Gap Inc. and Next plc have announced an agreement which allows Next to manage Gap’s UK and Ireland businesses. Next will become a franchise partner.
The agreement allows the companies to form a joint venture. Next will operate Gap’s online shop-in-shops and Gap-branded e-commerce sites in retailers, as well as offer click-and collect services to online customers. This partnership will be active from 2022.
Next plc will own 51 percent, Gap Inc the remainder.
Gap Global CEO Mark Breitbard stated that Next, a leading UK online clothing retailer, is now partnering with Gap to increase its omnichannel business. He also said that Next will meet Gap’s customers in Ireland and the UK where they are shopping right now.
Strategic reevaluation
This announcement follows Gap’s recent decision to close all its Uk/Ireland stores in order to concentrate on an online-only strategy. This is part of Gap’s ongoing exploration of cost-effective ways to keep the company in these two markets.
The company’s major hit from the pandemic left it in a difficult position. To buy back its debt, the company sold a 1.5 billion-dollar junk bond.
This partnership is part Gap’s strategic review on its European operations. It was published as a report in October 2020. Gap hopes to grow its operations by using a more efficient partnership model and Next’s expertise in omnichannel platforms, e-commerce.
Simon Wolfson, Next CEO, stated that Next is thrilled to have its Total Platform support Gap in the next phase of their brand’s development in the UK/Ireland.
Gap joins Next’s international roster of more than 700 fashion, home, and beauty brands that it sells through its ecommerce platform.
