How Gap Inc (GPS) Is Expanding In Chinese Markets?

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Apparel sales giant Gap Inc (NYSE:GPS) is in the process of establishing a strong store footprint in the U.S while also maintaining a close eye on further international growth. The ongoing expansion has seen the company open an additional 116 owned stores that translate to a square footage growth of 2.4%; 39 of the stores have been opened in China, made up of 7 new Old Navy Stores and 32 new Gap stores.

Expansion Plans

Gap Inc (NYSE:GPS) plans to open an additional 115 new stores this year, which should bring its square footage growth to 2.5%, made of both domestic and international footprint. The company is also eyeing further growth in China, which should offer further synergies for growth, being the second largest economy in the world. China has an estimated annual growth potential of 23%, mostly in the women’s apparel segment, which Gap plans to target with the opening of 40 new stores.

The new stores should help the company add to its wide pool of revenue as they seek to improve on their market share, especially in North America. Store traffic has been improving in the recent past, especially on Gap Inc (NYSE:GPS) launching the Athleta brand, which is already available in 101 stores. The next phase should involve the expansion of the company’s active wear and ready to wear wardrobe category.

Online Growth

Gap Inc (NYSE:GPS) is also improving on its technological support as well as operations with the testing of the mobile POS based cloud service, which is expected to accord customers an easy shopping experience. Online growth is also being pursued with the company, focusing on inventory availability for stores and online orders. The company is already enjoying global recognition with brands like Old Navy and Banana Republic doing extremely well.

Investors interests are also being addressed, Gap Inc (NYSE:GPS)’s board of directors having approved a dividend of $0.23 a share for the first quarter, up from $0.22 a share in the fourth quarter. A strong growth potential at the back of the footprint expansion, especially in the Chinese market, makes GPS a stock worth watching.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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