GAP left South Korea after 18 years, its prices too high to compete

GAP, the American casual wear giant, ended its 18-year presence in South Korea in the first half of 2025. Shinsegae International, which had operated GAP as a franchise since bringing the brand to Korea in 2007, decided not to renew the contract and began winding down operations, discounting remaining inventory.

The decision was driven by GAP's persistently higher prices in Korea compared to overseas markets, which made the brand uncompetitive against fast-fashion alternatives H&M and Zara that had aggressively expanded in the Korean market. Korean consumers could find the same GAP products cheaper through cross-border shopping or during overseas travel, undermining the domestic franchise model.

Shinsegae International was itself pivoting its portfolio toward luxury and contemporary brands, where margins were higher and competitive dynamics more favorable. The group had been shifting resources toward higher-end brands including Brunello Cucinelli, Maison Margiela, and other luxury labels that better matched Korean consumer preferences for premium fashion.

The exit was part of a broader wave of US and European mass-market fashion brands retreating from Korea, as domestic and fast-fashion competitors grew stronger and consumer expectations shifted toward either ultra-affordable or ultra-premium positioning.