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Gap to bring the Athleta brand, home of rival Lululemon, to Canada

An employee calls a customer’s purchase at the Athleta store in New York.

Ron Antonelli | Bloomberg | Getty Images

Gap Inc. announced on Tuesday plans to sell the Athleta brand in Canada, home of Lululemon.

This shows that women’s athletic apparel brands were the first to expand outside the United States. Athleta will be available online in the Canadian market later this summer, followed by retail stores in North York, Ontario and West Vancouver, British Columbia, according to Gap.

This move is part of Gap’s overall strategy to grow Athleta to generate $ 2 billion in annual net revenue by 2023. Athleta surpassed $ 1 billion last year, with sales up 16% from 2019 levels. Gap’s total sales in 2020 reached $ 13.8 billion.

“International expansion is an important element of our growth strategy,” Athleta CEO and President Mary Beth Laughton said in a statement.

The Athleta brand is similar to its peers Lululemon and Nike, as more and more women are looking for comfortable clothing such as leggings, elastic pants, tank tops, and soft pullover sweaters to wear at home during a health crisis. Benefits from the pandemic. For Gap, the Athleta Banner provides a pocket for growth as its Gap brand of the same name and Banana Republic struggle to resonate with consumers.

Gap plans to open 20-30 athleta stores each year across North America, adding to more than 200 locations today. He also said he would consider various wholesale partnerships and franchise stores in anticipation of global growth. We already have a franchise model and wholesale business for Athleta in the UK.

In the fourth quarter of Gap, Athleta’s same-store sales grew 26%, the largest increase among the four brands, including Old Navy. Athleta also has the least publicity of the Gap brand and helps to increase profits.

Indeed, Gap can face hurdles when taking Athleta to Canada. Other American retailers have stumbled in the area in the past. Target closed all Canadian stores within two years of opening them. Best Buy has also closed many stores in the country.

Lululemon’s success there gives Athleta a promise. Lululemon was founded in 1998 by Chip Wilson in Vancouver. The brand started as a yoga studio and became an independent store in 2000. Athleta’s key is to determine if it has sufficient market share.

As of Monday’s closing market, gap share has risen by more than 60% year-to-date. The company has a market capitalization of $ 12.2 billion.

-CNBC Courtney Reagan Contributed to this report.

Watch Live: Athleta CEO Mary Beth Laughton Joins CNBC “Power lunch” We will discuss the brand announcement on Tuesday afternoon.

Gap to bring the Athleta brand, home of rival Lululemon, to Canada

Source link Gap to bring the Athleta brand, home of rival Lululemon, to Canada

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