American apparel retailer Gap, popular for its khakhi pants and smart denims, is making its Indian debut. The USD 16 billion revenue company has tied up with Arvind lifestyle brands, the subsidiary of Gujarat-based textile and apparel giant Arvind. The plan is to roll out stores from mid-2015 with a target of 40 stores.
American retailer Gap has decided to set up shop in India, a market it considers "important and vibrant". Despite 100 percent FDI being permitted in single brand retail, Gap has inked a franchise agreement with Arvind lifestyle to open 40-franchise operated stores to start with.
The first two Gap stores will open in May 2015 in Mumbai and New Delhi and about 15-20 stores will be rolled out in teir 1 & 2 cities.
Gap's India partner, Arvind is presently negotiating for anchor spaces in premium shopping malls.
Much like its overseas stores, Gap will go large format in India with each store measuring up to about 8000-10,000 square feet.
In a bid to differentiate itself from rivals like Zara, Gap intends to sharpen its focus on menswear even though the Indian market is dominated by women's wear. Therefore, 40 percent of Gap's product mix will be menswear.
Sanjay Lalbhai, Chairman and MD, Arvind says, “Store profitability will be from day 1. Gap will become most successful international brand in India.”
This optimism reflects in Arvind’s revenue target from the brand - which is Rs 1,000 crore in 5 years. For San-Fransisco headquarter Gap, the entry into India is an important milestone. Gap has been aggressively expanding in emerging markets to offset declining sales in its home market. The company's senior vice-president, Stefan Laban, is quoted as saying: “For us, India is the last major market without an international shopping experience and an important next step in our global expansion strategy.”
Arvind will also set up and manage Gap's ecommerce platform in India, becoming an important part of its mega-ecommerce initiative unveiled few days ago.
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