By and  on May 2, 1994

PARIS -- The Gap may be launching its own invasion of Europe.

After testing the waters in a boutique at Galeries Lafayette since September, The Gap opened its first freestanding store on the Continent here last Wednesday. It could be the first of many new Gap stores outside the U.S.

If the first Saturday is any indication, The Gap seems to have struck a responsive chord. Fifteen minutes before its 10 a.m. opening, according to store manager Teresa Hadly, people were lined up outside the store on Rue de Passy -- an area described as "a real family neighborhood." Traffic, she said, was steady all day.

"We have hardly anything left, and they're still buying," Hadly said at about 5 p.m., looking at a packed main floor where shoppers were lined up at dressing rooms and cash registers. "At this point, we are past our Saturday projection by 30 percent."

Hadly -- one of the few Americans working at the store, which has about 25 salespeople just on the main floor -- said the projection was based on the first Saturday of the Gap boutique in Galeries Lafayette.

Most of the buyers were from the neighborhood, she said, "but one woman said she came up from Bordeaux just to see the store."

Most popular, said Hadly, were the women's fashion items, including blouses, cotton crop sweaters and cotton slip dresses. She said she expects a new shipment of "basics" and the new collection on Tuesday.

Opening day was like a child's birthday party, complete with T-shirt painting and balloon twisting. The Gap had invited French mothers and their children to check out the Baby Gap and Gap Kids collections, also making their debut on the Continent.

"Galeries Lafayette has been an excellent entry into the French market," said William Fisher, president of Gap International, "but the corner [boutique] is half the size of this store, and we only offer our men's and women's lines. We can do so much more in this bigger space." The Gap store is in the new Passy Plaza shopping center on Rue de Passy, a popular shopping street in the ritzy 16th Arondissement. The space is a duplex, roughly 14,000 square feet, with one entrance on the street and a second inside the mall.Although Gap officials would not provide any sales projections, Gap stores in the U.S. average $480 a square foot, according to sources. If the Paris store matches that, annual sales could hit $6.7 million or more, depending on the price differences.

While the interior looks like any stateside Gap, there are a few aspects of the operation that make it distinctive in France:

It's rare to see one brand take up such a huge space, at least in Paris.

The store will get fresh merchandise eight to 10 times a year, another rarity in France.

An elevator -- unusual for a specialty store in France -- ferries parents and their kids from the street level to the basement level, which is devoted entirely to The Gap's children's offerings.

Another nifty touch is the two handrail heights -- one for adults and one for children -- on the stairwell between the two floors.

Fisher looked at several locations before settling on the Passy site.

"This is a real family neighborhood, unlike parts of the Left Bank, or Place de la Madeleine, and will allow us to get a good cross-section of customers," he said.

To attract clients, The Gap has launched a direct-mail campaign, sending a 16-page mini-catalog to some 25,000 households in and around the 16th Arondissement. Called "Summer in America," the catalog features photos of models in Gap clothes and pictures of typically American artifacts, like a baseball or an Adirondack chair.

Advertising is on hold for now.

"I'd rather spend the money opening stores," Fisher said. "That's our best advertising."

Fisher admitted that The Gap is not the best-known brand in Europe.

"We're better known in cities, where people travel more," he said. Fisher said the company hopes to open "a number" of Gap stores in Paris, possibly within 12 months.

Gap goods are more expensive here than in the U.S., but Fisher attributed that mainly to the 18.6 percent value-added tax here. The Gap's basic pocket T-shirt, for example, retails here for $14.65 (85 francs) at current exchange rates, compared with $10.50 in the U.S.On the fashion side, Fisher said that at Galeries, the French buy the same kinds of things that appeal to Americans.

"We sell the twills, denim and women's fashions very well," he said. "Sometimes the goods are worn differently -- they may be tighter, for example -- but not always."

And, like Americans, the French tend to mix their Gap items with designer apparel.

Fisher has not ruled out the possibility of expanding in the Galeries Lafayette chain and is also interested in pursuing freestanding stores, and stores in shopping centers.

Foreign expansion is being pursued on several fronts, Fisher said. In addition to France, The Gap will open 18 more stores over the next two years in the U.K., where there are currently 45 stores. The company also hopes to open in the German and Japanese markets in 1995. However, Fisher said, Gap business outside the U.S. -- which represented 8 percent of last year's consolidated sales of $3.3 billion -- is not expected to grow significantly over the next few years.

The Gap still has one wrinkle left to iron out: an ongoing trademark infringement case brought by Swiss jeans maker Big Star SA.

Big Star owns a sportswear firm called Gap Star, and the rights to use that trademark in France and the Benelux countries. The Gap was able to open its Galeries boutique and the freestanding store because no decision has been made in this case. Moreover, Fisher explained that The Gap has not been issued any injunction that would prohibit the company from opening stores.

While Fisher could not comment on the legal aspects of the lawsuits, he did say that Gap is confident in its rights.

"It's our name, and it has been since 1969," he said. "We should and will open more stores."

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