Gap Makes International E-Commerce Push

The Gap Inc. chief executive officer, Glenn Murphy, wants to compete on a global level with competitors Inditex, H&M and Fast Retailing.

"How do we win against our global competitors?" Murphy asked at Tuesday's Goldman Sachs 20th Annual Global Retail conference. His answer: international expansion and Internet growth. "We can add approximately 1,000 new stores to the business and [an additional] $1 billion in online sales over the next three years," Murphy said. "That's the kind of shift that's going on at Gap Inc."

Gap Inc. thinks most of their growth potential centers on China. They will finish this year with 80 stores and have a plan for 300 total. "We're very convinced that China is going to become an outlet market," Murphy said.

Old Navy currently has 1,000 domestic stores vs. Gap's 700 units with more potential beyond. "Old Navy does a multiple of the sales per store that Gap does," Murphy said, noting the brand will open 15 to 20 stores in Japan this year. Old Navy will also enter China in 2014 and launch an e-commerce. They are also considering Mexico, Latin America and South America.

"Old Navy is our biggest business," Murphy said. "One sector that's consistent around the world is value. It continues to gain a bigger share of the pie."

While Old Navy continues to grow and expand, the next three years will hold major growth for the Gap brand globally mostly through franchises. Gap can eventually be in 90 countries and Banana Republic is set to enter China in 2016.