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UPDATE 2-Gap to open first overseas Old Navy in 2012
April 19, 2011 / 2:14 PM / in 7 years

UPDATE 2-Gap to open first overseas Old Navy in 2012

* Bringing international operations under one unit

* First Old Navy stores overseas to open in Japan

* Shares down 0.2 percent in morning trading (Adds details on Gap’s international unit, updates shares)

NEW YORK, April 19 (Reuters) - Gap Inc (GPS.N) plans to open its first Old Navy store overseas by the end of next year to accelerate an international push aimed at reducing its reliance on North America, where sales have been declining.

Gap, which also operates the Banana Republic chain and namesake stores, said on Tuesday that it would bring together its international businesses under one division to be run from London.

The moves come as the clothing retailer is looking to mitigate softening business in North America, where it got 78 percent of its sales in 2010. Gap named a new head of its North American unit on Feb. 1. [ID:nN01291177]

The company expects at least 30 percent of sales to come from its international and online businesses by 2013.

To help it achieve that goal, the company last year opened its first four stores in China and launched a Web site there. It is planning on another 10 Chinese locations in 2011.

Gap expects to open its first Old Navy store in Japan by the end of 2012. Gap’s first namesake store in Japan came in 1995 and the first Banana Republic in 2005. Gap Inc currently operates 150 stores, or almost all of its Asian stores, in Japan.

In March, comparable sales at all three of its chains fell by 8 percent or more in North America. Overall, sales at company stores open at least year fell 10 percent worldwide, a steeper fall than analysts were expecting.

Stephen Sunnucks, who joined the company in 2003 and oversaw the expansion of the Gap and Banana Republic chains in Europe, will head the newly formed international division.

Shares were down 4 cents or 0.2 percent, to $21.75 in morning trading. (Reporting by Phil Wahba, editing by Dave Zimmerman)

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