Gap Confident of Weathering Fallout in ‘Tougher’ European Market

Gap Inc., (GPS) the biggest U.S. apparel chain, said it can weather the fallout from Europe’s sovereign- debt crisis as it seeks to generate 30 percent of sales outside its home market by 2013.

“It’s a tougher market, there’s no doubt,” Sonia Syngal, Gap’s managing director and senior vice president for Europe, said today in an interview in Paris. “We are confident, based on our history, that we can manage to work through,” she said. Customers “come to us, particularly in tougher times.”

Gap is seeking to increase the proportion of revenue from international markets and online to lessen its reliance on North America, which accounts for about 87 percent of sales, according to Bloomberg data. The stock has fallen 15 percent this year.

Syngal, speaking in advance of the opening of the first Banana Republic store in France, declined to comment on how Gap is performing in Europe or what percentage of sales the retailer is targeting in the region by 2013. She said only that Europe will play “an important role” in the international goal.

The retailer plans to open more Banana Republic stores in Paris and in provincial cities around France, though it has yet to commit to any location, said Severine Cisinski, who runs the San Francisco-based company’s unit in the country. Banana Republic, which entered Europe in 2008, operates 600 outlets in 21 countries. The 1,482 square-meter (16,000 square foot) store on the Champs Elysees, which opens tomorrow, will be its 10th in Europe. The others are in the U.K. and Italy.

Gap, which already operates stores in France under its namesake brand, follows Marks & Spencer Group Plc (MKS) in opening a store on the Champs Elysees in the last month. The American retailer also sells clothing under the Old Navy label.

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To contact the editor responsible for this story: Sara Marley at

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