Not satisfied with what they've found at home, a classic American brand is looking overseas to feed its need for sales.
The Gap is planning on opening 30 more stores in China next year, Jeff Kirwan, the company’s chief operating officer in China, said at an American Chamber of Commerce event in Shanghai on Wednesday, Business China reports. And the classic American clothier may be favoring expansion overseas over doing business in the states; the company announced in October that it would close 21 percent, or 189, of its U.S. stores, which are suffering from declining sales.
The Gap opened its first Chinese store in November 2010. The chain says it will have 35 stores in China by the end of 2012.
The purveyor of jeans and cardigans may be heading to China to take advantage of the country's growth. China’s economy is fast outpacing that of the U.S., growing 8.9 percent in the last three months of 2011, compared to 2.8 growth percent in the U.S. over that same period. While this was a slowdown from past years, China is still booming. Retail sales were strong at the end of the year, growing 17.1 percent in November and 18.1 percent in December.
In the U.S., the Gap has struggled not only with a weak recovery that has left many out to dry, but also with staying relevant amid a competitive environment in which newer and trendier stores like Uniqlo and H&M are bringing style from overseas to the states. The company also parted ways with its head designer, Patrick Robinson, in May 2011.
But in China and Europe, classic American style still has novel appeal. “For over 40 years, Gap has provided American style [and] celebrated creativity,” said Stephen Sunnucks, president of Gap Inc. International in November 2011 when the company opened its Hong Kong flagship. “We see these same values resonating as strongly with customers and employees in China as they do in our established markets.”