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After demonstrating its endurance during the COVID-19 pandemic, British clothes retailer Next has struck an agreement with Gap to handle the American brand’s business in the UK and Ireland. Gap will be able to keep a large presence in the United Kingdom and Ireland as a result of the agreement, after closing its stores in those markets earlier this year.
Beginning in 2022, the two companies will form a joint venture to run Gap’s e-commerce operation on the NEXT Total Platform, open Gap-branded Shop-in-Shops, and provide online customers with click-and-collect alternatives. At 08:42 GMT, Next’s stock was up 1.6 percent, bringing its year-to-date gain to 16.3 percent.
The collaboration follows initiatives by online retailers ASOS (LON: ASOS) and Boohoo to acquire fashion companies that have gone out of business in the United Kingdom and are no longer available on the high street. ASOS paid 265 million pounds to the administrators of Philip Green’s defunct Arcadia business for the Topshop, Topman, Miss Selfridge, and HIIT brands in February.
Boohoo acquired the Debenhams label from management in January for 55 million pounds, and the Dorothy Perkins, Wallis, and Burton brands from Arcadia administrators in February for 25.2 million pounds. Next will control 51% of the joint venture, with Gap owning the remaining 49%. Gap will have access to Next’s 500-store network in the United Kingdom and Ireland.
Next also sells its own brand as well as over 700 other fashion, home, and cosmetics brands online in over 70 countries. “Gap is partnering with Next … to amplify our omnichannel business and meet our customers in (the) UK & Ireland where they are shopping now,” said Mark Breitbard, CEO and President of Gap Global.
Next raised their profit expectation in July, owing to pent-up demand for adult clothing and warm weather, which helped it outperform sales projections.