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International Locations May Change Formula Retail's Equation

Gap's Athleta on Fillmore was under fire last week for finding the retail formula loophole; photo via <a href="">Athleta</a>
Gap's Athleta on Fillmore was under fire last week for finding the retail formula loophole; photo via Athleta

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Last week, the San Francisco Planning Commission proposed revisions to the city's retail formula. A significant change would be to increase the "chain store" threshold to 20 locations—but to also include international stores into that count. As retail formula stands right now, 11+ U.S. locations require the brand to obtain special permitting and go before a public hearing ahead of opening a storefront in one of the city's restricted zones, like in the Mission and on Fillmore.

According to the report, the reasoning behind the change is to allow local, mid-sized businesses to grow, Mission Local says. But critics are unhappy that the new provision could limit the presence of international brands in the city. "San Francisco is an international retail destination; closing doors on stores with international location seems misguided," Dee Dee Workman, a representative from the San Francisco Chamber of Commerce, tells Mission Local. "People travel from all over the world to shop here."

Another issue on hand is the formula retail loophole. Subsidiaries of larger brands are to be examined based on their individual stores—not on the number of stores owned by the parent company. This is a nod to last year's Jack Spade debacle (although the brand would qualify as formula retail under the new rule that includes international locations). It also continues the possibility for brands like Gap to open stores like Athleta without special permitting.

The Commission will vote on the changes on July 10. Until then, find the full report here.
· Formula Retail Report Pleases All, Satisfies None [Mission Local]
· Is San Francisco's Chain Store Research Bogus? [Racked SF]