NEW YORK — Expansion plans for Old Navy, the Gap’s highly touted growth-vehicle for the future, have been scaled back for 1995, Wall Street sources said Monday.
The Gap reportedly told Wall Street analysts that it now expects to open 50 to 75 Old Navy stores, rather than the 75 to 100 it had projected, due to real estate issues. Old Navy, the Gap’s lower-priced format launched last year, is being situated mainly in strip centers. The Gap reportedly said that’s the reason for the slowdown, claiming negotiations with strip centers are more time consuming than seeking space in malls. Strip centers are controlled by a vast number of players, while malls are in the hands of a few. In some cases, negotiations have stalled, pushing many openings into 1996, the Gap told Wall Street.
The Gap noted that Old Navy was profitable in 1994, with 57 stores in operation at yearend, adding 11 stores during the year. Gap officials could not be reached for comment. — Fairchild News Service