AOL Hits the Runway with Two New Fashion Deals

America Online, Inc. (NYSE: AOL) has had a busy week in the fashion business, adding two new groups of stores to its Shop@AOL online mall. The largest deal, with Gap Inc. (NYSE: GPS), is a three-year joint marketing and commerce agreement that will put the Gap, Banana Republic and Old Navy on AOL’s sites. In addition, AOL will add Cache, Inc.’s (Nasdaq: CACH) specialty women’s clothing to its shopping lineup.

The agreement with Gap places the company’s three heavily marketed brands in prominent positions on AOL’s sites. They have been assigned anchor or premier placement on Shop@AOL, [email protected], [email protected] and Shop@Compuserve. The brands are now featured in the men and women’s clothing departments, as well as on baby, kid and teen pages. Gap’s new foray into undergarments — called Gap Body — gets promotion in AOL’s lingerie areas, where it competes with Victoria’s Secret and One Hanes Place.

Gap Inc. has more than 2,600 retail stores in six countries. The company sells the Gap and Banana Republic products via mail order catalogs, as well as in retail stores. The Gap is also available online, and Banana Republic’s site is under construction. Gap does not market Old Navy via catalogs or the Web.

A Cache for Women

A slightly smaller fish in the fashion sea, Cache operates 191 stores in the United States. It negotiated a position as a “Gold” tenant in Shop@AOL’s women’s apparel department, which provides a link from the Cache logo on AOL’s site to the Web site.

“ aims to be the first interactive e-commerce site which appeals to a modern woman’s sense of style,” the company says. The site offers three-dimensional images of its clothing, the ability to zoom in on the products and a virtual dressing room that allows shoppers to build a personal profile. Visitors can also follow fashion news and keep track of events on a fashion calendar.

Shop@AOL launched in mid-July, and plans to continue to add brand name stores through October. More than 46 million people — 70 percent of all Web surfers — use AOL’s services every month, according to Media Metrix research.

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