US apparel retailer Gap Inc. is in talks with Flipkart-owned fashion e-tailer Myntra as it explores potential partnerships in India after ending a franchise pact with Arvind Lifestyle Brands Ltd (ALB) last year, said three people familiar with the development.
The business transition is a work in progress, the people cited above said seeking anonymity. Myntra declined to comment.
ALB had in September hired an investment bank to find a buyer for the Gap business, saying: “Due to circumstances post the corona pandemic, both companies agreed that a mutual termination was in both companies’ best interest.”
“Gap Inc. is evaluating potential partnerships to continue serving customers in India. Franchise partnerships are an important and cost-effective way to grow our Gap business. Through company-operated stores, e-commerce sites and franchise partners, the Gap brand reaches customers in about 40 countries,” a company spokesperson said in response to queries from Mint.
The company did not divulge details of potential suitors, but the people cited above said Myntra is a strong contender, but added that another suitor, a large apparel retailer, could also be eyeing the franchise.
Uncertainty over the brand’s expansion plans has seen two malls in Delhi in the process of shutting Gap stores. A third store in a mall in Delhi was shut after ALB sought closure last month. The retailer has nearly 20 stores in India.
Inventory in stores is also in short supply as a result of the transition, said a person familiar with the matter and one of the three cited above. “Gap is also quite popular in a lot of non-metros and an online play could work well for them,” the person said on condition of anonymity. The pandemic has changed the retail landscape, prompting retailers to look at a stronger online play as more first-time shoppers buy online.
