Gap Inc. Outlines Strategies for Global Growth
Gap Inc. announced detailed plans to strategically gain market share in North America and around the world through its portfolio of six brands - Gap, Banana Republic, Old Navy, Athleta, Piperlime and newly-acquired Intermix - while investing further in its leading digital and online capabilities.
"Gap Inc. is determined to build upon its product and revenue momentum in 2012, which was achieved as we focused on becoming the world's favorite for American style," says Glenn Murphy, chairman and chief executive officer of Gap Inc. "There is meaningful opportunity for our diverse portfolio of brands to gain share in the $1.4 trillion global apparel market."
"Over the next five years, key to our continued success will be pushing the envelope further to make shopping seamless to customers through our digital strategy, while seizing the opportunity for Old Navy in many untapped international markets," Murphy adds.
Company executives have confidence about the long-term growth potential of the brands and will reaffirm their intention to expand through geographies and channels including specialty, online, outlet and franchise. The company is announcing it expects to start to franchise Old Navy in 2014 in key international markets. Additionally, it will consider building upon its success with Gap in China by exploring adding company-operated Old Navy and Banana Republic stores to this important market. Murphy and company leaders are discussing the opportunities to continue the growth of its emerging brands - Athleta, Piperlime and Intermix - in North America.
In addition to Gap Inc.'s competitive advantage given its multiple brand, channel and geography model, the company plans to build upon its online success by delivering an industry-leading omni-channel platform for consumers as the retail landscape continues to merge online and brick-and-mortar shopping experiences. This end-to-end system, which includes capabilities such as ship-from-store, find-in-store and reserve-in-store, is designed to leverage Gap Inc. channels and resources to drive store traffic and conversion, while meeting the needs of customers who increasingly demand an integrated shopping experience.
As it has the last number of years, the company will underscore its commitment to delivering against long-term financial strategies and goals.
"We are committed to driving shareholder value and remain focused on our economic model of consistently growing sales, maintaining strong expense discipline, growing earnings per share and returning excess cash to shareholders," says Sabrina Simmons, executive vice president and chief financial officer, Gap Inc.
In addition to Murphy and Simmons, the following members of Gap Inc.'s management team are slated to provide updates at today's meeting (in the following order):
- Steve Sunnucks, Global President, Gap
- Jack Calhoun, Global President, Banana Republic
- Stefan Larsson, Global President, Old Navy
- Art Peck, President, Growth, Innovation & Digital
Alternatively, audio of the meeting will be accessible until its conclusion via phone by dialing 855-5000-GPS (855-500-0477) for domestic callers or 913-643-0954 for international callers. The conference ID number is 7402090.
This press release and the related conference call and webcast contain forward-looking statements within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements other than those that are purely historical are forward-looking statements. Words such as "expect," "anticipate," "believe," "estimate," "intend," "plan," "project," and similar expressions also identify forward-looking statements. Forward-looking statements include statements regarding:
- Revenue growth, comparable sales growth, shifting sales mix to higher-return channels, and gaining market share;
- International expansion, including Old Navy expansion, franchise expansion, and expansion in China;
- Investing in growth opportunities, including Online, Outlet, Athleta, Piperlime, and Intermix;
- Digital innovation, and omni-channel development;
- Maintaining expense discipline and leveraging expenses;
- Distributing cash to shareholders, including share repurchases and dividends;
- Margin expansion, operating leverage, and growing earnings per share;
- Productivity improvements, including through optimizing North America store count, square footage, and sales per square foot;
- Disciplined inventory management;
- Strong free cash flow; and
- Improving return on invested capital.
Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause the company's actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, the following: