Uniqlo to buy The Gap

Shares of Gap Inc. jumped 7 percent to $33.55 in midday trading today on rumors that Japanese retail giant Fast Retailing was interested in buying the company, according to two market observers.


By 2 pm on Wall Street nearly 12 million shares of Gap had traded hands, well above the stock’s average daily trading volume of 5.8 million over the past three months.


Fast Retailing is also an acquisitive company, having most recently bought J Brand Holdings in December, although that was a much smaller deal than a play for the Gap would be.

“Fast Retailing has always had pretty lofty ambitions, and many people say they should buy Gap, if they want to have a U.S. business,” said one financial source. “For them to grow organically and develop a footprint in the U.S., it would take them forever.”


Fast Retailing chief executive officer Tadashi Yanai has said Fast has “billions to spend on acquisitions. This could be the quickest path, but it’s a big big bet.” In 2007, Fast offered $900 million to buy Barneys New York but was rejected. Tadashi Yanai has also said that he plans to open up to 300 Uniqlo stores outside Japan per year.

“At the end of the day, if you are a public company and if somebody puts an offer on the table at a reasonable price, you would be forced to entertain it,” said the financial source. “But Gap is not the kind of company putting out vibes for somebody to acquire them, and there would only be a short list of people capable of buying it.”

One retailer familiar with both Gap and Fast said Tadashi Yanai is “much more interested in building Uniqlo — sounds like there are some rumors around — but if it’s around my strong guess is that it’s truly only rumors.”