Gap Inc. Expands International Presence with Franchise Agreement in the Philippines



    Franchisee Plans to Open a Dozen Gap and Banana Republic Stores in the
Philippines by 2012

    SAN FRANCISCO, October 9 /CNW/ - Gap Inc. (NYSE:   GPS) today announced a
franchise agreement to introduce the Gap and Banana Republic brands to the
Philippines. Over the next five years, Gap Inc.'s franchise partner - Rustan
Group of Companies - plans to open a combined total of approximately eight Gap
stores and four Banana Republic stores throughout the Philippines.

    The first Gap store is expected to open by the end of this year, and the
first Banana Republic stores by spring 2008. All stores are scheduled to be
open by 2012.

    "The Philippines represents a natural market for Gap Inc. to expand its
international presence," said Ron Young, senior vice president of
international strategic alliances for Gap Inc. "The country has a strong,
steadily growing economy, and consumers in this market have a great interest
in iconic apparel brands such as ours."

    Gap Inc. will leverage the Rustan Group's local operational expertise,
and will provide access to Gap and Banana Republic's clothing and accessories.
In addition, the Rustan Group of Companies will hold exclusive rights to
operate Gap and Banana Republic stores in the Philippines, will purchase
merchandise from Gap Inc. or suppliers designated by Gap Inc., and must adhere
to Gap Inc.'s quality standards to preserve the reputation of the Gap and
Banana Republic brands.

    "We're pleased to have forged a relationship with such an excellent local
partner," continued Mr. Young. "In addition to strong operational expertise
and a deep understanding of their local customer base, the Rustan Group of
Companies has a track record of successfully introducing well-known fashion
and apparel brands to international markets."

    Gap Inc. directly operates Gap brand stores in six countries and Banana
Republic stores in three countries. Today's announcement follows
previously-announced franchise agreements to open Gap and Banana Republic
stores in Bahrain, Indonesia, Kuwait, Malaysia, Oman, Qatar, Saudi Arabia,
Singapore, South Korea, Turkey and the United Arab Emirates.

    Forward-Looking Statements

    This press release contains forward-looking statements within the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. All
statements other than those that are purely historical are forward-looking
statements. Words such as "expect," "anticipate," "believe," "estimate,"
"intend," "plan," and similar expressions also identify forward-looking
statements. Forward-looking statements include, without limitation, statements
regarding the timing and number of stores that are expected to open pursuant
to the announced franchise agreement.

    Because these forward-looking statements involve risks and uncertainties,
there are important factors that could cause the company's actual results to
differ materially from those in the forward-looking statements. These factors
include, without limitation, the following: the risk that our franchisee will
be unable to successfully open, operate and grow the number of Gap and/or
Banana Republic branded apparel and accessories stores planned for the
Philippines; the risk that the company will be unsuccessful in gauging fashion
trends and changing consumer preferences; the highly competitive nature of the
company's business in the U.S. and internationally and its dependence on
consumer spending patterns, which are influenced by numerous other factors;
the risk that the company will be unsuccessful in implementing its strategic,
operating and people initiatives; the risk that trade matters, events causing
disruptions in product shipments from China and other foreign countries, or IT
systems changes may disrupt the company's supply chain or operations; and the
risk that the company will not be successful in defending various proceedings,
lawsuits, disputes, claims, and audits; any of which could impact net sales,
costs and expenses, and/or planned strategies. Additional information
regarding factors that could cause results to differ can be found in the
company's Annual Report on Form 10-K for the fiscal year ended February 3,
2007. Readers should also consult the company's Quarterly Report on Form 10-Q
for the fiscal quarter ended August 4, 2007.

    These forward-looking statements are based on information as of October
9, 2007, and the company assumes no obligation to publicly update or revise
its forward-looking statements even if experience or future changes make it
clear that any projected results expressed or implied therein will not be
realized.

    About Gap Inc.

    Gap Inc. is a leading international specialty retailer offering clothing,
accessories and personal care products for men, women, children and babies
under the Gap, Banana Republic, Old Navy and Piperlime brand names. Fiscal
2006 sales were $15.9 billion. Gap Inc. operates more than 3,100 stores in the
United States, the United Kingdom, Canada, France, Ireland and Japan. In
addition, Gap Inc. is expanding its international presence with franchise
agreements for Gap and Banana Republic in Asia and the Middle East. For more
information, please visit gapinc.com.




For further information:

For further information: Gap Inc. Investor Relations: Evan Price,
415-427-2161 or Media Relations: Greg Rossiter, 415-427-2360 Robin Carr,
415-427-2864

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GAP INC.

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