ROME — As part of its bullish international expansion strategy, Gap Inc. opened its first Gap flagship in Rome on Saturday and said it hopes to open four new Gap and Banana Republic stores in Italy by the end of 2011.

This story first appeared in the August 1, 2011 issue of WWD. Subscribe Today.

Despite pressures from rising production costs and having slashed its full-year profit outlook in May, the company is marching on with expansion plans and expects to reach 25 new company store openings worldwide by yearend.

“Only 15 percent of our business [in terms of revenue] is booked outside of the U.S. We hope to reach 30 percent by 2013,” said Sonia Syngal, managing director and senior vice president of Gap Inc.’s Europe business during a preview walk-through on Friday.

The first Gap and Banana Republic stores were opened in the Italian fashion capital of Milan late last year. Gap Inc. said the two Milan stores combined are among the top-performing units in the company’s worldwide network. Gap Inc. also has two smaller mall stores and one outlet store in Italy, and said it expects to open additional stores in Italian outlet centers.

The company declined to comment on where it plans to open additional stores in Italy.

Last year, the Gap brand also made its products available to European customers online by launching an e-commerce site specifically for Europe. The site services 21 European countries, including Italy.

On average, Italians spend more than U.S. customers and there is significant demand in Italy for the company’s kids and baby segments, Syngal said.

The new Gap store in Rome is located on Via del Corso, in the heart of the historic center — just a short walk from the Spanish Steps and Piazza del Popolo. One of the busiest shopping promenades in the nation, Via del Corso has changed significantly over the last 10 years and now contains several international chains, including fast-fashion juggernauts Zara and H&M.

Gap Inc. sees stores like Zara as an important global competitor, explained Syngal, but said that Gap has a “distinct advantage,” as it offers high-quality wardrobe staples like the denim that the company is famous for throughout the U.S.

The two-story, 14,111-square-foot space was originally a bank and most recently a book store. To celebrate the building’s past, the store houses a book corner with a variety of art and style books.

Several of the structure’s original elements have been preserved, including a Forties mural by Giulio Russo showcasing men on a scaffold wearing white T-shirts and denim. The piece was restored with the help of a team of Vatican artists.

The store houses Gap adult, GapKids, babyGap and GapBody and on Saturday will begin selling items for fall and summer, including the brand’s new Gap Rome label T-shirts and traditional items like its 1969 Premium Jeans.

The Rome store will also feature a personal stylist studio for individual consultation. The service will be free, but must be booked in advance.

At the end of the first quarter of this year, the San Francisco-based retail giant had more than 190 company operated stores in Europe and more than 500 company operated stores internationally — including Canada, the U.K., France, Ireland, Italy, Japan and China. In addition, the company has more than 180 franchise stores in 25 countries across Asia, Europe, Latin America, the Middle East and Australia. In June, Gap Inc. said it hopes to double its number of franchise stores to 400 by fiscal year 2014.

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