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First Gap Franchises Set for Far East

Gap's first licensed stores in the Far East, including a flagship in Singapore, will be announced today.

NEW YORK — Gap Inc.’s first franchised units — four in Malaysia and three in Singapore — will be operating in time to capture holiday 2006 shopping, the retailer said.

With its new model for global expansion, the $16 billion retailer is seeking to rev up an international operation sometimes hampered by disappointing performance. Gap also is examining other potential franchise agreements for additional international expansion. Gap already operates stores in the U.K., Canada, France and Japan, all company-owned.

“There is a lot of interest from retail operators in different parts of the Far East and different parts of the world,” said Joshua Schulman, managing director of international strategic alliances and senior vice president of Gap International product development and merchandising. “We are evaluating the opportunities.

“We want to make sure in each region we select the right franchisees who are able to express the spirit of our brands in their local market,” he said in an interview. “We really see these stores as having a seamless customer experience with our worldwide standards.”

Aside from skewing the assortment to smaller sizes and warmer climates, the franchised stores will offer the same products, store design and ads as their U.S. counterparts, Schulman said.

The first franchised units are in high-profile, densely populated street and mall locations. FJ Benjamin Holdings Ltd. holds the exclusive franchise rights to operate Gap and Banana Republic stores in Singapore and Malaysia, where it plans about 30 units by 2010, including the first Banana Republic doors in 2007.

The only other Gap Inc. franchise agreement is in the Middle East with the Al Tayer Group, which forecasts 25 Gap units and 10 Banana Republic stores by 2010. No locations have been announced. Al Tayer has exclusive Gap Inc. rights in the United Arab Emirates, Kuwait, Qatar, Bahrain and Oman.

Among the franchised locations in the Far East is a 9,000-square-foot flagship at Wisma Atria, a shopping center in the heart of Orchard Road, considered the Fifth Avenue of Singapore. It should open in the first week of December and will sell the full range of Gap adult, kids’ and baby products.

Other Singapore locations are in Vivo City, a new shopping and entertainment complex on the harbor expected to open the first week of November, and the Centerpoint Annex shopping center along Orchard Road.

Gap is launching its international franchising business in Malaysia, where a Gap store selling women’s clothing and accessories will open in October in central Kuala Lumpur, at the Lot 10 Shopping Centre. Another Gap women’s unit will make its debut on the ground level of the One Utama Shopping Center, a suburban mall in Petaling Jaya, around the same time. Upstairs in the mall, a Gap kids’-baby store will also open, and another kids’-baby unit will open in the Mid Valley Mall on the edge of Kuala Lumpur.