Banana Republic bailing out of Magnificent Mile

Clothing store joins an exodus from Chicago’s highest profile shopping strip

Amancio Ortega and 744 North Michigan Avenue (Getty, Google Maps)
Amancio Ortega and 744 North Michigan Avenue (Getty, Google Maps)

Another retailer is leaving Chicago’s Magnificent Mile, handing a bunch of space to backfill to landlord Pontegadea, the investment arm of the Spanish billionaire Amancio Ortega, founder of the Zara fashion brand.

JLL has been hired to find a replacement tenant for the Banana Republic store at 744 North Michigan Avenue, Crain’s reported. The store, which is located between Victoria’s Secret and Ralph Lauren, will remain open until Banana Republic’s lease expires early next year.

The clothing brand, which has had a store at 744 North Michigan Avenue for more than a decade, joins a wave of retailers exiting what was once the city’s most important shopping strip.

“Michigan Avenue has turned into nothing more than a regional mall,” JLL Managing Director Peter Caruso told the outlet. “There’s nothing exclusive about the brands” that remain there.

Since the beginning of the pandemic, major tenants like Gap, Macy’s, Uniqlo and Timberland have left empty spaces along the Mag Mile. The vacancy rate on the strip rose to almost 29 percent this summer, up from the 15 percent vacancy before the global health crisis.

The soon-to-be-vacant Banana Republic store spans 39,000 square feet across four floors. Such large-format stores have struggled compared to smaller retail more geared toward luxury and boutique tenants, both around the corner from the Mag Mile on Oak Street and in North Side neighborhoods further west from the lakeshore such as Wicker Park and Bucktown.

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Some good news for Mag Mile landlords came in June, when Canadian women’s clothing brand Aritzia leased the former Gap store at 555 North Michigan Avenue in the biggest retail deal on the strip since 2015. Swarovski, the Museum of Ice Cream and It’Sugar have also recently moved to the Mag Mile.

Also, Banana Republic’s soon-to-be-former landlord recently signed a 10-year lease renewal for the Tiffany jewelry store two doors down. In addition, Ralph Lauren recently renewed its lease in the building.

Another hit could come soon for the Pontegadea owner as last year Victoria’s Secret said it was considering closing its Mag Mile store. The lingerie brand has three years left on its lease, but Caruso is also marketing that 23,000-square-foot space.

Last month, Pontegadea made a big splash outside the retail sector with a purchase five logistics properties from Realty Income across the U.S. for about $722 million.

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— Victoria Pruitt