 |
 |
 |
 |
 |
 |
 |
 |
Shopping Centers Today -> December 2005
 PRINT THIS STORY: |
  CHANGE TEXT SIZE: |
BRIDGING THE GAP
Gap tries to bring boomer women back into the fold with a new concept
By Molly Knight
Gap Inc. launched and built three strong retail brands. Unfortunately, growth at all three has stalled of late. September same-store sales at U.S. Gap stores dropped 3 percent, while Banana Republic and Old Navy were both down 7 percent. The company says it thinks it has the solution with the rollout of yet another concept: Forth & Towne.
This new chain is a neat complement to those first three, given that its target customer — women 35 and older — picks up right where their 18-to-34-year-old shopper leaves off. This older shopper has more money, of course, and is less shy about spending it.
The rapidly growing demographic group earns the highest income of any women’s age bracket, Gap Inc. CEO Paul Pressler told investors at a conference to announce the launch. Clothing purchases among these women account for nearly 40 percent of all such expenditures.
“We recognized that we did not have a significant share of that market,” said Gary Muto, president of the Forth & Towne division. “In fact, we estimated it to be less than 3 percent. And we saw that these women spend more on apparel than any other age group. These two facts alone make this a compelling opportunity.” Muto has been with Gap Inc. for over two years, most recently as president of the Gap division.
Forth & Towne is off to a strong start, with analysts applauding and consumers flocking to the first five stores, which opened in late August in Illinois and New York.
“Building brands is part of our DNA,” said Gap Inc. spokeswoman Kimberly Terry. “We’ve had tremendous success with Old Navy, and we’re trying to build that again.”
With layouts that mimic a golden-age department store, Forth & Towne stores try to incorporate the factors that most influence boomer women’s apparel decisions: fit and variety. To create a store that would appeal to as many of these women as possible, Forth & Towne hired Austyn Zung, formerly vice president of design at Oscar de la Renta, as senior vice president of design and product development.
“It’s especially exciting shaping a brand targeting a woman who is not well served in the marketplace today,” Zung said. “This customer is stylish, she is grown up, and she is elegant. She knows what looks great on her body. When she finds a pair of flattering pants she will come back again and again for that fit. Her challenge is that she’s just not finding what she wants out there in the marketplace.”
Specifically, she’s just not finding what she wants at Gap, Old Navy or Banana Republic stores, observers say.
So, in accordance with four major style categories Muto identified, Zung and team put together four distinct clothing lines for Forth & Towne: Allegory, for the classic dresser who appreciates a traditional look; Gap Edition, for the girl who grew up with — and then grew out of — Gap; Prize, for the fashion-forward seeker of trendy outfits; and Vocabulary, for the individualist seeking an unstructured style.
“We’re excited, because no one has ever done this in specialty apparel,” said Muto. “This is a totally unique approach to this market. Our brands are distinct and carry their own label.”
Boomer women tend to lead “multifaceted lifestyles,” Muto says, and they are overwhelmed by department stores, underwhelmed by stores catering to older women, and alienated by specialty stores that target 20-somethings. At Forth & Towne, Zung says, they will find everything from colorful printed blouses and chunky bracelets to classic denim and suits, all centered around size 10 — instead of the industry standard 8 — and all at a moderate price point: 90 percent of the offerings go for under $100.
And it will not be just the apparel pulling customers in, but the store layout as well, Muto says. “For inspiration, we went to the glory days of the ’50s and ’60s,” he said.
Forth & Towne stores measure between 8,000 and 10,000 square feet, like Gap and Banana Republic units. The first five opened in regional malls and lifestyle centers: Algonquin (Ill.) Commons; Fox Valley Mall, in Aurora, Ill.; Westfield Old Orchard, Skokie, Ill.; Woodfield Mall, Schaumberg, Ill.; and Palisades Center Mall, West Nyack, N.Y.
At the heart of each store is a comfortable, circular salon and dressing rooms equipped with adjustable lighting and three-way mirrors.
Landlords welcome the infusion of fresh retail to their malls, particularly from such a powerhouse as Gap Inc. Bold new concepts help customers snap out of their typical, trancelike shopping experiences, they say.
“For some time we’ve heard criticism that enclosed regional malls are all the same,” said Michael P. McCarty, senior vice president of research and corporate communications at Simon Property Group. “We’re always trying to stay ahead of the curve. If a company is developing a new concept, we want it, and we want it first.”
But even though a startup retailer might have an excellent product that will eventually generate revenue for the mall, McCarty says, landlords are predictably more comfortable leasing to established brands. “To us, it’s all about risk and execution,” he said. “It’s not as if a new startup won’t be a success. It’s just that we already know a company like Gap has an excellent history of executing new ideas. So for us, it’s a lower risk.”
And though Gap Inc. certainly has the resources to buy an existing company and mold it to its liking, it is easier to build from the ground up, says consultant Wendy Liebmann, president of WSL Strategic Retail, in New York City.
“One of the challenges of buying another company is it takes time to integrate the new company into the current culture,” Liebmann said. “In some cases it may be more expensive to develop a brand-new store initially, but in the long-run it’s better. You’re only burdened with your own mistakes and no one else’s.”
It will be months before consultants can declare Forth & Towne a success, but based on the short-term performance of the five pioneer stores, McCarty is willing to go out on a limb: “So far it looks like a home run,” he said.
Gap Inc. plans to open another five Forth & Towne stores this coming year and possibly an additional 20 the year after. The expansion is part of a trend among established retailers starting niche concepts to gain market share. Pacific Sunwear, for example, is launching One Thousand Steps with 10 units in the new year to sell shoes to teens. PacSun thinks it can expand the concept to about 800 units eventually. Then there are Abercrombie & Fitch’s Rhuel, Gymboree’s Janeville and Ralph Lauren’s Rugby.
“We’re leasing so much new space that new concepts aren’t necessarily the primary source of new tenants in our malls,” McCarty said. “They’re probably only 20 percent. But that being said, they probably get 80 percent of the sizzle and attention from customers. You don’t really need all that many to make a big impact.”
 | Current Issue November 2008 |