Gap to Expand Forth & Towne
Gap Inc. said Wednesday that it would open about 10 Forth & Towne stores this fall, including at least one in the Los Angeles area, tripling the size of a fledgling chain targeting women 35 and older.
Gap is “very encouraged” by shoppers’ response to the chain, Forth & Towne President Gary Muto said in an interview, although he declined to give specifics about store performance. “We’re excited about what we’ve been able to achieve in a relatively short period of time.”
The latest Forth & Towne stores will open in five new markets: Northern and Southern California, Seattle, Houston and Atlanta. Gap declined to pinpoint the location of the new stores.
The San Francisco-based retailer opened five test stores last year -- four in the Chicago area and one near New York City -- and has said the division will have about 25 stores by 2007.
The expansion comes as the nation’s largest specialty apparel retailer struggles to pull shoppers back into its 3,000 Gap, Old Navy and Banana Republic stores. Sales at stores open at least a year, a key measure of growth, fell 11% last month. Except for a 1% increase in January, same-store sales have been flat or declining for 14 straight months. Fourth-quarter profit fell 11%.
“Immediately, they need to work on improving the product at Gap and Old Navy stores, and they are working on that,” said Howard Tubin, an analyst with Cathay Financial Inc. “You have to look at how you’re going to grow in the long run, and Forth & Towne, hopefully, is the answer to that.”
Shares of Gap rose 27 cents Wednesday to $18.26.
Independent analyst Jennifer Black said she had heard mixed reviews about the stores: “It will be interesting to see how they do in some different markets. I think it’s just an OK concept. I don’t think it’s a wow concept.”
The competition for female baby boomers -- a category of shopper that’s both discriminating and itching to spend -- is intense. Specialty stores such as Chico’s, Ann Taylor Loft, J. Jill and Janeville, Gymboree Corp.’s new division, all target this customer. Department stores such as Macy’s and Nordstrom also are battling for market share.
Forth & Towne will “face tougher and tougher competition, which is exactly what happened at Gap brand,” Black said. The challenge comes as Forth & Towne searches for a replacement for its top merchandising executive, Jyothi Rao, who will soon take a personal leave for an unspecified period of time.
Muto said the 35-plus customer is “wildly underserved” as she struggles to find clothing that is both stylish and “age appropriate.”
“Her fear is she doesn’t want to look like her mother and she doesn’t want to look like her daughter,” he said.
And sometimes, she doesn’t want to look in the mirror, an issue that Forth & Towne has addressed by installing adjustable lighting in its dressing rooms.
“We’re learning a lot,” Muto said.
