It used to be considered the retailer’s crown jewel—a large format store on a swank corridor that showed off the best of what a brand had to offer.
But now the so-called flagship store is disappearing from high-profile shopping thoroughfares like Manhattan’s Madison Avenue and Chicago’s Magnificent Mile because of skyrocketing rents and the shift to online shopping.
Over the past year or so, Gap, Tommy Hilfiger, Lord & Taylor and Polo Ralph Lauren have closed its flagship stores on Manhattan’s Fifth Avenue. Abercrombie announced in May that it was closing three more of its big locations—in Milan, in Fukuoka, Japan, and a Hollister-branded store in Manhattan’s SoHo area. The announcement came after the teen retailer shut down flagships in Hong Kong and Copenhagen.
Other retailers are reimagining the flagship concept instead of abandoning it altogether. Nike, for instance, opened a massive store on Fifth Avenue late last year that doesn’t have any cash registers.
It lets shoppers see details of items displayed on a mannequin by scanning the QR code and then having those items delivered to a fitting room or a designated pickup spot. Levi Strauss & Co.’s new flagship in Manhattan’s Time Square features larger dressing rooms with call buttons and tailors who can add trims and patches to customers’ jeans.
The concept of a flagship store is more than a century old and used to be limited to retailers’ biggest store—one in their first or most prominent location. But in the past 20 years, a flagship store frenzy took hold and retailers from Gap to H&M looked at them as a must-have shrine to their brands, opening multiple flagships in multiple locations. Not only that but they were willing to pay exorbitant sums of money to showcase their merchandise in luxury corridors.
Rents have swelled so much, however, that many retailers can no longer justify the high price, especially as more shoppers shift their spending online and physical stores lose foot traffic. Read the full story.