insiderblmUK retailer Next and struggling US fashion giant Gap have formed a joint venture that will see Next manage Gap’s UK website and place concessions in some stores.
The move will preserve some of Gap’s physical presence on the high street following plans by Gap to close all 81 stores in the UK in July.
It is a similar deal to one signed with clothing brand Reiss earlier this year.
Next is also expanding the brands available on its online platform.
Its “Total” platform allows it to run other fashion brands’ e-commerce operations, including customer service, payment systems and logistics and currently also hosts the Victoria’s Secret and Childsplay Clothing brands.
Shares in Next rose 2.5% to £81.98 on the news by Friday afternoon.
Next will own 51% of the new venture, while Gap will own 49%. The deal will enable customers to use Next’s click-and-collect service at its 500 stores.
Gap Global’s chief executive Mark Breitbard said: “Gap is partnering with Next one of the UK’s leading online clothing retailers, to amplify our omnichannel business and meet our customers in UK & Ireland where they are shopping now.”
According to Natalie Berg, a retail analyst and founder of NBK Retail, the deal is Gap’s “best shot” at reviving its brand.
“The Gap brand might have lost its way but it’s still a brand with a lot of heritage,” she told the BBC. “The uncomfortable truth is that they had way too many stores.
“What Next is doing featuring it, as a shop within a shop, does generate excitement and make consumers want to go into the store.”
She says it is ironic to see Next and Gap teaming up, when they are both middle-tie High Street brands who have competed for years over the same demographics of shoppers.
“The pandemic has created strange bed fellows – who would have thought next and gap would have come together a few years ago?”
