By ZHOU Fangying

Clothing retailer Gap has sold up in China for US$40 million (290 million yuan) to e-commerce company Baozun.

Gap’s value on the mainland was around 300 million yuan while Gap Taiwan is worth around 63 million yuan, so US$40 million is bargain hunting for Baozun.

Baozun, listed both on HKEX and NASDAQ, will be in charge of production, retailing, and distribution for at least the next 10 years.

Rumors first started circulating in 2021 when Bloomberg reported Gap was looking for buyers, so it is not the sale that is surprising, but the price. Gap's rival, domestic brand Peachbird’s profit last year was almost twice Gap’s price. Uniqlo’s profit in China last year was 4.9 billion yuan.

Gap expected to make one billion yuan in 2016, which would have made China Gap’s second-largest market, but the decline started in 2017. Now the whole of Asia accounts for only 5 percent of the company’s income.

Across the globe, Gap is also having trouble. Its price-earnings ratio is -10.71, in the first three quarters, it lost US$49 million, an awkward recession from last year’s US$258 million profit.