Over the last year, several giant retailers have faced major setbacks. The downturn in profit is largely due to the ever-increasing popularity of online shopping. Now, Gap has revealed some major news.
The brand confirmed that they will officially be moving out of their store on Fifth Avenue in New York. The coveted Fifth Ave spot that Gap is giving up is a sign of the changing times.
According to CNBC, this move is a part of Gap's efforts to reduce costs and focus on higher performing shops. The three-level store will shut down on January 20.
This is not only a sign that mega-popular retailers are needing to adjust their strategies to compete with online sites, but also that New York real estate prices are becoming "unsustainable." However, the Real Estate Board of New York has noted a significant decrease in costs for the area over the last several months.
According to the REBNY, the portion of Fifth Ave where the Gap store sits has an average asking rent of $2,973 per square foot. Even that number is a shocking 24% down as of this fall!
Now, stores that have been a part of Fifth Ave for years are moving out, leaving room for newer stores to join the neighborhood!
Recently, Gap said that they are considering shutting down hundreds of locations "aggressively." The purpose would be to focus on the company's higher performing stores.
What do you think about this news? Let us know your thoughts! In other recent news, a type of Ibuprofen has been recalled. Keep it away from your kids!