Gap Inc. Expands International Presence with Franchise Agreements in Saudi Arabia and Turkey Franchisees to Open more than 100 Gap and Banana Republic Stores in These

Countries by 2012



    SAN FRANCISCO, June 13 /PRNewswire-FirstCall/ -- Gap Inc. (NYSE:   GPS)
 today announced separate franchise agreements with retailers in Saudi
 Arabia and Turkey to introduce the Gap and Banana Republic brands to those
 markets. Over the next five years, Gap Inc.'s franchise partners -- Fawaz
 Alhokair Group (Saudi Arabia), and Fiba Holding A.S. (Turkey) -- plan to
 open a combined total of approximately 90 Gap stores and 20 Banana Republic
 stores throughout Saudi Arabia and Turkey.
     The first Gap stores will open in each country by the end of this year,
 and the first Banana Republic stores are expected to open in each country
 by spring 2008. All stores are expected to be open by 2012.
     "Both Saudi Arabia and Turkey represent natural markets for Gap Inc. to
 expand its international presence," said Ron Young, senior vice president
 of international strategic alliances for Gap Inc. "Each of these countries
 has a strong, steadily growing economy, and consumers in these markets have
 a great interest in iconic apparel brands such as ours."
     Gap Inc. will leverage each franchise partner's local operational
 expertise, and will provide access to Gap and Banana Republic's clothing
 and accessories. In addition, each partner will hold exclusive rights to
 operate Gap and Banana Republic stores in their respective countries, will
 purchase merchandise from Gap Inc. or suppliers designated by Gap Inc., and
 must adhere to Gap Inc.'s quality standards to preserve the reputation of
 the Gap and Banana Republic brands. The franchise agreements were entered
 into separately between a subsidiary of Gap Inc., and each individual
 partner.
     "We're pleased to have forged relationships with such excellent local
 partners," continued Mr. Young. "In addition to strong operational
 expertise and a deep understanding of their local customer bases, Fawaz
 Alhokair Group and Fiba Holding A.S. both have track records of
 successfully introducing well-known fashion and apparel brands to
 international markets."
     Gap Inc. directly operates Gap brand stores in six countries and Banana
 Republic stores in three countries. Today's announcement follows
 previously-announced franchise agreements to open Gap and Banana Republic
 stores in Bahrain, Indonesia, Kuwait, Malaysia, Oman, Qatar, Singapore,
 South Korea and the United Arab Emirates.
     Forward-Looking Statements
     This press release contains forward-looking statements within the safe
 harbor provisions of the Private Securities Litigation Reform Act of 1995.
 All statements other than those that are purely historical are
 forward-looking statements. Words such as "expect," "anticipate,"
 "believe," "estimate," "intend," "plan," and similar expressions also
 identify forward-looking statements. Forward-looking statements include,
 without limitation, the company's intention to expand the Gap and Banana
 Republic brands via international franchising, Fawaz Alhokair Group's
 intention to grow the Gap and Banana Republic brands in Saudi Arabia, Fiba
 Holding A.S.'s intention to grow the Gap and Banana Republic brands in
 Turkey, and the timing and number of stores that are expected to open
 pursuant to the announced franchise agreements.
     Because these forward-looking statements involve risks and
 uncertainties, there are important factors that could cause the company's
 actual results to differ materially from those in the forward-looking
 statements. These factors include, without limitation, the following: the
 risk that our franchisees will be unable to successfully open, operate and
 grow the number of Gap and/or Banana Republic branded apparel and
 accessories stores planned for Saudi Arabia and Turkey; the risk that the
 company will be unsuccessful in gauging fashion trends and changing
 consumer preferences; the highly competitive nature of the company's
 business in the U.S. and internationally and its dependence on consumer
 spending patterns, which are influenced by numerous other factors; the risk
 that the company will be unsuccessful in implementing its strategic,
 operating and people initiatives; the risk that trade matters, events
 causing disruptions in product shipments from China and other foreign
 countries, or IT systems changes may disrupt the company's supply chain or
 operations; and the risk that the company will not be successful in
 defending various proceedings, lawsuits, disputes, claims, and audits; any
 of which could impact net sales, costs and expenses, and/or planned
 strategies. Additional information regarding factors that could cause
 results to differ can be found in the company's Annual Report on Form 10-K
 for the fiscal year ended February 3, 2007.
     These forward-looking statements are based on information as of June
 13, 2007, and the company assumes no obligation to publicly update or
 revise its forward-looking statements even if experience or future changes
 make it clear that any projected results expressed or implied therein will
 not be realized.
     About Gap Inc.
     Gap Inc. is a leading international specialty retailer offering
 clothing, accessories and personal care products for men, women, children
 and babies under the Gap, Banana Republic, Old Navy and Piperlime brand
 names. Fiscal 2006 sales were $15.9 billion. Gap Inc. operates more than
 3,100 stores in the United States, the United Kingdom, Canada, France,
 Ireland and Japan. In addition, Gap Inc. is expanding its international
 presence with franchise agreements for Gap and Banana Republic in Asia and
 the Middle East. For more information, please visit gapinc.com.
      Investor Relations:
      Evan Price, 415-427-2161
 
      Media Relations:
      Greg Rossiter, 415-427-2360; or
      Robin Carr, 415-427-2864
 
 

SOURCE Gap Inc.

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