Reliance Retail Signs Up As Gap Franchisee In India
The American fashion brand Gap Inc. had exited India after terminating its partnership with Arvind Fashions Ltd. two years ago.
Reliance Retail Ltd., the country's largest retailer, has snapped up a long-
term franchise agreement with Gap Inc., two years after the American fashion brand exited India terminating its partnership with Arvind Fashions Ltd.
The retail arm of Mukesh Ambani-owned Reliance Industries Ltd. has become the official retailer for Gap across all channels in India through this agreement, the company said in a statement.
"Reliance Retail will introduce Gap’s latest fashion offerings to Indian consumers through a mix of exclusive brand stores, multi-brand store expressions and digital commerce platforms."
Prior to the deal, the Reliance Retail-owned online fashion platform Ajio has already been selling the Gap's collection for men, women and kids.
"We believe that Reliance and Gap complement each other in their vision to bring industry-leading fashion products and retail experiences to their consumers,” Akhilesh Prasad, chief executive officer, Fashion and Lifestyle, Reliance Retail, said in the statement.
Gap is instantly recognised for its classic logo: three bold letters arranged in an arc across the chest. Founded in San Francisco in 1969, Gap continues to build on its heritage grounded in denim and connect with customers online and in company-operated and franchise retail locations globally.
In 2020, Gap terminated the partnership with its previous franchisee Arvind Fashions, citing poor business amid the Covid-19 pandemic as the reason, and has been scouting for a local partner since then.
Arvind Fashions had tried to make the Gap business profitable by pruning store sizes and increasing local sourcing for the brand in India, but Covid-19 hit it hard as physical stores were shut for months. Sales suffered also due to dwindling footfalls, as financially strained consumers shied away from malls and high streets.
Arvind Fashions said that Gap contributed about 4.7% to its consolidated turnover, or Rs182 crore, in FY20 with a loss of Rs 34 crore before taxes.
Gap's net sales stood at $16.7 billion in 2021, up from $13.8 billion in 2020.
According to Adrienne Gernand, managing director of International, global licensing and wholesale at Gap Inc, this partnership is expected to help grow the Gap business.
“Partnering with regional experts, like Reliance Retail in India, allows us to deliver our relevant, purpose-driven brand to customers around the globe, while continuing to diversify our business portfolio through our partner-based model," Gernand said, in the statement.