Gap will open its third Sydney store in two months next week, as it looks to hit 20 stores in the next 10 years as part of its joint venture with Oroton Group. In less than 12 weeks, Gap has launched its latest global fitout at new sites in Sydney at Macquarie Centre and Westfield Miranda. A third will open at Westfield Parramatta next week and will be its largest in NSW. All three stores are the first to open with local licensee, Oroton. Oroton secured the local licensing agreement with
Gap Inc in October last year, taking the reigns from Busby Holdings.
The deal came one month after Oroton signed a joint venture deal with US label, Brooks Brothers, after severing ties with Ralph Lauren.
Under Busby Holdings, two Gap stores were opened at Westfield Sydney and Chadstone, both are still trading under new management.
Gareth Costello, GM of Gap Australia, told Inside Retail PREMIUM that Gap is aiming for 20 stores over the next 10 years, but says the brand has not yet settled on where its next store will be following Parramatta. It is understood to be looking at sites outside of NSW.
Since Oroton’s takeover of the brand from Busby, two of the biggest changes to Gap’s offering have been pricing and seasonality.
In Australia, Gap prices have been reduced by 30 per cent, making it more in line with US pricing, and seasonality has been reversed. Instore, children’s and babywear has a greater focus, as well as Gap’s athletic apparel.
“When we took the business on they were trading winter product in the summer period, now we trade summer in summer, and that has obviously been a big change for the brand,” Costello said.
“We lowered the pricepoints as soon as we took over. We’ve seen volume sales growth because we’re selling a lot more units.”
Gap Australia is yet to launch an online store, but Costello says it is part of the brand’s long term strategy.
“E-commerce is an option to do going forward, but we’re working with Gap to decide on when it will be.”
Gap is in discussions with Myer and David Jones for potential concession stores for its men’s, women’s, and children’s wear ranges.
As part of the Gap deal, Oroton Group also has the rights to develop Gap Inc’s Banana Republic label in Australian and the option to develop Old Navy.
As previously reported by Inside Retail PREMIUM, Banana Republic is expected to open in Australia in 2015.
Oroton Group recorded a net profit of $8.3 million in 2013-14 compared to $7.1 million in the previous financial year.
The fashion retailer’s revenue increased 26 per cent to $124.9 million, with like for like sales growth lifting eight per cent compared to a four per cent drop in the previous year.
Gap was founded in California in 1969 as an accessible denim retailer, and today has more than 3100 company stores and 300 franchised sites globally.
It was the first major international apparel brand to enter Australia back in 2010 and has since been followed by Zara, Topshop, H&M, and Uniqlo.
