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Gap to Be First U.S. Retailer to Enter Myanmar

Stocks in this article: GPS

YANGON, Myanmar -- Gap (GPS) has announced plans to produce clothing in Myanmar, the first American retailer to enter the market since the Southeast Asian country began its transition to democracy three years ago.

Two factories in the commercial capital, Yangon, are reportedly producing vests and jackets for the company's Old Navy and Banana Republic brands. They will be ready for sale in the U.S. by this summer, according to a statement released Saturday by the U.S. Embassy.

While Asian nations have long had a strong presence in Myanmar, it's only in the last few years that companies from North America and Europe have started returning, thanks to the easing of sanctions imposed on the country during its half-century of military rule.

There are plenty of obstacles in Myanmar, including electricity shortages and poor roads. But a cheap and abundant -- though poorly trained -- labor force makes the country especially attractive to retailers.

"This is a historic moment for Myanmar," Wilma Wallace, a Gap vice president, said at a ceremony attended by the U.S. ambassador. "By entering Myanmar, we hope to help accelerate economic and social growth in the country, and build on our track record of improving working conditions and building local capacity in garment factories around the world."

Gap which will produce its garments at factories owned by a South Korean company -- told The Myanmar Times that the plant would produce vests and jackets for Old Navy and Banana Republic.

The size of the investment was not announced, but the English-language newspaper said it had agreed to hire an additional 700 employees at one of the factories, bringing the total number of workers to around 2,000 at each site.

Gap said in a statement that it was working with U.S. Agency for International Development, CARE International and its PACE program to launch activities focused on technical and skills training for female workers.

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