How Has Gap’s Revenue, By Region, Changed Over The Past Three Years?
Gap Inc (NYSE:GPS) is increasingly focusing on its expansion in Asia, as can also be seen by its increasing store count in the region. Between 2010 and 2015, the company added 155 stores in Asia, as compared to just one in Europe, and a closure of 156 stores in North America. The reasons for this are fourfold, which have been listed below:
- Higher Revenue Per Store (RPS) – Gap Asia’s RPS is $5.2 million, versus $2.8 million for Gap North America.
- Lower Store Footprint – Gap has a lower penetration in Asia currently. It had a total of 290 stores in Asia in 2015, while in North America, the figure was 955.
- Faster Growth In China Apparel – The CAGR for the Chinese apparel market between 2012 and 2025 is 10%, as compared to less than 2% for the US.
- Favorable Comparable Market Size – The size of the Chinese apparel market was $260 billion in 2015, versus $330 billion for the US. This results in a greater scope for growth in China.
In the future, we expect growth in Asia to outpace the other key regions for the company, given the favorable outlook for China, and other emerging economies in Asia.
See our complete analysis for Gap Inc.
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Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Gap Inc
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