The Old Navy flagship store on Market Street at Fourth, which has been in that location since the 1990s, will close on July 1, adding to the deepening retail exodus crisis on mid-Market and in Union Square.

While Old Navy is one of the better performing brands in the Gap Inc universe, the company says that it will abandon this 72,369-square-foot location when its current lease is up a month from now. 

A spokesperson tells KRON4 today, "We are already working to identify new locations in downtown San Francisco that will better serve the needs of the business and our customers."

That statement perhaps implies that Gap is recognizing the ongoing troubles facing retailers on a strip of Market Street that many complain is more chaotic and crime-ridden than it's been in years — though much of the noted open-air drug activity is concentrated a couple of blocks up, closer to Sixth, Seventh, and Eighth streets.

Gap Inc. closed its flagship store in the early pandemic, in August 2020, and that move came after years in which the retailer had been shuttering stores and laying off workers nationwide.

The company is also closing its Banana Republic (BR) store in the Westfield mall, as the Chronicle reported two days ago, and the BR flagship store at 256 Grant Avenue is set to close this year as the company plans to rebrand and reconfigure all of its BR stores on a smaller scale. A new BR store is expected to open at 152 Geary Street, as the Business Times reported. 

As the spokesperson tells the SF Business Times, "Since our Market Street [Old Navy] store opened in the 1990s, the way we leverage flagship locations has changed."

The Old Navy closure announcement comes after a month in which we learned Nordstrom would be abandoning its Westfield location this summer, as well as its Nordstrom Rack store on Market. And in early April we learned that the one-year-old Whole Foods at Eighth and Market was also abruptly closing.

Around Union Square, around a dozen other stores have closed or are set to close, including the seven-month-old Coco Republic store that took over the abandoned Crate & Barrel at Stockton and O'Farrell. 

Economists have pointed to the fact that multiple cities are seeing similar spates of big-box retail closures, which have been driven by larger economic forces including consumers' increased online-shopping habits. 

Gap's spokesperson tells ABC 7 that customers can still shop at their four new "laboratory" stores at Gap headquarters by the Embarcadero, Old Navy, Gap, Banana Republic and Athleta, which are at 2 Folsom Street.

Previously: Lots of Big Retail Stores Are Closing In Big Cities, and It Has Everything to Do With Economics

Photo: Google Street View

The layoff announcements continue this week with San Francisco-based Gap Inc., which managed to have a stellar year amid high consumer spending in 2021, followed by a serious slump so far this year.

Gap Inc. is reportedly eliminating some 500 jobs at its corporate headquarters in San Francisco, New York, and Asia, as the Wall Street Journal reports. That includes layoffs as well as the eliminations of currently open positions across multiple departments.

Gap's interim CEO Bob Martin wrote in a memo to employees Tuesday, "We’ve let our operating costs increase at a faster rate than our sales, and in turn our profitability."

The announcement comes not long after CEO Sonia Syngal resigned in July, and just a week after the company announced it was winding down a partnership with Kanye West's Yeezy label, with West's legal team alleging breach of contract on the part of Gap. Remaining Yeezy clothing items in the pipeline will still be released, the company said.

Shares in Gap are down 60% for the year amid declining sales. Per the Journal, the company saw a profit of $258 million in the second quarter of 2021, but the same quarter this year saw a $49 million loss, and overall sales are down 8% as consumer spending declines across the board.

The Gap retail brand has been on the wane for many years, evidenced by the closing of retail stores and the increasing attention on the Old Navy brand, which now accounts for about half of the company's revenue. The Journal notes that one significant failure for Old Navy in the past year had been the introduction of more inclusive sizing for its clothing, which have has left the company with excess inventory that has not sold.

In a sign of changing times, Gap closed its prominent flagship store at Powell and Market in San Francisco in 2020 along with two other retail locations in the city. But earlier this year, the company announced four new retail locations on the Embarcadero at its Rincon Hill headquarters — with storefronts for each of its brands, Gap, Old Navy, Athleta, and Banana Republic.

Gap had a previous round of corporate layoffs in 2015 that came with a slew of store closures, and in 2017, the company announced it would replace 200 under-performing Gap stores with Old Navy and Athleta locations.

The company has closed well over 800 stores in the last decade and a half, though the exact total is not clear.

Gap Inc. had around 8,700 corporate employees as of its last annual report in January, so the current layoffs will affect around 6% of its corporate workforce. The company employs a total of 97,000 people, primarily in retail locations.

This layoff announcement follows others in recent months by Bay Area-based companies Twilio, Netflix, Robinhood, and Coinbase, among others.

Photo: Ian Deng

Photo: Justin Sullivan/Getty Images

Gap Inc. is making bold moves to address declining retail sales in their longstanding stalwart brands, Gap and Banana Republic, announcing Wednesday that they're closing 200 underperforming stores and will then open 270 new locations of the two brands that are doing well for them, Old Navy and Athleta. As Consumerist reports, the company announced the changes at the Goldman Sachs 24th Annual Global Retailing Conference in New York without saying which locations they plan to close, but the company says the store closures should save them $500 million in expenses over the next three years.

The net gain of 70 stores, they say, will help them increase the presence of the two brands that are actually making money for the clothing company: the value-centric Old Navy, which originally emerged as a lower-priced alternative to Gap's mid-priced basics; and Athleta, the newer women's athletic-wear and yoga-wear brand. Old Navy is expected to top $10 billion in sales in the next few years, while Athleta is expected to top $1 billion in sales, as the Associated Press reports.

Gap CEO Art Peck spoke to analysts at the conference Wednesday saying that since 2005, the company has closed 650 Gap stores and decreased its overall retail footprint by 5 million square feet — and the moves come as more and more shoppers are buying their clothes online.

"We will leverage our iconic brands and significant scale to deliver growth by shifting to where our customers are shopping — online, value and active," Peck said, per Consumerist.

According to CNN Money, Peck attributed some of Gap Inc.'s troubles to "creative missteps." One of those was Gap's egregiously terrible 2014 ad campaign with the tagline "Dress Normal."

A little over a year ago there was speculation about Gap perhaps declaring bankruptcy, and that was following a 2015 announcement of a couple hundred layoffs and the closure of 175 U.S. stores.

At the time, both Gap and Banana Republic were seeing significant declines in sales, and those seem to have continued, though perhaps aren't as bad as they were then — in August, the company reported a 1 percent drop in sales at Gap stores, and a 5 percent drop in Banana Republic's sales, and meanwhile Old Navy saw a 5 percent increase.

Previously: Gap Continues To Struggle As Shoppers Reject Their Conformist Message

As you've likely heard, Gap is in trouble. The San Francisco-based clothing company faces declining sales and is on the verge of closing dozens of stores as shoppers look elsewhere for their sartorial needs. One central problem, as Bloomberg reports and has been noted in recent years, likely has to do with the company's failure to realize that conformity is no longer hip.

The situation is perhaps best exemplified by Gap's failed 2014 "Dress Normal" ad campaign which, as Ad Week reported at the time, was widely considered to be a flub. " 'Dress Normal' boldly instructs individuals to shape their own authentic, personal style—and intentionally challenges every one of us to dress for ourselves," the campaign press release confusingly read.

To add to its failure to connect with consumers, industry analyst Simeon Siegel told Bloomberg that Gap's 3,700 physical locations have become more of an albatross than an asset. The company is “simply too large in the new normal where physical distribution has become a liability and uniformity is no longer ‘cool,’ ” he explained.

Retail consultant Carol Spieckerman put it this way, back in May, to the Chronicle: "We are operating in a trendless environment" and "Gap is in a lot more vulnerable position than other retailers, because they held on to this dictatorial bent [about what’s fashionable] a little bit longer than necessary. The game has shifted to react to consumers rather than dictate the fashion."

Gap yesterday reported that the brand's sales (as opposed to other Gap-owned brands like Old Navy) were down 3 percent in the third quarter, and a full 9 percent for Banana Republic. As noted by Forbes, this decline isn't new for the company. Gap faced a first-quarter drop of 6 percent this year when compared to first-quarter sales last year.

Back in May, Forbes identified Gap's stores as a hindrance to their growth in the face of e-commerce challengers. It seems now, with the announced store closures, Gap is again looking to address that issue.

What that means for the future of the company is unclear — this, of course, isn't the first time Gap has been forced to close stores. However, if the brand is to compete with challengers like H&M, shuttering stores may not be enough. Instead, Gap may need to think outside the box for a solution that, well, isn't so normal.

Related: Could Gap Be Declaring Bankruptcy Soon?
Gap Lays Off 250 Employees, Announces Closure Of 175 Stores

One of San Francisco's bigger employers, Gap Inc., could potentially be seeking bankruptcy protection according to the Chronicle in a speculative piece that came out just before the holiday weekend. Though the official word from the company is that they have a perfectly healthy balance sheet, word on the street is that brands like Gap are struggling mightily against trendier fast-fashion stores like Uniqlo and H&M, and that if Gap can't turn things around quickly and increase sales, they're going to end up in a "death cycle of closing stores to cut costs."

About this time last year, Gap announced a small round of layoffs and store closures, saying they would be letting go of 250 employees and closing 175 of its North American store locations. That was followed by news from ten days ago that they would be closing 75 Old Navy and Banana Republic locations outside the US, including 53 Old Navy stores in Japan in an effort to save $275 million in annual costs.

But the bigger problem may be the brands themselves, the quality of the merchandise, and the company's poor early effort when it came to e-commerce, as the Chronicle reports. Also, there's the slow death of malls across the country, where Gap has located the vast majority of its stores.

Chicago-based retail consultant Brian Kelly tells the paper, “Gap’s time has passed,” and “They are not even taking care of their stores." And Carol Spieckerman, president of the Spieckerman Retail consulting group, suggests that the bigger picture has meant trouble for other brands too like Abercrombie & Fitch and J. Crew, because "We are operating in a trendless environment" and "Gap is in a lot more vulnerable position than other retailers, because they held on to this dictatorial bent [about what’s fashionable] a little bit longer than necessary. The game has shifted to react to consumers rather than dictate the fashion."

Bloomberg reports that, despite consumer spending being on the rise in recent months, "Mall-based retailers have had a particularly tough May." Gap's stock is currently down 19 percent.

A Gap spokesperson insists the company has "healthy free cash flow," but their public financials show a pretty dismal picture. Their free cash flow was $868 million in 2015, down a whopping 38 percent from $1.4 billion the previous year.

Still, all of this remains speculation, and brands have reinvented themselves before — Abercrombie & Fitch being a prime example.

But more news about store closures seems likely on its way.

Previously: Gap Lays Off 250 Employees, Announces Closure Of 175 Stores

Major news for a major Bay Area employer today as Gap, Inc. announced that it would be shuttering a swath of its stores across the U.S., and laying off a segment of its local workforce. As the Business Times reports, the move comes as the company has seen a decline of $300 million in annual sales for the Gap brand, which has led to the need to close 26 percent of its U.S. locations, or about 175 stores, and lay off 250 people both from its SF and NY offices, and from field leadership positions nationwide.*

This will still leave the company with 800 Gap stores in North America, and they say that no Gap Outlet or factory stores will be closed.

Gap Global President Jeff Kirwan issued a statement saying, "These decisions are very difficult, knowing they will affect a number of our valued employees, but we are confident they are necessary to help create a winning future for our employees, our customers and our shareholders."

Business Insider discussed in April the disparity between Gap's decline in sales, and the roaring success of their discount brand Old Navy, noting that it points to the idea that "Americans seem more concerned with saving money than being cool." Gap was always positioned as a trendy place for buying clothing basics, but in recent months Gap has seen its sales in a steep decline year over year, with sales down 7 percent in March, over last year, and down 14 percent over the same period in 2013. And Gap's sales numbers have reportedly been in decline for at least the last five years.

Meanwhile, upscale brand Banana Republic is doing less poorly, but also saw a 3 percent decline. And Old Navy saw a 14 percent bump year over year.

Gap is the Bay Area's seventh largest employer.

* This post has been corrected per a statement from Gap to clarify that "The headquarter role eliminations are primarily in Gap’s North America offices, including places like New York and San Francisco, but also across its Upper Field Leadership, which are based across the country."

Large-scale sculptor Richard Serra is known for his enormous COR-TEN steel installations big enough for dozens of people to walk through and stand within. And now, one of his pieces from the last decade, Sequence, weighing in at 214 tons and consisting of 12 13-foot-high sections, is slowly being installed in the new wing of SFMOMA along Howard Street, and severely slowing traffic there as a result.

Matier & Ross are on the case, noting that the museum — which won't reopen in its new form until 2016 — has its trucks blocking off two lanes of Howard Street for four days this week as each piece of Serra's piece gets carefully hoisted and maneuvered into what will be the museum's new entrance hall.

A rep at the museum tells SFist, "We’re actually ahead of schedule and have finished early each day putting the Howard Street lanes back in play hours earlier than planned."

The sculpture will be on loan from the Fisher Art Foundation for the next five years, at which point the museum will swap it out for a different piece in this "admission-free zone" of the museum.

Sequence has been living in a courtyard at Stanford since 2011, and you can see a photo of it from above here. Created in 2006, it spent its first year of life as part of a Serra retrospective at the MoMA in New York before getting shipped to California and spending 2008-2011 at the LACMA in L.A. The figure-eight-shaped piece measures 67 feet long, 42 feet wide, and 13 feet high, and works almost like a maze that one can walk through.

The Fisher family (founders of The Gap) remains closely tied to SFMOMA, and they also own another enormous piece of Serra's that stands in the atrium of Gap headquarters along the Embarcadero. It's called Charlie Brown and stands 60 feet tall, and can be seen in photos here.

Related: SFMOMA Neither Confirms Nor Denies Reports Of Three-Year Closure

Colorful t-shirts deck out this Gap building on Brannan (between Second and Third Streets), brightening up an otherwise dreary block.

"Old Navy" by Demetrios Lyras.

Well that didn't take long. After last week's Internet backlash, San Francisco's favorite khaki maker* has reverted back to their classic logo. Gap president Marka Hansen apparently changed her mind about how "contemporary and current" the new logo was after an "outpouring" of pro-bono replacements offered up by designers.

A Gap rep says Laird & Partners (the New York Agency that created the logo) haven't been ejected yet, but the clothing company did mention they are pursuing a crowdsourcing project in the near future. The lesson here? Never underestimate the power of underemployed freelancers.
[AdAge]
Comic Sans logo designed by TheTensSF

(*Do people still wear Dockers?)

by Andrew Dalton

Local mega-brand Gap ditched their iconic logo, known for sufficiently capturing the brand's tasteful and unpretentious character, in favor of a slick new helvetica-laced number this week. Which brings them ever closer to the American Apparel territory they've been inching towards since they debuted new ads for their 1969 denim collection a year ago.

Unfortunately, everyone and their roommate is a graphic designer on twitter these days and the Internet hates it, so now it's a big deal. There's even a tool to make your own. So far the new logo has only popped up on the company's website, so aside from the designer's hourly rate, we assume they haven't sunk too much cash into this. Which is good, because according to the SF Business Journal their same-store sales numbers are down this year.

[AdWeek]
[AdAge]
[SFBiz]

Even though the clothing giant improved sales in 2009, Gap CEO Glenn Murphy, 48, has taken a pay cut. Murphy, according to an AP report, "received compensation valued at $5 million, down 7 percent from a year ago." But we don't think he'll be signing up for food stamps anytime soon. Based on regulatory filing, Murphy "also received other compensation totaling $163,382, including $91,894 for personal use of the company's airplane and $42,238 for company match to a deferred compensation plan."

"Festive atmosphere so far, but I suspect emotions are coming.," reports the photog whpo shot the image from today's Don Fischer memorial.

Gap founder Don Fisher, if you recall, died in September. He was 81.

(Thanks, Matt Baume, for sending this our way.)

After a long battle with cancer, Gap founder and third-generation San Franciscan Don Fisher died on Sunday. He was 81.

Co-founding the wildly successful clothing retailer in 1969 with his wife, Doris -- the very first Gap was on Ocean Avenue, which grew into 3,100 stores in six countries -- Fisher was also an art collector, with much of his collection (Warhol, Lichtenstein and de Koonin) most finding a home at SFMOMA.

Before Gap and amassing a net worth estimated at $3.3 billion, Fisher was just another kid living in the Outer Richmond. Graduating from Lowell High School way back in 1946, he attended the University of California at Berkeley, where he was a member of the the swimming and water polo teams. According to Wikipedia, "Fisher had a robust college experience at Berkeley where his nickname was ‘Horny Fish’ and where he was caught cheating by then-Professor Clark Kerr. Kerr gave Fisher an F, but did not have him expelled."

In a statement, SF Mayor Gavin Newsom said, "Don Fisher was a great San Franciscan, a loving husband and father, and a dear friend ... His unwavering commitment to our city's arts and civic culture will be remembered for generations to come."

Flags around San Francisco will be flown at half staff in honor of Fisher.