San Francisco—While its Gap, Old Navy and Banana Republic brands are amid a repositioning, Gap Inc. today announced it bought the 32-unit Intermix specialty store chain for $130 million.
Intermix, which reportedly has sales of about $130 million a year, is known for its mixture of luxury brands as well as emerging designers all with a focus on high fashion (brands such as Yigal Azrouel, Herve Leger,Yves Saint Laurent, Brian Atwood, Rag & Bone, Jimmy Choo, etc.) Besides helping improve Gap Inc.’s bottom line, the acquisition gives the company a foray into the luxury marketplace which Gap Inc. has coveted for many years. Moreover, Intermix’ knack for trendspotting is already familiar to some of Gap Inc.’s buying team who have often shopped Intermix stores for trendspotting.
“Intermix has a distinctive position in this growing market with clear competitive advantage,” said Glenn Murphy, chairman/ceo of Gap Inc. “Their record of merchandising with a keen eye towards mixing multiple designer labels, complemented with exclusive product, is appealing to their loyal customers. This strategy reflects the strength of their brand vision and leadership team.”
International Expansion Planned?
Intermix is Gap Inc’s first addition to its portfolio of brands since its 2008 purchase of Athleta and Piperlime. Gap Inc. has boosted Athleta’s volume expanding from catalog into e-commerce and about 35 retail stores. The same kind of increases may be in store for Intermix as well.
According to Art Peck, president of Gap Inc.’s Growth, Innovation & Digital (GID) division, Intermix is likely to see its number of stores double with international expansion a definite possibility, too.
Khajak Keledjian, Intermix’ co-founder and chief creative officer, and Adrienne Lazarus, president, will continue in their positions, both based in New York. They will report to Peck.
“We’re thrilled to have found a partner that has the global scale and infrastructure required to support our vision for growth,” said Keledjian. “Gap Inc. shares many of our entrepreneurial roots, passion for innovation and customer experience. Together, we’ll continue to shape the future of retail by offering the most exciting fashion trends with the finest designers in the world.”
Rumors of the deal leaked out before the holidays after Good Partners, LLC, a private equity firm, decided to put its 40% stake in Intermix up for sale, freeing up the company’s investment banks to approach Gap.