By  on January 19, 2006

NEW YORK — Two top American retailers are expanding in Asia.

Saks Fifth Avenue is close to signing a deal to open a licensed store in Shanghai, while Gap Inc. said its first franchise agreement, which will see the opening of up to 30 Gap and Banana Republic stores by 2010 in Singapore and Malaysia, has been signed.

Gap has selected FJ Benjamin, a Southeast Asia distributor and retailer, as its franchisee. The first Gap franchise will open this fall, while the first franchised Banana Republic is seen opening sometime in 2007. Singapore-listed FJ Benjamin Holdings Ltd. is a retailer and distributor of brands in Asia including Valentino, Guess, La Senza and Raoul, and luxury timepieces such as Girard-Perregaux and Jean Richard. The $16.3 billion Gap Inc. operates about 3,000 stores.

Also, Gap is expected to soon announce a new 11,000-square-foot showroom in Manhattan where franchisees can select clothing. The company did not disclose specific locations of Gap franchised stores or the showroom. The franchising strategy is headed by Joshua Schulman, senior vice president for strategic alliances.

In addition to Asia, "we are definitely looking at the Middle East and other areas" for further franchising, said Gap Inc. spokeswoman Kris Marubio.

Gap already operates stores overseas, but they are company-owned. In Japan, there are about 90 Gaps and five Banana Republics. There are also 130 Gaps in the U.K. and 30 in France, and in Canada, there are 60 Old Navy, 25 Banana Republic and 100 Gap stores.

Asked if the recent soft performance of Gap could deter potential franchisees, the spokeswoman responded: "Absolutely not." She added that there has been strong response from potential franchisees.

Stephen I. Sadove, chief executive officer of Saks Inc. and the Saks Fifth Avenue division, would not confirm whether Saks signed a deal for a Shanghai location. However, David Pilnick, Saks' vice president of international development, is believed to be in China working on a deal with a potential licensee. It would be the first Saks store in Asia, and could open in two to three years.

While not commenting on any specific sites, Sadove did emphasize that, for Saks, "there is substantial opportunity in Shanghai, and over time, other Chinese markets. The Saks brand is recognized by Chinese travelers who come to the U.S. If you go to the West Coast, in our stores in gateway cities, you see many Chinese. Chinese tourists are traveling more and more."

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