Gap’s plan for dozens of new stores and return to Hong Kong market comes as Ralph Lauren also posted a 40 per cent year-on-year jump in China sales in past quarter
It plans to open 50 new stores in mainland China this year and return to Hong Kong by year’s end, following a localisation overhaul that has attracted more Chinese consumers.
This expansion comes at a time when the world’s second-largest consumer market faces sluggish overall retail sales, with brands such as Zara and H&M scaling back their number of stores.
With Gap having gone through a period of contraction and store closures, the American fashion brand is striving to rebuild its growth track in China. Since Chinese e-commerce operator Baozun took over Gap’s mainland China, Hong Kong and Macau operations in early 2023, Gap has pursued its “China-for-China” localisation strategy and recorded its first profit in the fourth quarter of last year.
Gap posted 20 per cent same‑store sales growth in China for the first quarter, a record high. Its plan to open 50 stores this year – from first-tier to third-tier cities, as well as in the Tibet autonomous region – has been steadily advancing, and 10 outlets were expected to have been opened in the second quarter, Baozun said in its first-quarter earnings report in late May.
“To establish a solid footing in the current business environment, foreign companies must carry out radical and structural localisation,” said Wang Tianshi, an analyst at the Shanghai-based LeadLeo Research Institute. “They need to flatten the organisational structure and devolve decision-making power to local teams.
