The 35 new locations most likely will work out to about 25 Gapstores and about 10 Banana Republic openings by 2010. The first Gapstores are scheduled to open in late 2006 and the first BananaRepublic stores in 2007.

Gap sees the Middle East as an appealing market because of itsyoung and affluent population, according to Joshua Schulman, SVP ofGap Inc.'s International Strategic Alliances and Gap JapanMerchandising. He says that Dubai, in particular, is appealingbecause it has developed into "a world class shopping destinationwith some of the largest and most important shopping malls in theworld."

The expansion into the Middle East marks Gap Inc.'s secondfranchise agreement to extend its reach to international markets.In January, the company announced that Gap and Banana Republicstores will open under franchise and distribution agreements inSingapore and Malaysia.