Gap (or “The Gap,” as it is also affectionately called by shoppers) has announced the plan to close one of its stores. While store closures are pretty common these days, particularly among large franchises like The Gap, this particular closing is a significant one. That’s because this store is Gap’s three-level store in the Midtown area of New York. This prime Fifth Avenue location, in Manhattan, was actually Gap’s flagship store in New York City until the company opened its current flagship store, in Times Square, in 2017.
And this is just one of many stores the company is planning to close, according to a recent earnings call with Gap Inc CEO Art Peck. The brand, like many others, continues to struggle in this highly-competitive international retail market and plans to close probably several hundred locations, and that includes a few flagship locations. Actually, Gap Inc’s parent company reported a 7 percent decline in same-store sales in just the last quarter.
In the call, Peck notes, “We have had a lot of stores that in the bottom half of the fleet that has continued to deteriorate over time…These stores are a drag on the health and a drag on the performance of the brand.”
Indeed, he notes that the company wants to focus on improving customer experience and simply letting these stores continue to struggle will only make it harder. Of course, high rents have seen many companies vacate storefronts on Fifth Avenue, and the Gap is feeling the crunch. And high rents are getting harder and harder to pay as online retail continues to occupy more of the sales space and push brick-and-mortar stores out of consumer visibility. Also, New York City’s retail space, over the past decade-or-so, has seen a massive increase.
To reiterate, Gap is not the only major retailer to lose steam in this economy. As a matter of fact, Ralph Lauren closed its flagship Polo store—a location which is just across the street from the Gap’s flagship store, on Fifth Avenue—last April. On the same prime block—those below 57thstreet—Henri Bendel permanently shuttered its doors in January of last year.