Gap Inc. plans to use its burgeoning Athleta and Piperlime brands, along with its recently acquired Intermix division, to grab greater market share on the domestic front.
Speaking at the company’s 2013meeting on Apr. 17, Gap Inc. Chairman and CEO Glenn K. Murphy indicated he believes the specialty apparel giant could still grow its market share in North America by 15 percent from its current levels. Gap executives plan to achieve this feat by emphasizing the differences between its established Gap, Banana Republic and Old Navy brands, in addition to building greater bricks-and-mortar presences for Piperlime and Athleta, as well as for Intermix, which the company acquired in January for $130 million.
Piperlime is an online brand launched by Gap Inc. in 2006 that initially sold women’s shoes and accessories. Since then, Piperlime has started selling clothes for both women and men and opened its first store, inCity.
Athleta sells women’s sports apparel and may be set to benefit from the bad publicity that has recently afflicted one of its main rivals, lululemon.
Intermix is a boutique apparel chain that sells designer clothes, including Herve Leger and Yves Saint Laurent brands.
“In 2012, we ended with a 3.9 percent share of that $300 billion,” home market, Murphy told the audience. “And we gained 20 basis points in 2012 of that market share. Do we believe we can get to 4.5 percent? Absolutely.”
Gap’s CEO acknowledged the difficulty of growing market share in an environment where there are virtually no new malls or power centers coming out of the ground. Yet he sees opportunity in building up the bricks-and-mortar presence for Athleta and Piperlime, which were previously a catalog and an online business respectively.
As of February, Gap Inc. operated 990 locations in North America, a number it plans to reduce to 950 by the end of the year. Most of the stores belonged to the Gap, Banana Republic and Old Navy brands. Piperlime has only one store in the U.S., while Athleta has 35 stores and Intermix 30 stores (Intermix also operates one store in Canada).
The bulk of Gap’s new store growth in the coming years will come from itsdivision, however. From 2007 through 2013, the company managed to establish a presence in more than 40 countries around the globe. The retailer is currently focusing on opening stores in the world’s biggest cities, where its stores have proved the most successful over the past two years.
Morningstaranalyst Jaime M. Katz wrote in a March 1 note that Gap Inc. will likely keep expanding Gap’s and Banana Republic’s international and Athleta’s domestic presence in the near term.
“But we expect management [to take time] to choose smart strategic locations to expand into,” the note stated.