Gap (NYSE:GPS) Seeks Zalando (OTC:ZLDSF)’s Help


Gap (NYSE:GPS) has done itself a favor by engaging in a collaboration with Zalando (OTC:ZLDSF). The largest online fashion retailer in whole of Europe, Zalando (OTC:ZLDSF) will help Gap (NYSE:GPS) by accessorizing it’s sales from next May. This is in the hopes of reaching potential customers, with special focus on locations where Gap (NYSE:GPS) doesn’t have a store.

Gap (NYSE:GPS) is an American company that has a delivery network of 24 European countries and boasts over 200 stores in various prime locations. However, there still are several places where it lacks in terms of physical presence.  Germany is one such example where Gap (NYSE:GPS) doesn’t feature.

Zalando (OTC:ZLDSF) is based in Berlin and has succeeded at making it into the Frankfurt stock exchange. The company started off with selling shoes in 2008. It now has 1,500 brands that it ships to customers in 15 European countries. Quite recently, Top Shop has added itself as a brand to the illustrious list that Zalando (OTC:ZLDSF) provides its services to. Top Shop is one of the most sought out British brand, which succeeded in surviving the great recession that engulfed European business hubs.

Even though, Gap (NYSE:GPS) is quite a prolific brand and has a strong hold in the US, it hasn’t been able to make a strong impression in Europe. According to Zalando (OTC:ZLDSF)’s co-founder, David Schneider; several European based customers still don’t have a reach to the illustrious Gap (NYSE:GPS) brand. If Gap (NYSE:GPS) deploys Zalando (OTC:ZLDSF)’s services, the fashion brand will be able to enter 15 global markets in native languages, with the facility to procure in local languages, with free of charge shipments, yield and several other services. Hence Gap (NYSE:GPS) will go wherever Zalando (OTC:ZLDSF) has garnered its anchor in Europe.

Gap (NYSE:GPS) is looking at potential expansion strategies, as it is quite limited in terms of reach to consumers who would gladly buy a Gap (NYSE:GPS) product, if they can get their hands on one. Currently, it has quite a limited scope and locales. It is heavily dependent on the North American market, which is filled with rival brands entering in to the market on frequent than usual basis. The company has over 3,500 stores worldwide, with most located in the US. The company is now planning to open 40 stores in India. Gap (NYSE:GPS) has illustrious plans of improving its e-commerce site to draw potential sales on that front.

The Digital business lead, Art Peck is expected to take the office of chief executive in February, next year after his segment sales went up 21% in fiscal 2013, that totaled to $2.3 billion. This makes 6% of total sales.

Brand rivals, such as Inditex and H&M are also working to improve their websites. Gap (NYSE:GPS) wants to place itself closer to its customers through Zalando (OTC:ZLDSF). A total of 30% increase in sales is expected in German sales by 2020 through e-commerce.

After collaboration with Zalando (OTC:ZLDSF), Gap (NYSE:GPS) plans to form another merger to service its sales.