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The Associated Press October 14, 2010, 8:51AM ET

Gap focuses on international, online growth

Gap Inc. is opening stores in China and Italy as it expands internationally and online, the clothing seller said Thursday.

The company said it expects international and online sales to account for 25 percent of its revenue by fiscal 2013. In 2009, those areas made up 12 percent of revenue.

"We're making the investments necessary to shift the balance of revenue over time to come increasingly from our online and international businesses," said CEO Glenn Murphy.

Gap, which operates namesake stores as well as Old Navy and Banana Republic, made the announcement ahead of an investor meeting. The company has been in the headlines recently because it updated its logo and then rescinded the change after criticism.

The stores in China and Italy will open by the end of the year.

Gap, based in San Francisco, also said it could open Old Navy stores outside North America, it is expanding its Piperlime online store and its Athleta athletic apparel brand. It also plans to sell clothes online in Japan beginning in 2011.

Finally, Gap said it plans to double the number of its franchise stores to 400 from 200 by 2015.

Gap, like many retailers, was hurt by the recession as consumers cut back, but sales have improved since it revamped its lower-priced Old Navy Stores. In the second quarter, Gap's net income rose 3 percent increase as rising sales at Old Navy and its more expensive Banana Republic stores offset declines at namesake stores, which target middle-income shoppers.


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