Gap's Sales Growth to Come From Markets Outside the U.S., CEO Murphy Says

Gap Inc., the San Francisco-based operator of more than 3,000 clothing stores, expects most of its sales growth to come from outside North America and online, Chief Executive Officer Glenn Murphy said today.

The company will be able to sell products in 80 countries by the end of 2010, an increase from 25 at the start of the year, according to a statement. This expansion includes the first stores in Italy and China.

Online sales will double to $2 billion by no later than 2014, said Toby Lenk, who runs that business. The retailer also said it plans to avoid television advertising this holiday season for the Gap brand, unlike last year, to focus on the Web and mobile.

Sales at U.S. retailers have grown for 13 straight months as consumers emerge from the worst recession since the 1930s. The slump has led some customers to watch their wallets, prompting more of them to seek discounts as they begin shopping for the holidays.

Gap, which also operates the Banana Republic chain, rose 7 cents to $19.06 at 11:09 a.m. in New York Stock Exchange composite trading. The shares had fallen 9.4 percent this year before today.

Revenue from outside North American and the Web will make up one-quarter of total sales by 2013, Gap said, compared with 21 percent in the most recent quarter. The company also is exploring whether to open Old Navy stores outside North America.

To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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