Gap ushered in the "takers" after the closing of stores and warehouses, will consumers turn back?

　　China News Service, November 11th (Zhongxin Finance and Economics Zuo Yuqing) The international trendy brand Gap, which has closed its stores successively in China to clear its warehouses, finally waited for the "receiver".

On November 8, Baozun E-Commerce Co., Ltd. announced that it would acquire Gap's Greater China business in an all-cash transaction, with an equity transaction consideration of US$40 million.

　　After this acquisition, can Gap win back the favor of consumers?

Baozun e-commerce acquires Gap Greater China business for US$40 million

　　"The clothing and fashion industry is changing rapidly, especially in the Greater China region." In the face of the store closures in the Greater China region, Gap China headquarters once responded.

After 12 years in China, the famous American fast fashion giant finally chose to leave the market and handed over its business in China to its partner, Baozun E-commerce.

　　According to information disclosed by Baozun E-commerce, the benchmark consideration for this equity transaction is US$40 million. Depending on the final adjustment of the agreement, the total transaction amount will not exceed US$50 million.

The acquisition, which is still subject to customary closing conditions and regulatory approvals, is expected to close in the first half of 2023.

Data map: GAP classic blue logo.

Photo by Xie Yiguan

　　At the same time, a number of Baozun affiliated companies have also reached a series of business agreements with Gap: Baozun has been exclusively authorized by Gap to produce, promote and sell Gap products in the Greater China region, and has the right to design products in China.

The relevant commercial agreement is for a period of 20 years, with an initial period of 10 years; it can be renewed twice for 5 years each.

　　This means that the design, production and sales of Gap in Greater China will be handed over to Baozun E-commerce.

　　"Greater China is still a market with huge potential for our brand, and we are committed to serving Chinese consumers for a long time." Mark Breitbard, president and CEO of Gap brand, said about this transaction.

Taking over Gap, can Baozun e-commerce revitalize the market?

　　In recent years, many international fast fashion brands have been losing ground in the Chinese market.

　　In addition to Gap being revealed to be considering selling its business in China in 2021, trendy brand giants such as H&M, Zara, and Uniqlo are also facing the dilemma of closing their stores. Zara's parent company, Inditex Group, has announced the complete closure of all offline Zara's three sister brands in China. Physical stores, only online channels are reserved.

　　Among them, in addition to the increasingly prominent domestic brand competitiveness, in the face of the rise of e-commerce and the inevitable trend of omni-channel integration, many established fashion giants can no longer easily capture the consumer psychology and behavior of consumers as in the past, so they are catching up On the track of the trend of young people, it seems "powerless".

Zara in a shopping mall in Beijing.

Photo by Zuo Yuqing

　　After Zara adjusted the brand tone to an environmentally friendly and fashionable home furnishing, Baozun E-commerce acquired Gap's Greater China business, which also provided another solution for the tide brand giants to "revitalize" the Chinese market.

　　According to public information, Baozun E-commerce was established in 2007. It is an e-commerce service provider specializing in providing IT solutions, store operation services, digital marketing services, customer service services, logistics services, data management and other services for brands and retail enterprises. enterprise.

　　Since December 2018, Baozun e-commerce has also been helping Gap to carry out digital innovation and accelerate the layout of e-commerce. It can be said that it has rich experience in e-commerce brand marketing.

　　At the same time, the acquisition of Gap also "coincides" with the transformation of Baozun e-commerce.

From the perspective of industry insiders, it is difficult for Baozun e-commerce to maintain growth only by operating its business on behalf of others. Brand management is the new way out for Baozun e-commerce.

　　Before Gap, Baozun has successively acquired some brands, and Gap's accumulated nearly 30 million members in China and its extensive brand awareness may be the important reason why Baozun is willing to "take over".

　　However, industry insiders also pointed out that Gap, as a cheap trendy brand, focuses on basic models and is highly substitutable. It is still unknown whether Baozun can market this "hot potato" well.

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