On June 3, a two-story Harry Potter flagship debuted on Broadway, representing one of the biggest store openings in Manhattan in years.
The investment comes as flagships, which significantly depend on tourist traffic, have been squeezed particularly hard by the pandemic and concerns remain about the recovery of major cities.
The value of flagships has often been questioned, with many promoted more for their branding benefits than four-wall profitability.
In March 2020 just before the pandemic’s onset, Gap Inc. announced it was considering closing its “least profitable” flagships, including its Gap and Old Navy stores in Manhattan’s Times Square.
“As we and many of our peers have noted, the marketing value of the historical flagship model has diminished with the continued confluence of channels in the omni-shopping journey, particularly considering the size, location, premium brands and longer lease terms associated with flags,” Teri List-Stoll, Gap’s former CFO, said on a quarterly call at the time.
In December 2020, Abercrombie & Fitch announced it was closing seven flagships that accounted for 10 percent of global square footage but only one percent of revenue. Abercrombie’s CEO Fran Horowitz, said, “Closing flagships is a critical part of our ongoing work to reposition our store network to more intimate omni-enabled stores to better serve our local customer and represent our updated brand positioning.”
Nonetheless, Gibson just announced plans to open its first flagship described as the “Ultimate Guitar Experience” in Nashville. Supreme and Versace have opened flagships in Milan and Gucci just opened one in Seoul. In New York City, flagships debuted last year from Ugg on Fifth Avenue, Major League Baseball on the Avenue of the Americas and Krispy Kreme in Times Square.
“With so many places running away from New York, especially retailers, we want to be part of the re-emergence of New York City,” Krispy Kreme chief marketing officer David Skena, told Advertising Age last August. “We’re betting on New York.”
