The San Francisco-based clothing giant has signed a letter of intent withÂ Arvind Ltd’s retail arm to form a JV in India, they said.
Founded in 1969 in San Francisco,Â Gap has more than 3,000 outlets in 90 countries. The company, which owns brands including Gap, Old Navy, Banana Republic, Piperlime and Athleta, sources more than $500 million worth of products from India each year.
J Suresh, MD of Arvind Brands, and Rajiv Malik, general manager of Gap‘s sourcing operations in India, declined comment. An email sent to Gap’s headquarters in the US to seek confirmation of the development didn’t elicit any response as of late on Thursday.
Entering India may help the US company claw back some of the ground it has lost to Inditex Group, which dislodged Gap as the world’s largest clothing retailer in 2008.
Inditex’s Zara label has succeeded in gaining ground in India, which it entered in 2010, with the brand expanding its presence across the country since then.
The development comes close on the heels of Gap‘s global rival Hennes & Mauritz AB getting approval from the Foreign Investment Promotion Board earlier this month for a wholly owned subsidiary in the country that will run its H&M stores.
The two companies already have a longstanding relationship â€” the US retailer has been buying denim from Arvind Ltd for several years, said the two people cited above.Â Arvind Brands markets various foreign labels such as Tommy Hilfiger, Calvin Klein and Lee in the country. It’s not clear what stakeÂ Gap will hold in the proposed joint venture. (Source:ET)