US clothing store Gap to set up in India

Gap is looking for growth in emerging markets as sales slow down at home

US clothing store Gap is bringing its brand to India with the aim of opening 40 outlets, and it will launch the first two stores early next year.

Gap's first two outlets will be in Mumbai and the capital Delhi - India's biggest and busiest cities.

Gap is partnering with Arvind Lifestyle Brand Limited, a subsidiary of Arvind Limited, which is one of India's largest textile companies.

The move comes as Gap reported 3% sales growth for the second quarter.

Slowing sales

Rivals such as Aeropostale recently reported a 13% drop in second quarter sales, while American Apparel said its same-store sales had fallen by 6% in the second quarter.

The clothing retailer currently has 231 Gap stores across Asia. And it aims to open an additional 110 stores this year, across China, Hong Kong and Taiwan.

In a statement, Steve Sunnucks, Global President for Gap said: "India is an emerging, vibrant market and an important next step in our global expansion strategy."

Young population

And the company is also hoping to benefit from India's demographic.

"More than half of India's population is under 25 and they are actively embracing fashion in today's retail environment," said Ismail Seyis, Vice President of Gap Global Franchise.

Gap isn't the only American company looking for opportunities in India, and banking on strong consumer spending from its population of more than 1.2 billion.

Last month online retailer Amazon said it will invest a further $2bn (£1.2bn) to boost its operations in India.

India's total e-commerce market was worth $13bn in 2013.

But online travel accounted for more than 70% of the transactions.