This blog is becoming a little retail obsessed, but today’s announcement that US clothes vendor The Gap is indeed heading to Australia was hard to ignore (especially as I’ve dismissed the notion at least twice before).
While I personally find the Gap offferings very dull, I also struggle to see that they can make a network of 15 or so stores economically viable in a pretty well-developed, mature fashion market. I can’t see that customers will want to pay any price premiums for what are bog-standard tees and chinos. The firm has passed much of this risk onto the franchisee.
It should be a worrying signal to said franchisee that the firm only runs company-owned international operations in Canada (191 stores in total across the firm’s three brands), Japan (147), UK (138), France (40) and Ireland (3). Note that each of this is a pretty substantial commitment for the firm in terms of store numbers, and thus able to tap into some economies of scale (Ireland is presumably subsidised by the UK operations).
Gap’s head office leaves a whole range of much smaller (and typically developing country) markets to franchisees. The list is Argentina, Bahrain, Cyprus, Greece, India, Indonesia, Israel, Jordan, Kuwait, Malaysia, Pakistan, Philippines, Russia, Saudi Arabia, Singapore, South Korea, Thailand, Turkey and United Arab Emirates. There would seem to be a pretty big ‘gap’ between most of those locations and Australia…