Press Release

GAP INC. DIRECT TO LAUNCH NEW ONLINE FOOTWEAR BUSINESS

Company Plans to Leverage Its E-Commerce Expertise By Offering Leading Footwear Brands

SAN FRANCISCO − May 22, 2006 − Gap Inc. (NYSE:GPS) plans to launch a new online footwear business through its e-commerce division, Gap Inc. Direct, featuring leading fashion brands for women, men and children.  The new business is expected to go online in time for the 2006 holiday season with a broad assortment of footwear offerings from designer to casual brands.

“The highly fragmented, rapidly growing online footwear market offers a tremendous opportunity for Gap Inc. to leverage our expertise in e-commerce, merchandising and marketing to deliver a distinct fashion point of view,” said Toby Lenk, president of Gap Inc. Direct. “Customers will be able to put together complete looks online from head to toe.”

Online footwear is growing nearly 15 percent annually and will become a $5.5 billion market by 2010, according to analysis conducted by Forrester Research in 2005. Research conducted by Gap Inc. indicates the company’s own, sizeable online customer base already buys shoes online.

“Almost two-thirds of our online customers surveyed last year said that they would buy shoes online from Gap Inc.,” said Lenk. “Gap.com, OldNavy.com and BananaRepublic.com are all consistently among the top 10 specialty apparel sites in terms of traffic, so we believe we already have an active and loyal customer base for online footwear.” 

Lenk has assembled a team of footwear and e-commerce leaders that will be dedicated to the business. Agreements with dozens of leading footwear brands have been signed to date.

Additional details will be announced at a later date.

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 statements regarding the company’s plans to launch a new online footwear business and related timing.

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 the company will be unsuccessful in implementing its strategic and operating initiatives; and 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. 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 January 28, 2006. 

These forward-looking statements are based on information as of May 22, 2006 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.