GAP WILL…

In a bleak retail year that's forced powerhouses such as Starbucks to close branches, the Gap, a company that managed to make plain tee shirts and khakis hip, announced its plans to close stores across the U.S. Few of our poll respondents seemed surprised by this, and, in fact, 59% predict that the company will close more stores than it previously announced. Distantly behind, 21% think Gap will find another real estate solution, and 19% think the company will face serious problems. Steve Gartner, president of Metro Commercial Real Estate, thinks the uproar is much ado about nothing. Here are his thoughts:

"There's always a trend of retailers reinventing themselves. Even when they announce massive closings, often they're opening stores at the same time. So I don't find a store closing announcement by a retailer, especially one as large as the Gap or Starbucks, to be anything other than a healthy pruning. With retailers that have experienced a period of major growth, it's no surprise when they take a breath and decide to close stores or slow expansion.

"It gets a lot more attention when they make an announcement of a lot of closings at once, but it's very normal and, in many respects, healthy. Nobody closes good stores. They close underperforming stores. Just like pruning a tree, it makes for a healthier tree. When a chain has thousands of locations, not every one will be a winner and not every one will meet a minimum threshold for performance. We're seeing slower growth rates by retailers in their store openings but we are still seeing them open locations. They're just being somewhat more selective.