Gap Stores is What Amount of Gap Stock?

December 3rd, 2010 by Trefis Team

Gap (NYSE: GPS) is one of the largest apparel retailers in the US with about 8% market share of a highly fragmented US retail apparel industry. Gap competes with other specialty retailers like Aeropostale (NYSE:ARO), Abercrombie & Fitch (NYSE:ANF), J.Crew Group (NYSE:JCG) and Urban Outfitters (NASDAQ:URBN).

Most of Gap’s business is based in the US, which accounted for about 80% of its total revenues in 2009. However, the company has plans to grow its business outside the US, mostly through its franchise business.

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What percent of Gap’s Stock Value Comes from Gap Stores operations?

A.  13% B.  27% C.  35% D.  48% E.  58%

Make a selection above to see the answer…

Gap Stores Operations

Gap recently reported a 5% year-over-year increase in comparable sales for its North American Gap stores during November 2010, pointing towards a potential recovery in consumer retail spending. [1] Continued growth could boost revenue per square foot at Gap stores, for which we currently estimate a 4% CAGR between 2010 and 2013. Drag the trend line in the chart below to examine the impact of your own projections.

The company has been gradually reducing the number of Gap stores amid falling demand for Gap branded products since 2001. Only 20% of Gap stores are located outside North America, although the company plans to increase its international presence in the years ahead. We expect the number of Gap stores to increase modestly going forward. The chart below examines the sensitivity of Gap’s stock value to the number of Gap stores in operation.

We currently have a $33.87 price estimate for Gap. To see our full estimate click here.

Notes:
  1. See Gap Inc. November Sales Press Release [↩]