In another move to expand its international presence, Gap Inc has signed a deal with Mexico's leading department store chain to sell Gap brand merchandise in a franchise "store within a store" concept.

The agreement signed by the San Francisco company with Distribuidora Liverpool will begin selling products in the spring of 2009.

It replaces a previous wholesale arrangement between the two companies during which Liverpool had introduced Gap brand apparel in a limited manner to customers in Mexico.

"As the 10th largest apparel market in the world, Mexico is an important country for us as we expand our franchise presence to Latin America," said Ron Young, senior vice president of international strategic alliances for Gap Inc.

"Our franchise program continues to build momentum with 21 countries and 100 stores.

"Partnering with local experts in regions throughout the world has been extremely beneficial, allowing us to introduce our brands to new customers in relevant and exciting ways."

The company also said it has expanded its relationship with Fawaz Alhokair Group to include franchise agreements for Gap and Banana Republic in Egypt and Jordan.

Fawaz Alhokair Group recently opened Gap and Banana Republic stores in Saudi Arabia and will now open stores in Egypt and Jordan over the next five years.

The first Gap stores are expected to open in Egypt and Jordan for the 2008 holiday season, followed by Banana Republic stores in Jordan in the spring of 2009 and in Egypt for the 2009 autumn season.

Since the Gap Inc franchise program began two years ago, more than 70 Gap franchise stores and nearly 30 Banana Republic franchise stores have opened.

There are Gap franchise stores open in Bahrain, Greece, Indonesia, Korea, Kuwait, Oman, Qatar, Malaysia, Saudi Arabia, Philippines, Singapore, Turkey and the United Arab Emirates.

Banana Republic franchise stores have opened in Bahrain, Indonesia, South Korea, Kuwait, Oman, Qatar, Malaysia, Singapore, Philippines, Turkey and the United Arab Emirates.

In addition, Gap Inc has signed and announced agreements to open Gap and Banana Republic franchise stores in Bulgaria, Croatia, Cyprus, Romania and Russia over the next 5 years.