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Gap to Franchise in Israel

Elbit Trade & Retail Ltd. will open the first Gap and Banana Republic stores in Israel.

Gap Inc. plans to enter the Israeli market this fall through a franchising arrangement.

The company said Monday that it reached an agreement with Elbit Trade & Retail Ltd. to open stores under the Gap and Banana Republic nameplates. The first Gap store in Israel will open this fall at an unspecified location and will feature adult, children’s and babies’ apparel.

The first Banana Republic store in Israel, again at an unspecified location, is to launch in spring 2010. Gap declined to disclose a timetable for additional store openings or to project the number of stores planned under the arrangement.

“By signing this agreement, we’re building upon the success we’ve seen in other countries in the Middle East and Mediterranean,” said Ron Young, senior vice president of international strategic alliances at Gap. “We selected Elbit Trade & Retail for their extensive experience in real estate development and their strong track record of operating franchise stores for other retailers.”

Elbit, then known as Mango Israel Clothing and Footwear Ltd., was acquired in 2005 by Elbit Imaging Ltd. as a wholly owned subsidiary. It is the exclusive distributor and retailer in Israel of the Mango-Mng brand, based in Barcelona, and has held rights as Israel franchisee for the G-Star brand since 2007. Elbit operates 24 stores in Israel, including four outlet operations, according to its Web site.

Gap operates 89 Gap and 32 Banana Republic stores in 14 countries, principally in Asia and the Middle East, through franchise arrangements. Including these markets, it’s in 20 countries outside the U.S. The Old Navy brand operates in North America only and all stores under the nameplate are owned and operated directly by Gap.