By Aimee Chanthadavong
Oroton Group plans to open up 20 Gap stores in the next 10 years in Australia and New Zealand after signing an exclusive franchise deal with retailer Gap Inc.
As part of the deal, Oroton will have the first right to develop Gap’s Banana Republic brand, as well as Old Navy if Gap decides to franchise the brand in Australia and New Zealand.
As part of the initial 10 year term, Oroton can operate free standing stores, department store shop in shops and clearance stores. The company will have the opportunity to operate local ecommerce site.
Oroton and Gap can also elect to enter into a 50/50 joint venture agreement for fair market value after five years in certain circumstances.
Gap will also have the option to purchase 100 per cent of the franchised business, which is may exercise any time after five years based on fair market value basis.
“The Gap Inc. brands are recognised around the world and the Gap brand already has a loyal customer base here through the existing stores and online,” said Oroton Group CEO and managing director Mark Newman.
“This partnership is an endorsement of our skills and expertise in managing premium international brands in our home country. We are looking forward to building on the existing by rolling out more stores and further strengthening the presence of the brand. We look forward to working with Gap Inc. to develop a long and successful partnership.”
Gap originally entered into the Australian market in 2010 with a previous franchisee that opened three stores at Westfield CBD, Sydney and Chadstone Shopping Centre and Melbourne Central in Melbourne. Oroton will operate these stores with immediate effect and expects to open the first additional stores by summer 2014.
“We are extremely excited to be partnering with Oroton Group who have demonstrated their ability to manage premium international apparel brands,” said Gap International senior vice president Stefan Laban.
“We look forward to working with them and continuing to grow Gap brand’s presence in Australia and New Zealand.”