The Gap 2013 Annual Report Download - page 26

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Athleta. Acquired in September 2008, Athleta is Gap Inc.’s premier fitness and lifestyle brand in the rapidly
growing women's active apparel market. Athleta offers high-quality, stylish, and functional apparel, footwear, and
accessories across a wide variety of sports and fitness activities, including crossover apparel and casualwear.
Customers can purchase Athleta products online, in stores, and through catalogs.
Intermix. Acquired in December 2012, Intermix is known for its tasteful mixing of luxury and contemporary
fashion and offers the most coveted existing and up-and-coming designer brands. In addition to its array of
seasonal must-haves, Intermix also offers exclusive designer product. Customers can shop in stores in the
United States and Canada, and online.
All sales to customers are tendered for cash, debit cards, credit cards, or personal checks. We also issue and
redeem gift cards through our brands. Gap, Banana Republic, and Old Navy each have a private label credit card
program and a co-branded credit card program through which frequent customers receive benefits. Private label
and co-branded credit cards are provided by a third-party financing company.
The range of merchandise displayed in each store varies depending on the selling season and the size and
location of the store. Stores are generally open seven days per week (where permitted by law) and most holidays.
We ended fiscal 2013 with 3,539 Company-operated and franchise store locations. For more information on the
number of stores by brand and region, see the table in “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” included in Part II, Item 7 of this Form 10-K.
Certain financial information about international operations is set forth under the heading "Segment Information"
in Note 17 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K.
Merchandise Vendors
We purchase private label and non-private label merchandise from over 1,000 vendors. Our vendors have
factories in about 40 countries. No vendor accounted for more than 5 percent of the dollar amount of our total
fiscal 2013 purchases. Of our merchandise purchased during fiscal 2013, approximately 98 percent of purchases,
by dollar value, were from factories outside the United States, while the remaining 2 percent of all purchases were
from domestic factories. Approximately 28 percent of our purchases, by dollar value, were from factories in China.
Product cost increases or events causing disruption of imports from China or other foreign countries, including the
imposition of additional import restrictions or vendors potentially failing due to political, financial, or regulatory
issues, could have an adverse effect on our operations. Substantially all of our foreign purchases of merchandise
are negotiated and paid for in U.S. dollars. Also see the sections entitled “Risk Factors—Our business, including
our costs and supply chain, is subject to risks associated with global sourcing and manufacturing," "Risk Factors
—Risks associated with importing merchandise from foreign countries, including failure of our vendors to adhere
to our Code of Vendor Conduct, could harm our business,” and “Risk Factors—Trade matters may disrupt our
supply chain” in Item 1A of this Form 10-K.
Seasonal Business
Our business follows a seasonal pattern, with sales peaking over a total of about eight weeks during the end-of-
year holiday period.
Brand Building
Our ability to develop and evolve our existing brands is a key to our success. We believe our distinct brands are
among our most important assets. With the exception of Piperlime and Intermix, virtually all aspects of brand
development, from product design and distribution to marketing, merchandising and shopping environments, are
controlled by Gap Inc. employees. With respect to Piperlime and Intermix, we control all aspects of brand
development except for product design related to third-party products. We continue to invest in our brands and
enhance the customer experience through significant investments in marketing, enhancement of our online
shopping sites, international expansion, remodeling of existing stores, and continued focus on customer service.