Gap Inc. Announces Global Expansion Plans

Continuing to deliver on its global growth plans, Gap Inc. (NYSE: GPS) today announced that it will introduce Gap brand to Paraguay and Hungary through new agreements with existing franchise partners Neutral for Paraguay and Gottex Brands for Hungary. Additionally, the company announced plans to open the first stand-alone Banana Republic stores in Mexico later this year.

By the end of 2013, Gap Inc. expects to have a presence in eight Latin American countries, including Chile, Panama, Colombia, Mexico, Uruguay, Paraguay, Peru and Brazil with expectations to add a brand presence in Costa Rica in the near future.

Paraguay

Gap Inc. has signed a new agreement with Neutral to open the first Gap store in Paraguay later this year. Neutral launched Gap in Uruguay in November 2012. "We look forward to bringing Gap’s distinctly American style to consumers in Paraguay where we have high brand awareness,” said Stefan Laban, SVP, Gap Specialty International. "Paraguay marks yet another important step for the company as we continue our growth into Latin American markets.”

Hungary

Gap Inc. will open its first two Gap stores in Budapest, Hungary through an existing relationship with Gottex Brands which is a part of the Trimera Group. Budapest offers an exciting platform for Gap Inc. to bring Gap’s casual American style and store experience to customers as it is one of the great international cities with a unique and youthful atmosphere as well as a high rate of tourism.

Mexico

Banana Republic will open the first free-standing store in Mexico in late 2013 through an existing agreement with retail partner Distribuidora Liverpool, S.A. DE C.V. Previously, Gap Inc. offered Banana Republic-branded merchandise in a franchise "store-within-a-store” concept at the Liverpool Department stores. This will be the first stand-alone Banana Republic store in Mexico and will provide a full product assortment and branded store experience to the local consumers.

Gap Inc. has significantly expanded the international reach of its brands since launching its first franchise operated store in 2006. Over the last six years, Gap Inc. has substantially grown its store base and currently has over 300 franchise stores across the world. Gap Inc. franchise stores can be found in 40 markets throughout Asia, Europe, Latin America, the Middle East and Australia.

Forward-Looking Statements

This press release contains forward-looking statements within the "safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements other than those that are purely historical are forward-looking statements. Words such as "expect,” "anticipate,” "believe,” "estimate,” "intend,” "plan,” "project,” and similar expressions also identify forward-looking statements. Forward-looking statements include statements regarding the following:

• Expected franchise store openings and timing;
• Global expansion strategies, including growth in Latin America.

Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause the company’s actual results to differ materially from those in the forward-looking statements.

These factors include, without limitation, the following:

• the risk that changes in general economic conditions or consumer spending patterns could adversely impact the company’s results of operations;
• the highly competitive nature of the company’s business internationally;
• the risk that the company or its franchisees will be unsuccessful in gauging apparel trends and changing consumer preferences;
• the risk that the company’s franchisees will be unable to successfully open, operate, and grow their franchised stores in a manner consistent with the company’s requirements regarding its brand identities and customer experience standards;
• the risk that the company’s franchisees will be unsuccessful in identifying, negotiating, and securing new store locations and renewing, modifying or terminating leases for existing store locations effectively;
• the risk that natural disasters, public health crises, political crises, or other catastrophic events could adversely affect the company’s operations and financial results;
• the risk that acts or omissions by the company’s third-party vendors, including a failure to comply with the company’s code of vendor conduct, could have a negative impact on its reputation or operations;
• the risk that the company will not be successful in defending various proceedings, lawsuits, disputes, claims, and audits; and
• the risk that changes in the regulatory or administrative landscape could adversely affect the company’s financial condition, strategies, and results of operations.

Additional information regarding factors that could cause results to differ can be found in the company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2013, as well as the company’s subsequent filings with the Securities and Exchange Commission.

These forward-looking statements are based on information as of June 3, 2013. The company assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

About Gap Inc.

Gap Inc. is a leading global retailer offering clothing, accessories, and personal care products for men, women, children, and babies under the Gap, Banana Republic, Old Navy, Piperlime, Athleta, and Intermix brands. Fiscal year 2012 net sales were $15.7 billion. Gap Inc. products are available for purchase in more than 90 countries worldwide through about 3,100 company-operated stores, over 300 franchise stores, and e-commerce sites. For more information, please visit www.gapinc.com.