From Transformation to Growth: GAP China Enters a New Chapter

Three years ago, BBM embarked on a new chapter with GAP China—one built on a simple belief: global brands can thrive in China when they combine the strength of their heritage with a deep understanding of local consumers.

Today, that belief has been validated.

As part of Baozun Group’s 2025 results, GAP China achieved an important milestone: its first profitable quarter and a return to sustained growth. The achievement comes alongside a landmark year for Baozun (NASDAQ: BZUN；HK: 09991), which delivered RMB 9.9 billion in annual revenue, returned to profitability, and generated operating cash flow of RMB 420 million, more than tripling year-over-year. In the fourth quarter alone, Group revenue reached RMB 3.2 billion, up 6% year-over-year, while BBM continued its strong momentum with revenue growth of 24%.

For BBM, GAP’s progress is more than a financial milestone. It is a story about transformation, localization, and building a brand that feels both globally authentic and locally relevant.

A New Chapter for an Iconic Brand

Few brands carry the heritage of GAP.

For decades, the brand has been synonymous with American casual style—timeless denim, classic fleece, and effortless everyday essentials. The opportunity for BBM was never about changing what made GAP iconic. Instead, it was about bringing that heritage closer to the lives of Chinese consumers.

As Baozun Group Chairman and CEO Vincent Qiu often describes it, the goal was to create the perfect blend between global brand equity and local market understanding.

Or as GAP China CEO Ken Huang puts it: “harmony through complementarity.”

That philosophy became the foundation of GAP China’s growth journey and shaped every major decision across the business.

Three Pillars of Growth: Merchandising, Marketing and Channels

The transformation was built around three interconnected pillars: Merchandising, Marketing, and Channels.

Merchandising: Moving at the Speed of the Consumer

In today’s retail landscape, speed matters.

To better serve local consumers, BBM built a more agile operating model connecting supply chain, product development, and channel planning into a single ecosystem.

The result is a faster and more responsive business. New product development cycles can now be completed in as little as six weeks, while successful products can be replenished within two weeks.

At the product level, GAP China developed a balanced approach that combines approximately 70% locally developed products with 30% global classics. This allows the brand to stay true to its heritage while introducing products that reflect local lifestyles, preferences, and everyday occasions.

The outcome is a product offering that feels unmistakably GAP, while resonating more

deeply with Chinese consumers.

Marketing: Creating Meaningful Connections

While product creates relevance, brand storytelling creates connection.

Over the past three years, GAP China has continued to celebrate its American roots while finding new ways to engage local audiences.

The brand strengthened its presence through partnerships with actor Cheng Yi, participation in cultural events such as Strawberry Music Festival, and collaborations with local creative and cultural IPs. Each initiative was designed not only to increase visibility, but to create conversations that connect the brand with contemporary Chinese culture.

At the same time, GAP remained focused on the values that have defined the brand globally for generations: optimism, inclusivity, individuality, and self-expression.

The result has been a stronger emotional connection with consumers and growing relevance among younger generations.

Channels: Expanding with Purpose

Growth requires visibility, accessibility, and consistency.

In 2025, GAP opened 29 new stores across China, bringing its total store network to 164 locations.

BBM’s dual approach of directly operated stores and partnership stores enabled the brand to strengthen its presence in major metropolitan markets while expanding into emerging growth cities across the country.

From flagship locations that showcase the full brand experience to stores that bring GAP closer to new communities, every opening contributes to a broader vision of sustainable nationwide growth.

Looking ahead, GAP plans to open approximately 50 additional stores in 2026 and re-enter the Hong Kong market, further accelerating its expansion journey.

The Power of an Integrated Platform

One of BBM’s unique advantages lies in its connection to Baozun’s broader ecosystem.

Through years of supporting leading global brands across e-commerce, digital marketing, and technology solutions, Baozun has built deep expertise in understanding consumer behavior and navigating China’s rapidly evolving retail landscape.

These capabilities create a powerful advantage for BBM brands.

Consumer insights, category trends, digital tools, and marketing intelligence are continuously translated into actionable decisions across product planning, customer acquisition, and channel management.

A strong example came during the 2025 “618” shopping festival. As one of the first verified partners within the Xiaohongshu and Tmall collaboration ecosystem, Baozun helped participating brands achieve more than 300% year-over-year growth in Xiaohongshu media investment, generating over RMB 300 million in GMV through integrated social commerce initiatives.

For brands like GAP, this creates a valuable bridge between consumer insights and execution—helping teams move faster, make better decisions, and deliver more relevant experiences.

Reimagining People, Product and Experience

Behind every successful transformation is a strong team.

BBM built a fully localized organization across design, merchandising, marketing, retail operations, and channel management, empowering teams closest to the market to make faster and more informed decisions.

This local agility has been instrumental in helping GAP respond quickly to changing consumer needs while maintaining consistency with its global brand vision.

At the same time, the brand continued to invest in immersive retail experiences. Flagship stores such as GAP’s Nanjing West Road location in Shanghai have become destinations for families, communities, and consumers seeking more than a traditional shopping experience.

Together, these efforts have translated into tangible business results.

In the fourth quarter of 2025:

• GAP China’s gross margin increased to 52.1%

• Gross margin improved by 170 basis points year-over-year

• Inventory turnover days improved by 16% to 114 days

• Comparable store sales achieved positive growth for three consecutive quarters

• GAP China delivered its first profitable quarter under BBM ownership

These results are not only indicators of operational excellence—they are evidence that a globally recognized brand can continue to evolve and grow when supported by the right local strategy.

Beyond GAP: Building a Portfolio of Global Brands

The experience gained through GAP is already helping shape the next chapter of BBM’s brand portfolio.

Among them is Hunter, the iconic British heritage brand known for its Original Wellington Boot and distinctive outdoor lifestyle positioning. Since joining BBM, Hunter has continued to strengthen its presence in China, expanding its retail footprint and deepening its connection with local consumers through a premium, lifestyle-driven approach.

In 2025, Hunter opened five new stores across high-potential cities including Nanjing, Qingdao, Shenyang, and Taiyuan, further extending the brand’s reach beyond traditional Tier 1 markets. While maintaining its British heritage and outdoor DNA, Hunter is building a localized growth strategy that reflects evolving consumer interest in outdoor living, functional fashion, and lifestyle experiences.

Together, GAP and Hunter demonstrate BBM’s long-term vision: helping global brands unlock sustainable growth by combining brand heritage, local market expertise, digital capabilities, and operational excellence.

Looking Forward

Today, GAP China is entering a new phase.

The focus is no longer transformation alone, but acceleration.

With continued store expansion, stronger consumer engagement, and an increasingly agile operating model, the brand is building on a foundation that has been carefully developed over the past three years.

For BBM, the GAP journey represents something larger: a proven blueprint for helping global brands unlock long-term growth in China through localization, digital intelligence, and disciplined brand management.

Three years ago, the journey began with a vision. Today, that vision has become a platform for growth.