Gap buys Intermix for $130M: why small businesses should care

January 4, 2013


Intermix acquired by Gap

Gap has announced that they are acquiring fashion retailer, Intermix for $130, adding them to their retail portfolio already including Gap, Old Navy, Banana Republic, Piperlime, and Athleta. Some analysts are raising their eyebrows, wondering how a brand like Gap will incorporate a high fashion retailer that mixes brands like Yves Saint Laurent, Stella McCartney, Herve Leger, and Jimmy Choo into their existing affordable brands. Some say the company already struggles with pricing because Gap prices can’t beat Old Navy prices, and so on and so forth, but what many miss is that the big box retailer could benefit from a price bump beyond what Banana Republic offers.

The purchase makes perfect sense if you look at Gap’s track record. Piperlime is their online retail darling, and Athleta was purchased to immediately go head to head with the wildly popular Lululemon, which it has. Combine their ability to successfully operate an online retailer, and acquire a store to take market share from a beloved brand, the Intermix acquisition is a no brainer, as the high fashion brand is a hybrid retailer with 30 store in the U.S. and Canada, mixed with a strong online brand. With this acquisition, Intermix now has massive resources to boost both their online e-commerce and offline presences.

Where the inspirational part comes in

Many are already familiar with the Intermix brand, but less people know that it was started by a 19 year old college dropout in the late 90s who adored fashion. Only 15 years later, the already large brand is seeing a massive cash infusion, a tremendous new pool of resources only fantasy just a year ago, and more exposure than they ever could have done alone.

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