The Gap Inc. (GPS) Is Playing its Cards Right

With improved product performance and continued international expansion, the ubiquitous clothing retailer has done well this year, as its February net sales surged 11% to $966 million. Its comparable sales jumped 3%, which inspired The Gap Inc. (NYSE:GPS) to push its boundaries further.

Since venturing into China in 2010, Gap has been rapidly expanding in the country, and opened stores in six new locations last month. From the latest announcement, it has become apparent that the company now plans to make its presence felt in Brazil, with its stores opening at the end of this fall.

And not just this, there is good news for the Japanese customers as well, as The Gap Inc. (NYSE:GPS) plans to open 20 Old Navy stores in Japan this year. It has already successfully established 140 Gap and 35 Banana Republic stores in Japan, and plans to expand itself further.

The Gap Inc. (NYSE:GPS) also seems to be giving quite a tough time to many a renowned brands, and reeling under its pressure is none other than Lululemon Athletica inc. (NASDAQ:LULU) . Lululemon was already facing severe criticism from its customers for the ‘too sheer’ women’s yoga pants blunder, and was forced to recall 17% of the production when The Gap Inc. (NYSE:GPS)’s Athleta came into the market with a bang.

Of late, the Athleta chain has been opening stores near Lululemon Athletica inc. (NASDAQ:LULU) locations and undercutting the yoga retailer on prices. Lululemon’s famous $98 yoga pants are feeling the heat as Athleta has come up with a wider range of yoga pants for just $69. To earn an extra edge, Athleta has taken the eminent yoga classes of the Lululemon Athletica inc. (NASDAQ:LULU) stores a notch higher by organizing fitness events, such as interval training and running clubs along with yoga.

Another factor that has taken Athleta one step up on the competitive ladder is its service. It pampers its customers with frequent clearance sales and a vast range of products made available at comparatively moderate prices. It surely knows how to make its customers happy, allowing them to return any product at any time and for any reason. And this clearly explains why Athleta’s customers have been pouring their hearts out on it.