Gap to expand in RP

NEW YORK — Clothing retailer Gap Inc. said on Tuesday that it had reached a deal with wholesaler Rustan Group of Companies to open stores in the country.

The San Francisco-based company said it would open about eight Gap stores and four Banana Republic stores around the Philippines.

The first Gap store is expected to open by year’s end, while Banana Republic will open next spring, the company said.

Gap said it would select suppliers for the stores, while the Rustan Group will operate them and stock their shelves.

In all, the company plans to open eight Gap and four Banana Republic stores in the Philippines by 2012.

“The Philippines represents a natural market for Gap,” said Ron Young, the company’s vice president for international strategic alliances. “The country has a strong, steadily growing economy, and consumers in this market have a great interest in iconic apparel brands.”

Gap, which also runs Old Navy, has similar franchise agreements in 11 countries throughout the Middle East and Asia.

The retailer has been struggling to correct slumping sales at Gap and Old Navy, whose stores and merchandise analysts have said need makeovers to entice shoppers.

Gap has also seen market share erode to a host of competitors, including Kohl’s Corp. and Target Corp.