With improved product performance and continued international expansion, the ubiquitous clothing retailer has done well this year, as its February net sales surged 11% to $966 million. Its comparable sales jumped 3%, which inspired The Gap Inc. (NYSE:GPS) to push its boundaries further.
Since venturing into China in 2010, Gap has been rapidly expanding in the country, and opened stores in six new locations last month. From the latest announcement, it has become apparent that the company now plans to make its presence felt in Brazil, with its stores opening at the end of this fall.
And not just this, there is good news for the Japanese customers as well, as The Gap Inc. (NYSE:GPS) plans to open 20 Old Navy stores in Japan this year. It has already successfully established 140 Gap and 35 Banana Republic stores in Japan, and plans to expand itself further.
The Gap Inc. (NYSE:GPS) also seems to be giving quite a tough time to many a renowned brands, and reeling under its pressure is none other than Lululemon Athletica inc. (NASDAQ:LULU) . Lululemon was already facing severe criticism from its customers for the ‘too sheer’ women’s yoga pants blunder, and was forced to recall 17% of the production when The Gap Inc. (NYSE:GPS)’s Athleta came into the market with a bang.
Of late, the Athleta chain has been opening stores near Lululemon Athletica inc. (NASDAQ:LULU) locations and undercutting the yoga retailer on prices. Lululemon’s famous $98 yoga pants are feeling the heat as Athleta has come up with a wider range of yoga pants for just $69. To earn an extra edge, Athleta has taken the eminent yoga classes of the Lululemon Athletica inc. (NASDAQ:LULU) stores a notch higher by organizing fitness events, such as interval training and running clubs along with yoga.
Another factor that has taken Athleta one step up on the competitive ladder is its service. It pampers its customers with frequent clearance sales and a vast range of products made available at comparatively moderate prices. It surely knows how to make its customers happy, allowing them to return any product at any time and for any reason. And this clearly explains why Athleta’s customers have been pouring their hearts out on it.
The other name which has hit rough waters thanks to Gap is Children’s Place Retail Stores, Inc. (NASDAQ:PLCE) . As Gap, along with Diane Von Furstenberg, gears up to launch a second GapKids and Baby Gap collection this spring, Children’s Place Retail Stores, Inc. (NASDAQ:PLCE) would face the heat.
The competition has been fuming since long, and it peaked this year with Children’s Place Retail Stores, Inc. (NASDAQ:PLCE) Retail posting weak 2012 revenue of $1.8 billion. Although its annual sales advanced 11%, its same-store sale growth of 4.3% was not that impressive against Gap’s 5%.
The Gap Inc. (NYSE:GPS) is on a dream run with its fourth-quarter sales improving 5% and pleasing Wall Street with a robust $ 4.28 billion figure. Also, the company never fails to give a fair share of its success back to the shareholders, and this commitment holds true even for 2013 as it announced an increase of 20% in dividend.
I believe Gap will continue its strong run and live up to the expectations of its customers and investors going forward.
The article This Specialty Retailer Is Playing its Cards Right originally appeared on Fool.com is written by Eshna De.
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