Full Breakdown
Gap Pushes Ahead with China Store Expansion Amid Retail Pullback
8/11/2026, 10:57:38 AM
Core Expansion Plans
Gap intends to open 50 new stores across mainland China this year, targeting first-tier, second-tier and third-tier cities as well as the Tibet autonomous region. Baozun, which took over Gap’s mainland China, Hong Kong and Macau operations in early 2023, said in its first-quarter earnings report that 10 outlets were expected to open in the second quarter.
Localisation Strategy and Performance
Since the takeover, Gap has pursued a “China-for-China” localisation approach. The strategy coincided with the brand’s first quarterly profit in the fourth quarter of last year and a 20 percent same-store sales growth in China for the first quarter, the highest on record for the company.
Industry Context
The expansion comes as the world’s second-largest consumer market experiences sluggish retail sales. Competitors such as Zara and H&M have been reducing their store counts, while many foreign fast-fashion players are closing outlets in China.
Verbatim Quotes
- “To establish a solid footing in the current business environment, foreign companies must carry out radical and structural localisation,” — Wang Tianshi, an analyst at the Shanghai-based LeadLeo Research Institute
Outlook
Gap plans to re-enter the Hong Kong market by the end of the year, signaling confidence that deeper localisation can sustain growth despite broader market headwinds.
