Personally, I think Gap is making a huge mistake by entering China. And they are compounding it by committing to full ownership of the assets on the ground.

What interested me is that Gap this time will adopt a somewhat bold operational strategy.

The article says, “Gap operates more than 300 stores outside of the U.S. It also has roughly 130 stores in 17 countries that are operated under franchise agreements, in which Gap provides the product and controls the look of the store but outsources local operations to a firm familiar with the country. Gap will own the China store. It will use Chinese-based companies to provide some services, such as distribution, but will manage the store itself. ”

It will certainly add a bit more cost to this initiative; however, this strategy might help Gap’s intent to “redesign its stores, for the first time in the brand’s 15-year history”. The article does not say which line, bargain vs. high-end, Gap will introduce to China. It is certainly wise to follow and see how their endeavor will pay off in the near future.