Reposted from Indexology, a blog from Dow Jones Indexes
By Jamie Farmer
Usually, the announcement of a global chain store opening in a well-trafficked mall is not the making of headlines outside the local market. But when Gap Inc. announced the opening of a namesake store in South Africa, it was news on a couple of fronts.
First, the opening came at a time when the retailer is closing stores in the U.S., reducing its footprint at home as it fuels up to expand overseas. The shift in direction came in response to the slowing U.S. economy, among other factors. To be sure, it’s a strategy that American job-seekers and consumers alike may find a bit unsettling.
Also, it is notable that as Gap scouts out new locations, it is looking beyond developed markets such as Japan and Hong Kong, and large emerging markets such as China and Russia, where it already has outlets. And while South Africa is considered an “emerging” market, you might be surprised to learn that Gap also has a presence in so-called “frontier” markets such as Croatia, Lebanon, Ukraine and Vietnam, where it has opened outlets through a network of company-operated and franchise stores.
It’s a trend that may continue, since as maturing emerging markets begin to take on the characteristics of their developed-market counterparts, Gap and other companies are likely to set their sights on finding the next up-and-comers. At Dow Jones Indexes, we’ve recognized frontier nations through a distinct country classification. Last week, we expanded our Dow Jones Total Stock Market Index family to include indexes for all markets we define as frontier.
We thought it would be interesting compare the stock-market performance of the developed-, emerging- and frontier-market countries where Gap has opened stores. The diagram below indicates the number of Gap stores in each country where the retailer has a presence, and the 12-month market performance (as of February 29) of each of these countries, based on the Dow Jones Total Stock Market Indexes.
Photo Credits: Google Images
