The Gap 2011 Annual Report Download - page 10

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Customers can now experience our brands and touch our
products in 39 countries, up from just six countries in 2007.
To fuel our growth and scale the business further in coming
years, we made an organizational shift and established one
International division, led out of London. With other head-
quarter offices in Tokyo and Shanghai, this new structure
strikes a great balance of having experienced Gap Inc. execu-
tives from North America working alongside talented regional
hires to drive the business forward.
The franchise business continues to grow at a fast rate,
with a 45 percent increase in net sales year-over-year.
In 2011, we launched in eight new franchise countries,
including Chile, our first South American nation. We opened
the doors to more than 50 new Gap and Banana Republic
franchise stores, for a total of 227 by year end, on our way
to our target of 400 by 2014.
China, the world’s second largest apparel market, represents
a major component of our global growth strategy, building
momentum following our first store openings in 2010. With
a total of 14 stores now in China, including our Hong Kong
flagship that opened in November and new locations in
HangZhou and Tianjin, we expect to have a fleet of about
45 stores by the end of fiscal year 2012. Since launching an
ecommerce site last year, online orders have been logged
from over 330 cities in China.
Of our three established core brands, Old Navy is the only
one without a store presence beyond North America. After a
thoughtful planning process in 2011, that is about to change.
Old Navy is on track to expand outside North America with
its first company-owned store in Japan in mid-2012.
At the heart of our company, our people and our values set
us apart. These values were put to the test by the devastating
earthquake and tsunami that occurred in Japan on March 11.
In the midst of the emotional shock and physical destruction
of this tragedy, we went through the deliberate process of
ensuring that our 6,000 employees and their families were
safe. Once that was confirmed, we selectively opened stores
in communities that needed access to clothing, and donated
more than $1 million worth of clothing and five percent of
sales in Japan for a period of time to the recovery efforts.
Letter to Shareholders