Gap Inc.’s decision to shutter its fledgling Forth & Towne division caught many by surprise, particularly in light of its recent national advertising campaign and direct mailings. But the consensus of industry experts is that it was just the first of many steps the company needs to take to reenergize its $16 billion retail empire.The 19-store Forth & Towne division, launched amid great fanfare in summer 2005, was Gap’s attempt to target an older (women age 35 and up) demographic. But while the store design was widely heralded (the center-store fitting-room area was a standout), the concept itself met with a lukewarm reception from analysts. Gap never broke out financial results for Forth & Towne. But in announcing the closing, the company said that while it was encouraged by its initial performance, “The concept was not demonstrating enough potential to deliver an acceptable long-term return on investment.”
There is no doubt that Gap needs to focus 100% on its core brands contributed to the demise of Forth & Towne. But on a more macro level, the decision to shutter the chain illustrates just how hard it is to get new specialty apparel formats established in the competitive U.S. market. The same point was driven home by Liz Claiborne’s announcement that it is closing its Mexx stores here (rumor has it that American Eagle Outfitter’s Martin + Osa will be next to go).
The fact is neither the industry or Wall Street is inclined to give new ideas much time to grow, at least not in the current environment. Those that don’t show traction within a relatively short amount of time are destined for the chopping block.
— Marianne Wilson
