NEW YORK ( TheStreet) - Gap Inc. (GPS - Get Report) shares were dropping in New York as the retailer said it plans to open new stores for its flagship brand as well as for Banana Republic and Old Navy in Asia and Brazil to grow sales.
The $17-billion market cap company, which also owns Piperlime, Athleta and newly-acquired Intermix, is looking to expand internationally with its lower-price point brand, Old Navy. Gap plans to begin franchising Old Navy stores in 2014 in "key" international markets, the said San Francsico-based company in a statement Wednesday.
"We're entering a period of global growth," said Chairman and CEO Glenn Murphy in the statement. "We see it particularly in some countries ...
Gap shares were falling 1.7% to $37.15.Gap is also considering adding company-operated Old Navy and Banana Republic stores in China, based on the success it has had so far with its flagship brand there, Murphy said at an investor gathering Wednesday. The company is also looking to grow in San Paulo and New Delhi with Gap stores, the CEO added. Noting that consumers in international markets are eager to buy cultural and fashion cues from American style, the company plans to "make sure we can dominate on this front and be the world's favorite on American style," Murphy said. The global retail apparel market is a $1.4 trillion business, of which $300 billion comes from the U.S. market. Internationally, Gap's market share rose to 0.5% in 2012 from 0.25%. "For us to win, we've got to win on two dimensions ... You need integrated customer experience -- one brand, one experience online or offline, whatever we can do to satisfy customers," Murphy said. Gap had about 3.9% of the U.S. market share last year, up 20 basis points from the year before. Murphy said the company has the potential to reach 4.5% of the U.S. market.