By the start of next year six Gap outlets will shut after troubled handbag retailer Oroton Group announced plans to end its joint venture with the US brand.
After conducting an ongoing strategic review of its business, Oroton Group which owns the Gap franchise in Australia, gave weak retail demand as a reason for ending its relationship with Gap in the country.
Oroton Group CEO Ross Lane said, ‘For the dedication and substantial efforts to develop the Gap business in Australia over recent years, the Board thanked the entire Gap Australia and Gap team‘. Oroton Group also acknowledges the support and cooperation that it has received from Gap amending existing arrangements.
Through a franchise agreement with Brand Republic, Gap entered the Australian market in 2010. The group continues to work through the closure details with Gap, and says it is too early to relay the financial impact but admits the decision will terminate the Group’s future investment in the franchise, limiting related future losses.
It also stated that it was continuing to pursue options including a sale, recapitalization or a refinancing of debt. The Board notes that there is no certainty that this process will result in a proposal or transaction for Oroton Group, nor what the terms of any such proposal or transaction would be.