In its second-largest acquisition, Amazon buys the company for $970 million.
E-commerce revenue is on track to hit $1.5 billion in 2011.
The day isn’t far off that annual web sales at Gap Inc. will hit $2 billion, the company says. But to hit that goal, which Gap expects to achieve as soon as 2014, the specialty apparel chain retailer will need to keep diversifying.
Within three years, Gap, No. 24 in the Internet Retailer Top 500, will generate annual e-commerce revenue of $2 billion while yearly operating income for Gap Inc. Direct, the company’s e-commerce unit, will hit $500 million, Toby Lenk, president of the direct division, told analysts today at Gap’s annual investor’s day meeting in New York.
Going forward Gap will expand its buy online and pick up in store program from about 25 Banana Republic stores to about 270 Banana Republic, Gap and Athleta stores by the end of the year. In 2012 the ship-to-store program will be expanded to include the Old Navy brand.
In 2011, Gap is on track to achieve web sales of about $1.5 billion, up about 15% from around $1.3 billion in 2010, the company says. Without going into detail, Lenk also told analysts that Gap is seeing a nice return on its investment in mobile commerce. “Given the rise in mobile shopping and the strength of the company’s new mobile commerce platform, conversion rates have tripled over the past year,” Lenk told analysts.
Gap will soon launch more stores for its Athleta and Piperlime e-commerce brands. As of now, Piperlime.com, which Gap launched in 2006, is only online. Gap purchased direct marketer Athleta in 2008. In North America Gap will open up to 50 Athleta stores by 2013, including 10 in 2011. Gap is also exploring a store concept for Piperlime, Lenk told analysts..