How Gap is Buying Global Insurance by Peddling Apparel in 65 Countries

(MoneyWatch) 

It's entirely possible that the American brand on every global citizen's lips ?€" and hips ?€" will soon be the Gap (GPS). While other retailers and designers hedge their bets on e-commerce (we're looking at you H&M), team Gap is boldly forging ahead and offering international shipping from its online store to 55 countries. Stylish denizens of said locations including Australia, Brazil and Mexico, will be able to click to buy merchandise that's never been available outside the U.S.

Gap plans to up the ante by year end, making online shopping for all its brands (Althleta, Old Navy, Piperlime, Banana Republic) available in up to 65 countries. The best part? The San Francisco-based retailer is doing all this without reinventing the e-commerce wheel and only building fulfillment centers in the U.K. and Canada.

The powers that be at Gap sagely enlisted outside assistance for this enterprise. E-commerce experts at FiftyOne developed the Web architecture to support global sales. FiftyOne has the capability to process up to 43 different currencies and will ship Gap items to international customers from its facilities. The exception is in China, where Gap is collaborating with Shanghai Yi Shang Network Information Co. Ltd. to provide e-commerce starting this fall.

This comes during a time when Gap is investing heavily in its 1969 Premium Denim branding despite less-than-stellar sales. The company's net sales for June and July were up two and three percent respectively. But the company's got its eye on the positive: it has plenty of free cash flow, international sales were also up three percent in the second quarter -- a great gain considering last year those numbers were down five percent -- and online sales were up an even more encouraging 11 percent.

What's smartest about this move into global e-commerce though is the management's willingness to take a calculated risk and establish a presence in Asia where few American retailers have gone. Sure, Ralph Lauren (RL) is raising his profile there, but even so, Polo's ponies will be trotting forth in only eight countries. Meanwhile, look for Gap jeans to swathe the butts of shoppers in Brunei, India, Pakistan, Indonesia, and Nepal, among others.

Gap is showing every sign that it will continue on this aggressive path. If so, it won't be long before those sales gains are even more impressive.

Images via gap.com and Flickr user rubberpaw CC 2.0

Related:

• Bottoms Not Up Yet: Why Gap Should Stay the Course on Premium Jeans
• Ralph Lauren's Push into Asia is Already Paying Off