Gap Exiting Australia

The Gap is going home.

Gap Inc. will close its stores in Australia within the next six months. Its Down Under distributor, the Oroton Group, has been suffering from weak results and debt and is reportedly considering its options, including a possible sale, according to the Australian press.

The Oroton Group, which operates 70 luxury Oroton handbag and accessories stores across Australia, New Zealand and Malaysia, is cutting Gap loose because it wants to focus on its proprietary business.

The closure comes against a backdrop of struggling retail across the board. Total retail sales in the country in June rose 0.3 percent, according to the Australian Bureau of Statistics. Gap, meanwhile, faces ongoing problems of its own as it seeks to return to the growth path. Gap’s earnings are expected to be down in the latest fiscal year compared with the previous year.

Gap launched in Australia in 2010 through a franchise agreement with Brand Republic Pty. Ltd., and amid much fanfare, opening in Melbourne an 8,000-square-foot flagship on two levels.

Oroton until 2013 distributed Ralph Lauren and took over the distribution of Gap the same year.


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