GAP In­dia story

Shoes & Accessories - - Research -

Gap for­mally en­tered In­dia in May 2015 when they opened their first flag­ship store at New Delhi’s Se­lect Ci­ty­walk Mall. It signed a fran­chise agree­ment with Arvind Life­style Brands Ltd, a unit of Arvind Lim­ited - In­dia’s largest in­te­grated tex­tile and ap­parel com­pany, to en­ter In­dia. While the agree­ment be­tween the two com­pa­nies took place in 2015, Arvind has had a long and suc­cess­ful as­so­ci­a­tion with Gap as their ven­dor part­ner, the for­mer be­ing a sup­plier of denim to Gap. Glob­ally, Gap is known for its den­ims and 25% of the ap­parel in Gap stores in In­dia con­sists of den­ims.

In­dia, for long, had been on the radar of Gap as a strong con­tender for po­ten­tial busi­ness. It of­fered to Gap an emerg­ing, vi­brant mar­ket and fore­told of an im­por­tant phase in its global ex­pan­sion strat­egy. As the world’s sec­ond most pop­u­lous coun­try with more than 1.2 bil­lion peo­ple, In­dia rep­re­sented an im­por­tant plat­form to bring Amer­i­can ca­sual style to con­sumers. Be­sides the favourable GDP growth rate, there was an in­creas­ing band of young buy­ers with the propen­sity to spend in the price bracket of­fered by Gap. In­dia was also leapfrog­ging into the tech­nol­ogy band­wagon, be­ing ranked the world’s third largest mar­ket in terms of the num­ber of in­ter­net sub­scribers.

While the re­tail mar­kets in most western coun­tries had be­come some­what sat­u­rated for Gap, in­clud­ing the home turf of US, In­dia pre­sented a vast scope of growth and ex­pan­sion. Not sur­pris­ingly, it was an­nounced on Gap’s en­try in 2015 that Arvind en­vis­aged a po­ten­tial rev­enue op­por­tu­nity of INR 10 bil­lion by 2020.

The brand to­day has 11 stores that have come up within a span of 18 months – two each in New Delhi, Mum­bai and Bengaluru, and one each in Gur­gaon, Noida, Pune, Chen­nai and In­dore. The av­er­age size of stores here are in the range of 8,000–10,000 sq ft. Go­ing for­ward, there are plans ot launch­ing stores in other cities such as Kolkata, Hy­der­abad, Chandigarh, Lucknow, Lud­hi­ana and Kochi. Although cur­rently Gap stores are present only in malls, ow­ing largely to the con­ve­nience of be­ing lo­cated in a mall with high foot­falls, they are open to be­ing lo­cated on high streets as well, if the propo­si­tion seemed at­trac­tive.

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