Is the era of the ornate flagship location over for retailers? This was the question posed in a recent report by The Associates Press. As the report noted, flagship stores used to be considered a retailer’s crown jewel with a “swank” location and a design that showcased the best of a brand had to offer.

“But now the so-called flagship store is disappearing from high-profile shopping thoroughfares like Manhattan's Madison Avenue and Chicago's Magnificent Mile because of skyrocketing rents and the shift to online shopping,” the report noted.

The Gap, Tommy Hilfiger, Lord & Taylor and Polo Ralph Lauren all have closed flagship stores on Manhattan's Fifth Avenue over the past year or so. Abercrombie, too, is in the midst of closing its big locations, from SoHo to Japan.

At the same time, Nike and some others have “reimagined the flagship concept instead of abandoning it altogether.” A new Nike store on Fifth Avenue eliminated cash registers. It also provides shoppers the details of items displayed on a mannequin by scanning the QR code and then having those items delivered to a fitting room or a designated pickup spot.

Longtime real estate executive Joseph Aquino told the AP that shopping habits evolve as consumers grow older. "We are in the phase where a lot of younger shoppers don't want to go the high street [way],” he said. “They sit around and buy online and that's what we are fighting against."

CoStar Group, a real estate research firm, examined retail leasing at luxury corridors in seven cities: Miami's Lincoln Road, Los Angeles's Golden Triangle, Chicago's Magnificent Mile, Washington D.C.'s Georgetown district, Boston's Newbury Street, Manhattan's Fifth Avenue and San Francisco's Union Square. The firm found the vacancy rate rose to 7 percent last year from 3 percent in 2017 — greater than the 4 percent rate those areas saw in the Great Recession, the report noted.

“Last year, the net number of retail square footage lost in these corridors topped 353,000, surpassing the 214,000 loss of square feet seen in 2009,” the report noted. “The loss was exaggerated by Macy's closing of its big store in San Francisco's Union Square, but CoStar found that excluding that store, every high-end shopping corridor it tracked saw a weakening trend.”