Oroton plumps up labels with US deal
The new partnership follows a similar regional licensing deal by Oroton in August to bring Brooks Brothers to Australia, with the new brands to help cover a hole punched in Oroton's earnings this year after the loss of its Ralph Lauren licence.
Oroton said it had secured an exclusive franchise agreement with Gap in Australia and New Zealand, with Oroton gaining the first right to develop the Banana Republic brand and Old Navy should Gap decide to franchise the retail concept in the region.
The Gap deal will be for an initial 10 years, with an option to renew for a further 10. Oroton will be able to operate Gap from free-standing stores, department stores or clearance stores as well as a local e-commerce site.
Oroton and Gap may elect to enter a 50-50 joint venture for fair market value after five years, while Gap has the right to buy 100 per cent of the local franchise back any time after five years. It is planned Oroton will open up to 20 Gap stores over the next 10 years.
"This partnership is an endorsement of our skills and expertise in managing premium international brands in our home country," Oroton boss Mark Newman said.
"We are looking forward to building on the existing business by rolling out more stores and further strengthening the presence of the brand."
Stefan Laban, senior vice-president Gap International, said Oroton had demonstrated its ability to manage premium international apparel brands.
In August, Oroton unveiled a shock profit downgrade, partly due to the removal of Ralph Lauren from its stable, which sent its shares tumbling 10 per cent. Its deal with Brooks Brothers will help plug some of that earnings gap, with Oroton unveiling plans for up to 25 stores by 2019. Shares closed down 4¢ at $5.40 on Thursday.
Frequently Asked Questions about this Article…
Oroton has signed a deal with US apparel chain Gap Inc. to potentially open 20 Gap stores in Australia and New Zealand over the next 10 years. This includes the possibility of introducing other Gap brands like Banana Republic and Old Navy to the local market.
Oroton has signed a deal with US apparel chain Gap Inc. to open up to 20 Gap stores in Australia and New Zealand over the next 10 years. This partnership also allows Oroton to potentially introduce other Gap brands like Banana Republic and Old Navy to the local market.
The partnership with Gap allows Oroton to expand its brand portfolio and fill the earnings gap left by the loss of its Ralph Lauren license. It also strengthens Oroton's position in managing premium international brands in Australia and New Zealand.
The partnership with Gap is expected to strengthen Oroton's business by expanding its store presence and diversifying its brand offerings. This move comes after Oroton lost its Ralph Lauren license, which had impacted its earnings.
The franchise agreement between Oroton and Gap is initially set for 10 years, with an option to renew for another 10 years. Oroton has the exclusive rights to operate Gap stores in Australia and New Zealand, and may also develop the Banana Republic and Old Navy brands if Gap decides to franchise them in the region.
The franchise agreement between Oroton and Gap is initially set for 10 years, with an option to renew for another 10 years. Oroton has the exclusive rights to operate Gap stores in Australia and New Zealand.
Yes, Oroton and Gap have the option to enter a 50-50 joint venture for fair market value after five years. Additionally, Gap has the right to buy back 100% of the local franchise any time after five years.
Yes, Oroton has the first right to develop the Banana Republic and Old Navy brands in Australia and New Zealand if Gap decides to franchise these retail concepts in the region.
Oroton plans to operate Gap stores through various formats, including free-standing stores, department stores, clearance stores, and a local e-commerce site.
After five years, Oroton and Gap may choose to enter a 50-50 joint venture for fair market value. Additionally, Gap has the option to buy back 100% of the local franchise at any time after five years.
The loss of the Ralph Lauren license led to a significant earnings gap for Oroton, resulting in a profit downgrade and a 10% drop in its share price. The new deals with Gap and Brooks Brothers aim to mitigate this impact.
Oroton's shares experienced a decline, closing down 4 cents at $5.40, following a profit downgrade announcement in August due to the loss of its Ralph Lauren license.
In addition to Gap, Oroton has secured a regional licensing deal to bring Brooks Brothers to Australia, with plans to open up to 25 stores by 2019.
In addition to Gap, Oroton has a regional licensing deal to bring Brooks Brothers to Australia, with plans to open up to 25 stores by 2019.
Following the announcement of the Gap deal and the previous profit downgrade, Oroton's shares closed down 4 cents at $5.40 on Thursday.
Oroton's CEO, Mark Newman, stated that the partnership with Gap is an endorsement of Oroton's skills in managing premium international brands and expressed excitement about expanding the brand's presence through more store openings.
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