Gap Japan is focusing on initiatives to boost sales and profitability while rousing its retail program and splurging on a new poster and newsprint marketing campaign.

A total of three new GAP stores, in Takasaki, Asahikawa and Kisogawa will have opened by the year end while Japan's first stand alone Baby Gap will open in the Isetan store this spring.

Michael Causton of Tokyo-based retail analysts Japan Consuming says the figures suggest Gap Japan is now the biggest successful foreign retailer in Japan.

"As far as we can estimate, this is the largest store network of any overseas apparel retailer in Japan. JC's own forecast was for around 150 stores in Japan by this year. However, new store openings fell dramatically after the rapid increase in 2000 and 2001. In 2002, five stores were reportedly opened and in 2003 only two were added."

The new additions will bring Gap Japan's total of store locations to 70 Japan. Separated by fascia (Gap, Gap Kids and Baby Gap), the total number of distinct stores operated in Japan will rise to 133 but still short of Gap Japan's potential says Causton.

"Unfortunately for Gap Japan, the Gap US head office may have been the largest hindrance to its expansion here. As is well known, the home base had a disastrous couple of years with poor merchandising hitting sales and the bottom line.

"Within Japan, many analysts suggested Gap faced serious competition from Uniqlo but as JC has argued before, Gap is very different not only in its positioning but also in product and retail environment."

By Michael Fitzpatrick.