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Three retailers — Lord & Taylor, Ralph Lauren and Gap — recently closed or will soon close major flagships in Manhattan.
Lord & Taylor shuttered its store at 38th St. and 5th Ave. last Thursday. In October, owner Hudson’s Bay Company sold the 11-story building, which opened in 1914, to the WeWork space-leasing company for more than $850 million.
Hudson’s Bay Company, which also owns the Hudson’s Bay and Saks banners in North America, has struggled with anemic sales and is looking to maximize its real estate.
Writing for The New York Times at the time, Benjamin Norman said the sales of landmark properties still carry risks. He wrote, “Many old-line retailers have struggled to strike a balance between cashing out their valuable real estate holdings while retaining the historic buildings that define their brands. Despite the growth of e-commerce, the vast majority of shopping is still done in stores.”
In April 2018, Ralph Lauren closed its flagship store on 55th street and 5th Avenue less than three years after opening it. The closing came amid declining sales and profits. Polo has another flagship on Madison Avenue as well as seven other smaller stores.
On Dec. 26, Gap confirmed it will close its flagship at 54th and 5th Ave. in January. The three-story flagship opened in 1998.
On its third-quarter conference call in November, Art Peck, Gap’s CEO, said the company would look to close “hundreds” of Gap stores as it shifts focus from growth to profitability. Said Mr. Peck, “It includes some amazing flagship stores around the world that we’re evaluating with an objective eye on which ones provide sufficient value to keep. Collectively, the flags have meaningful negative contribution.”
The 5th Ave. location was formerly Gap's only flagship in New York City until 2017 when it opened a second in Times Square.
Lease rates have come down slightly in Manhattan, and other brands, including Chanel, Nike, Levi's and CoverGirl, opened flagships last year.
- HBC and WeWork Enter into Global, Multi-Faceted Strategic Relationship – HBC/WeWork/BusinessWire
- Lord & Taylor Building, Icon of New York Retail, Will Become WeWork Headquarters – The New York Times
- Ralph Lauren To Close Flagship Fifth Avenue Store In Manhattan, Cut Jobs – Advertising Age
- Ralph Lauren Reports Third Quarter Fiscal 2018 Results – Ralph Lauren Corp.
- Gap set to shut its Fifth Avenue store next month – CNBC
- Gap shuttering flagship 5th Avenue store in New York – Retail Dive
- Can Gap cut its way to profitability? – RetailWire
- Mayor Giuliani Attends Opening Of The Gap Flagship Store In New York City – New York City’s Mayor's Press Office