Member access

4-Traders Homepage  >  Shares  >  Nyse  >  Gap Inc    GPS   US3647601083

GAP INC (GPS)

34
Delayed Quote. Delayed Nyse - 12/19 04:10:06 pm
41.02 USD   +0.02%
3h ago Capital hike, asset sales to fill gap at Monte Paschi - chairman
1d agoDJU.S., Mexico Strike Deal to Scrap Sugar Duties
2d ago Air France-KLM deferral of Boeing 777 raises concern
SummaryQuotesChart AnalysisNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector news 

The Gap Inc. : Gap to Buy Luxury Retailer Intermix

01/03/2013 | 12:46am US/Eastern

Gap Inc. (GPS) is buying women's fashion boutique Intermix for $130 million, a deal that will give the mostly casual-clothes retailer an opening to the all-important luxury market.

The acquisition is the first in half a decade for Gap, which is coming off a string of rare fashion successes that boosted its sales and stock price last year.

Intermix doesn't produce its own clothes and only has around 30 stores in the U.S. and Canada. But the chain has relationships with designers, including Herve Leger, Yves Saint Laurent and Rag & Bone, from which Gap could benefit. Intermix could also expand more quickly with the help of Gap's bigger balance sheet.

Gap plans to double Intermix's store count, then look for opportunities to expand the chain overseas, said Art Peck, president in charge of new brands at Gap. The company needs to smarten up its fashion sense to remain competitive with fast-fashion rivals such as Hennes & Mauritz AB's (HM-B.SK) H&M and Inditex Group's Zara. For years, Gap's merchants did store walks at Intermix to spot new trends they could then apply to their own brands, Mr. Peck said.

"We are the incubator with emerging brands, and we can help them out with collaborations," said Intermix founder and CEO Khajak Keledjian, who will remain at the company as chief creative officer.

Gap--parent of the Gap, Old Navy and Banana Republic chains--acknowledges it overbuilt the U.S. market and is closing 20% of its North American namesake stores. Meanwhile, it is testing out new brands and trying to expand overseas.

The deal marks Gap's first since it paid $150 million in 2008 for women's active apparel retailer Athleta, an acquisition aimed at tapping into demand for yoga and workout gear. The company also has ventured beyond selling its own brands, striking up partnerships for a kids line with higher-end designer Diane Von Furstenberg, for example. In 2006, Gap started Piperlime, an e-commerce site that sells other brands such as Elizabeth and James and Trina Turk.

Sales from Athleta and Piperlime increased to $301 million in the year ended January 2012, from $187 million two years earlier, but that made barely a ripple in the company's $14.5 billion in sales in its most recent fiscal year.

Intermix has sales of around $130 million a year, a person familiar with the chain's results said. The company's private-equity owner, Goode Partners LLC, put its 40% stake in the retailer up for sale in October, and the company's investment bankers reached out to Gap late that month to start discussions, Mr. Keledjian said.

Intermix executives flew to San Francisco to meet Gap CEO Glenn Murphy and Mr. Peck in December, and the deal closed before the new year.

Mr. Murphy has been working to improve Gap's fashion sense and get new items into stores faster so it doesn't miss trends.

The CEO has also put a premium on expanding abroad into markets in Europe and Asia--with mixed success. From February through November, sales at international stores open at least a year are down 3%.

Write to Dana Mattioli at dana.mattioli@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

React to this article
Latest news on GAP INC
3h ago Capital hike, asset sales to fill gap at Monte Paschi - chairman
1d agoDJU.S., Mexico Strike Deal to Scrap Sugar Duties
2d ago Air France-KLM deferral of Boeing 777 raises concern
2d ago GAP : YEAR IN REVIEW: Creating Economic Opportunity for All Americans in 2014
2d ago UK public finances improve in November, helped by forex fines
3d ago Oil drop sends major central banks in different directions
6d ago GAP : Procrastinators Rejoice! Banana Republic to offer Six Days of Perks for La..
6d ago GAP : Procrastinators Rejoice! Banana Republic to Offer Six Days of Perks for La..
6d agoDJCEE MORNING BRIEFING : Polish Inflation, Hungary Cigarette Bill in Focus
12/12 GAP : Earnings Review - The Gap
Advertisement
Chart
Duration : Period :
Gap Inc Technical Analysis Chart | GPS | US3647601083 | 4-Traders
Income Statement Evolution
More Financials
Dynamic quotes  
ON
| OFF