Gap (NYSE:GPS) told investors on Thursday that it wants to grab a greater chunk of the $1.4 trillion global apparel market through international and digital expansion, while at the same time making improvements to its North American business.
By fiscal 2013, the company projects that international and online sales will account for more than a quarter of its net sales, with online revenue in particular doubling by 2015 as it expands Piperlime and Athleta.
“Our economic model is strong and allows us to generate significant cash for investors as we make our strategic growth investments,” said GAP chief financial officer Sabrina Simmons. “We have demonstrated over the last three years our ability to deliver earnings growth as we improve return on invested capital.”
Having added 25 new countries to its portfolio, the retailer will be selling products to customers in more than 80 countries by the end of the year, including Italy and China, two of the world’s top ten apparel markets. The company is also exploring opportunities to expand Old Navy stores out of North America.
The company expects to double the number of franchise stores from 200 to 400 by the end of 2015.
In an effort to drive “modest, consistent sales” growth in North America, Gap is evolving its in store experience via store remodels, with the goal of completing 35% of its fleet by the end of next year.
At the same time, Banana Republic will refine its marketing and test new store formats.
The move comes as the company seeks to rebound from weaker sales over the last few quarters.
Last month, the company said worse-than-expected same-store sales declined 2%.
Analysts predict Gap revenue to be about $14.5 billion this year.