Almost two years in India, and Gap appears to still be a newcomer. The US fashion giant came to India through a franchise agreement with Arvind Lifestyle. Gap has taken up some of the most expensive slots in malls across the country and runs a total of 11 stores. A big problem is that costs are high but returns are way below what the brand hopes to muster.

It is not that Gap products are too expensive. Gap prices start at Rs 800 while the entry point at H&M is Rs 1,500 a piece. But when one compares the average stock pricing of all the brands, Gap is priced 50 per cent higher than H&M and Zara. Gap is thinking of a 10 to 15 per cent cut in prices to help move the merchandise faster. Arvind is working with Gap’s sourcing team to increase production from India to avoid hefty import duties. Gap has also started selling online, which will probably give it an edge over Zara and H&M, which do not sell online as yet in the country.

Gap is an American multinational for clothing and accessories, founded in 1969. It sells under the brand names of Gap, Banana Republic, Old Navy, Athleta and Intermix.