The Gap 2006 Annual Report Download - page 20

Download and view the complete annual report

Please find page 20 of the 2006 The Gap annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 92

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92

PART I
Item 1. Business
General
The Gap, Inc. (the “company,” “we” and “our”) was incorporated in the State of California in July 1969 and
was reincorporated under the laws of the State of Delaware in May 1988.
We are a global specialty retailer operating retail and outlet stores selling casual apparel, accessories, and
personal care products for men, women and children under the Gap, Old Navy, Banana Republic, Piperlime, and
Forth & Towne brands. We operate stores in the United States, Canada, the United Kingdom, France, Ireland,
and Japan. We also have franchise agreements with unaffiliated franchisees to operate Gap or Gap and Banana
Republic stores in Singapore, Malaysia, United Arab Emirates, Kuwait, Qatar, Bahrain, Oman, Indonesia, and
Korea. Under these agreements, third parties operate or will operate stores that sell apparel, purchased from us,
under our brand names. In addition, our U.S. customers may shop online at www.gap.com,
www.bananarepublic.com, www.oldnavy.com, and www.piperlime.com.
We design virtually all of our products, which are manufactured by independent sources, and sell them
under our brands:
Gap. Founded in 1969, Gap stores offer extensive selections of classically styled, high quality, casual
apparel at moderate price points. Products range from wardrobe basics such as denim, khakis and T-shirts to
fashion apparel, accessories, personal care products for men and women, ages teen through adult, and
maternity apparel. We entered the children’s apparel market with the introduction of GapKids in 1986 and
babyGap in 1989. These stores offer casual apparel and accessories in the tradition of Gap style and quality
for children, ages newborn through pre-teen. We launched GapBody in 1998 offering women’s underwear,
sleepwear, loungewear, yoga gear, and personal care products. We also operate Gap Outlet stores, which
carry a similar line of products.
Old Navy. We launched Old Navy in 1994 to address the market for value-priced family apparel. Old
Navy offers broad selections of apparel, shoes and accessories for adults, children and infants as well as
other items, including personal care products, in an innovative, exciting shopping environment. Old Navy
also offers a line of maternity and plus sizes.
Banana Republic. Acquired in 1983 with two stores, Banana Republic now offers sophisticated,
fashionable collections of dress-casual and tailored apparel, shoes and accessories for men and women at
higher price points than Gap. Banana Republic products range from apparel, including intimate apparel, to
personal care products. We also operate Banana Republic Factory stores, which carry a similar line of
products.
Forth & Towne. We opened the first stores of Forth & Towne in August 2005, targeting women over
the age of 35, to offer customers smart, fashionable clothing and accessories tailored to a range of lifestyles.
On February 26, 2007, we announced that, following a thorough assessment, we have decided not to move
forward with a full roll-out of Forth & Towne. While we were encouraged by the initial performance of
Forth & Towne, a thorough analysis revealed that the concept was not demonstrating enough potential to
deliver an acceptable long-term return on investment. We expect to close all 19 Forth & Towne stores
located in 10 U.S. markets by the end of June 2007.
We also offer products that are designed and manufactured by third parties in our new online shoe store:
Piperlime. We launched Piperlime in October 2006. Piperlime offers customers an assortment of the
leading brands in footwear for women, men and kids, as well as tips, trends and advice from leading style
authorities.
4