Gap Inc. said on Wednesday that it will open its first franchise-operated Old Navy stores in the Philippines in 2014.
Franchising Old Navy units is a key to the brand’s international expansion strategy.
Gap is partnering with Stores Specialists, which operate the Gap brand and Banana Republic stores in the Philippines market. Two Old Navy units will bow in early 2014 with plans for more stores by the end of the year.
Sonia Syngal, senior vice president of Old Navy International, said the Philippines is considered a small to midsize market. “It will give us a nice sized business with 20 to 30 stores over time,” she said. “We think the Philippines is the right place to start. We [Gap Inc.] have a proven track record there with a very strong partner we’re confident in.”
Syngal called the Philippines “an important step in the brand’s international expansion.”
Old Navy operates over 1,000 stores in the U.S., Canada and Japan and recently revealed plans to open stores in China in the first half of 2014.
The company’s worldwide growth has been deliberate and cautious. After launching in Canada in 2001, the brand waited 11 years, until 2012, to enter its next foreign market — Japan. Syngal said Old Navy is getting “increasingly confident” about opening stores abroad.
“We’re evaluating all global markets,” she said. “Southeast Asia is a big focus. We’re also very intrigued by the Americas. Those are the regions that we’re evaluating. Europe is not a short-term priority for us. The economy is tough and the real estate market is quite challenging and costly. Our global brand president, Stefan Larsson, is from Europe and believes there’s a place in Europe for Old Navy. We want to participate at the right time.”
Because Old Navy appeals to everyone from families on a budget to full-out fashionistas, the brand is “resilient to economic ups and downs,” Syngal said. “We service the broadest set of consumers in Gap Inc.”
Old Navy’s brand awareness is high in the Philippines, Syngal said. Stores will be similar in size to Old Navy units in the U.S. and will contain all the bells and whistles. “We want to be very consistent, from product to positioning. That includes the store experience. The first two stores in the Philippines will be in the 15,000- to 17,000-square-foot range with a lot of the energy and fun Old Navy is known for.
“We’re quite serious about being aggressive with Old Navy’s global expansion,” Syngal said. “We’re the number-one apparel brand in the U.S., according to NPD, and have not really exploded.”