-biggest economy.
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