An employee calls a customer’s purchases at the Athleta store in New York.
Ron Antonelli | Bloomberg | Getty Images
It marks the brand’s first expansion into women’s sportswear outside of the United States. Gap said Athleta launches online in the Canadian market this summer, followed by retail stores opening in North York, Ontario and West Vancouver, British Columbia this fall.
The move is part of Gap’s overall strategy to grow Athleta to generate annual sales of $ 2 billion by 2023. Athleta passed the $ 1 billion mark last yearwith sales up 16% over 2019. Gap’s total sales in 2020 were $ 13.8 billion.
“International expansion is a key component of our growth strategy,” said Mary Beth Laughton, CEO and President of Athleta, in a statement.
The Athleta brand – like Lululemon and Nike – has been a beneficiary of the pandemic as more women seek comfortable clothing such as leggings, stretchy pants, tank tops and soft sweaters to wear at home during the health crisis. The Athleta banner provides a growth pocket for Gap as the Gap and Banana Republic brands of the same name are struggling to resonate with consumers.
Gap is well on its way to opening 20 to 30 Athleta stores across North America each year, adding to the 200+ locations it has today. It also said it will consider various wholesale partnerships and franchises when it comes to global growth. It already has a franchise and wholesale store for Athleta in the UK.
In Gap’s fourth quarter, Athleta sales in the same store were up 26% year over year. This was the biggest surge of the four brands, including Old Navy. Athleta is also Gap’s least promotional brand, which helps increase profits.
Gap could take some hurdles if it brings Athleta to Canada. Other U.S. retailers have stumbled upon the country in the past. aim All Canadian stores closed less than two years after they opened. Best buy has also closed many of its stores in the country.
Lululemon’s success there promises Athleta. Lululemon was founded in 1998 by Chip Wilson in Vancouver. The brand started out as a yoga studio and became a stand-alone business in 2000. The key for Athleta will be to determine if there is enough market share for that too.
Gap stocks are up more than 60% since the market closed on Monday. The company has a market capitalization of $ 12.2 billion.
– CNBCs Courtney Reagan contributed to this report.
WATCH LIVE: Mary Beth Laughton, CEO of Athleta, to join CNBCs “Power Lunch” Tuesday afternoon to discuss the brand’s announcement.