- Angela Gonzalez-Rodriguez |
Gap will start 2019 strong: the U.S. fashion label will be shutting down a large number of poor performing stores nationwide. Its flagship in Manhattan’s Fifth Avenue will be one of the first to close its doors.
Gap (GPS) is set to shut its massive NYC store on Fifth Avenue, CNBC reports, as the apparel retailer recently said it is considering closing hundreds of locations "aggressively" to focus on higher performing shops.
As recalled by ‘Seeking Alpha’, the reason for the specific closure is not disclosed, but the news comes as retail rents in Manhattan have been climbing over the past few years. The financial publication cites real state data to highlight that although rents have started to cool off recently, the street’s side up of Fifth Avenue between 49th and 59th streets in midtown where the Gap store sits saw rents drop 24 percent this fall, placing the average rent at 2,973 dollars/sq. ft.
Gap still maintains 775 stores globally
In November, the retailer said that it still has 775 Gap-branded stores globally, in addition to those under the Old Navy, Banana Republic and Athleta banners. In total, Gap Inc. has more than 3,000 stores around the world. The namesake brand, however, has been the weakest unit of the company of late. In the fiscal third quarter, sales at Gap stores open for at least 12 months fell 7 percent, while those at Old Navy and Banana Republic were positive.
“There are hundreds of other stores that likely don’t fit our vision for the future of Gap brand specialty store, whether in terms of profitability, customer experience, traffic trends,” CEO Art Peck said Tuesday evening during a call with analysts. “The range from the very best to the very worst stores is extremely broad.”
Peck said that should the company “address” the bottom half of its fleet of Gap stores, it could contribute more than 100 million dollars to earnings. He added the company is looking to make decisions about shutting stores “with urgency,” including looking at closing some of Gap’s “amazing flagships.”
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