TJX TJX Companies Inc

The world’s leading apparel retailer Gap Inc. (GPS) said ‘bonjour’ to Paris as its Banana Republic Stores debuted in the fashion capital of the world.

Gap’s first flagship Banana Republic store in the country spreads across 15,952 square feet and is situated at Avenue des Champs Elysée, Paris. The flagship store offers affordable premium luxury and modern versatile style that makes shopping a pleasing experience for the visitors.

Gap Inc., whose other brands include Old Navy and its namesake, revealed that the store is part of its international growth strategy.

According to Gap’s management, the new store combines traditional and contemporary elements and the Banana Republic collections for him and her, personal care products. It will also flaunt the Monogram collection, which is claimed to be the “the very best of Banana Republic”.

Gap has been operating in France since 1993 and currently has close to 40 Gap stores in the country. However, only recently has the company started to expand Banana Republic stores in Europe.

In 2010, Gap had opened an Italian flagship in Milan. In the same year it started selling apparel and accessories on a dedicated European Banana Republic e-commerce site.

Gap is following its peers and has been looking for overseas growth, as Americans continue to cut back on spending during this uncertain economic scenario. As a part of this strategy, the company decided to reduce its overall square footage in the U.S. By the end of 2013, it expects to curtail the square footage by 10% from what existed in 2007. Meanwhile, the company expects to roughly double the revenues from outside of the U.S. to 30% by the end of 2013.

In a bid to achieve this goal, Gap announced its plans to close 189 locations or 21% of its namesake store in the U.S. by the end of 2013. 

At the same time, the company has revealed that by the end of fiscal 2012 it is going to increase its number of stores five-folds in China to 45 stores, up from the current count of 9 stores.

Gap competes with national and local department stores and discount stores, such as American Eagle Outfitters Inc. (AEO) and The TJX Companies Inc. (TJX). Currently, the company maintains a Zacks #2 Rank, which translates into a short-term ‘Buy’ rating. Our long-term recommendation on the stock remains ‘Neutral’.

 
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