Gap Inc. on Monday said that it has agreed to sell its Gap Greater China business to e-commerce solution provider Baozun, who will operate the company’s in-market site and stores under a franchise agreement.
The deal is an all-cash transaction with a primary consideration of $40 million, subject to adjustments within a limit of $50 million, according to a press release by Baozun. It is expected to close in the first half of 2023, and is subject to customary closing conditions and regulatory approval.
“Baozun will enable Gap brand to better connect with Chinese consumers across all channels,” Mark Breitbard, president and CEO of Gap Brand, said in a message to employees.
The sale of the business is a result of the company’s strategic review it began in the fall of 2020, and will allow the company to become a more asset-light, cost-effective model, according to Gap Inc.
Baozun has partnered with Gap Greater China since 2018. Breitbard said that Baozun has helped the apparel retailer achieve online growth and penetration in the market over the past four years.
“We are deeply committed to our customers in Greater China and know that it is a market with enormous potential for our brand,” Breitbard said in a statement. “The growth that we are unlocking through local partnerships with market experts like Baozun is allowing us to not only connect with new and existing customers, but to provide them with personalized, service-oriented experiences.”
Baozun provides companies with e-commerce capabilities in the region including IT solutions, store operations, digital marketing, customer services, warehousing and fulfillment to a variety of brands across eight categories. Other clients have included Calvin Klein, Zara, Guess and Nike.