Gap mulls sale of China business

Apparel retailer Gap is weighing options including a potential sale of its China business, citing people with knowledge of the matter.

The report said the Old Navy parent was working with an adviser to explore its options and has contacted prospective suitors. It added there was a possibility that Gap could also keep the business.

The company, owner of Banana Republic and Athleta brands, said it does not comment on rumors when contacted by Reuters.

Gap entered the Chinese market about a decade ago, betting on rising incomes in the world’s second-largest economy to boost its sales. However, it stopped selling Old Navy apparel in the country last year to sharpen its focus on North America.

Gap’s Asian market accounts for about 5 percent of its overall net sales, according to its latest regulatory filing. The company does not break out country-specific sales.

Shares of Gap, up 43 percent this year, rose about 1 percent in extended trading after the report.