By and  on October 31, 2006

London — Gap is taking a page from the H&M playbook to help spur growth.

The American retailer has linked with British designer Roland Mouret to launch a capsule collection of dresses, mainly in select stores in Europe but also at a handful of units in New York. The collection will arrive in 160 Gaps in the U.K., Ireland and France on Nov. 7 and should hit the New York stores a few weeks later, according to Stephen Sunnucks, president of Europe, Gap Inc. International.

"A very small selection will go into six or seven Manhattan stores by late November, early December," Sunnucks said Monday during a press breakfast to unveil the line, which will be on sale only until the end of December.

While Gap executives downplayed the comparison, the link with Mouret mirrors the strategy H&M has carried out over the last few seasons by teaming up with designers including Karl Lagerfeld, Stella McCartney and, this season, Viktor & Rolf (for more on that collaboration, see separate story). The H&M collections have created a global public relations blizzard for the Swedish fast-fashion retailer, with shoppers in major cities rushing to snap up the limited-edition designs.

Gap could use such a consumer rush into its stores. For the second quarter ended July 29, Gap Inc. posted a same-store sales decline of 6 percent for its Gap stores in North America, compared with a 4 percent decrease in the same quarter a year ago. Internationally, comps at Gap stores fell by 11 percent in the quarter, versus a gain of 1 percent in the same year-ago period. Sales at Gap stores domestically were essentially flat at $1.2 billion year-over-year, but sales on the international front lost 5.6 percent to $339 million from $359 million a year ago.

Comps for the month of September fell by 3 percent for domestic stores and dropped by 6 percent internationally.

"Gap needs to rejuvenate their customer, whom they have been disappointing for two years," Christine Chen, senior research analyst at Pacific Growth Equities, said Monday. "This is a great thing for them, especially rolling it out in key markets.

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