Athleta, the women's activewear catalog acquired by Gap Inc. in 2008, is reportedly “registering strong growth,” fueled by increased catalog circulation as well as cross-selling opportunities by being linked to its parent's other websites: Gap, Banana Republic, Old Navy and Piperlime. Gap Inc. Direct President Toby Lenk told analysts at Gap’s annual investors day meeting last week that while the company finished integrating Athleta in 2009, 2010 “has been about continuing to drive growth.”
He also said that after testing a “small lab store” outside San Francisco, the first Athleta full-scale prototype will open in the city in January.
Lenk said the test “has gone very well,” indicating that sales per square foot productivity “has been very, very, very good; very attractive.”
“Also, importantly, we measured the catchment of demand for people living in the Marin area,” said Lenk. “And for every $1 of direct revenue we were capturing in the Marin area, we actually got another $4 from the lab store, with very little cannibalization of the direct. So those are very, very interesting results.”
Looking to 2011, Lenk said Athleta will bolster its performance product offerings with continued focus on feminine styling.
“We're going to maintain our authority in performance product products, swim and active lifestyle product as well,” said Lenk. “We're actually a very broad lifestyle brand as well as a very good performance brand. We're going to continue to drive growth with catalog circulation and Universality cross-selling.”
He said the opening of a full prototype in January “will allow us to really fully and finally assess how much the customer wants to engage with us in a real estate format. So, stores may be a part of the brand's future. We're not prepared to say anything specific today. But if we do roll out stores, rest assured we're going to do it in a very unique and high quality way, consistent with the special nature of the Athleta brand.”
Overall, Gap officials said they are counting on European expansion and the acquisition of Athleta to help the chain double annual Web sales to $2 billion by 2014 and use its Web channel to generate $500 million in yearly operating income. Gap also plans to benefit from adding new lines of merchandise to PiperLime.com such as more apparel, exclusive collections and men’s fashion.
International and online sales are expected to account for 25% of revenue by fiscal 2013. In 2009, those areas generated 12% of revenue.
