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November 10, 2022

Gap’s China business to run under new ‘franchise model’ from 2023

US specialty clothing retailer Gap Inc has sold its China business as part of its 'strategic review' to amplify the brand in the Chinese local market.

By Shemona Safaya

Gap Inc revealed earlier this week (7 November) that it signed agreements to sell its Gap Greater China business to e-commerce solutions company, Baozun Inc, which will operate in-market site and stores under a franchise agreement.

The clothing brand says, Baozun has supported the expansion of Gap’s online business in China as its trusted partner since 2018, along with being an e-commerce solution provider and digital commerce enabler.

“With its local expertise and best-in-class omni-channel technology and deep expertise in data management and digital business, Baozun will enable Gap brand to better connect with Chinese consumers across all channels.”

In October 2020, Gap Inc announced the ‘strategic review’ of its company-operated Gap businesses around the world. It set out proposals to shake up its business, with a heavier focus on the Old Navy and Athleta brands and the closure of around a third of Gap and Banana Republic stores in North America.

This news comes as a result of the review of Gap China.

The brand believes this will allow Gap to serve the market through a more asset-light, cost-effective model and to benefit from the local and technology expertise of Baozun.

“We expect to transition the business to Baozun in the first half of 2023, and until regulatory approvals and closing conditions are met, the Gap Greater China business will continue to operate as usual,” said Mark Breitbard, president and CEO of Gap brand.

“To the teams that support our China business, I look forward to seeing all that Baozun can unlock for GGC as they take on our stores, assets and most importantly our incredible people. I want to thank you for your support as we make this transition and express my appreciation of the China leadership team for leading the work.”

Earlier this year, Gap said it achieved its goal to empower two million people to improve their access to water and sanitation in India. It was aimed at improving and sustaining the health and wellbeing of communities touched by the apparel industry in two states in India – Maharashtra and Madhya Pradesh.

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