US garment retailer Gap set to enter India with branded stores next year

New Delhi: American garment retailer Gap Inc. is set to open its stores in India early next year. The company is close to signing a franchisee deal with Arvind Ltd which is expected to be announced in the coming weeks, people familiar with the development told ET.

Gap has almost sealed the deal with Ahmedabad-based textile conglomerate Arvind Ltd to open its branded stores in India, a person privy to the talks between the two companies said. “It is more or less a done deal and will be announced in a week or ten days,” said the person, who did not wish to be identified.

“Initially it will be a franchisee model with Gap having the call option to buy stake in the company in future,” the person said, adding that a group of senior Gap officials was expected to visit India to announce the deal.

Arvind Ltd has been scouting for about 10,000 outlets in various malls across the country for Gap brand and the group is on the verge of securing spaces in several malls in New Delhi and Mumbai, ET has learnt.

A three-member team of Gap’s global operations is set to visit India next week and along with Rajiv Malik, general manager of Gap’s sourcing office in India, expected to finalise the spaces lined up in malls by Arvind in India.

“Initially Arvind will run the stores, but Gap will be very much involved,” said the second person with direct knowledge of the matter. “The business will be structured in a manner that Gap will have say in real estate, look of the stores and the merchandise…Gap will control all aspects of the operation,” he added.

Malik declined to comment on the matter while J. Suresh, MD of Arvind Brands was not immediately available for comments.
Gap will join global fashion apparel brands such as Zara, Mango and Marks & Spencer, among others, that already have presence in India. Gap’s other global rival, Sweden’s Hennes & Mauritz, last year received approval for a fully-owned subsidiary in India and is planning to open its H&M-branded stores in the country later this year.

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