Old Navy is plotting a return to State Street, but this time it won't be the sprawling three-story flagship Chicagoans remember. Parent company Gap Inc. is planning a downsized store on the corridor, more than three years after the retailer pulled out of its longtime Loop home.
According to Crain's Chicago Business, Old Navy plans to come back to State Street with a scaled-down footprint. The move follows a decade-long run at 150 N. State Street, where Old Navy operated a 32,000-square-foot flagship before closing it on January 24, 2023, after choosing not to renew its lease amid post-pandemic headwinds in the Loop, as reported by CBS News. That wasn't even Old Navy's first State Street address — before 2012, the retailer spent 14 years at 35 N. State Street, a block south, in a space now occupied by Primark, per the same outlet.
Old Navy can't simply reclaim its old digs this time. Barnes & Noble opened a 20,000-square-foot flagship in the building Old Navy vacated at 150 N. State Street in August. The store's selection spans two floors, while the third floor is currently blocked, according to Retail Dive. The opening marked the largest Barnes & Noble store in Chicago history, the outlet reported, leaving Gap Inc. to find a new perch on the street instead.
A Smaller Bet Backed by Real Permits
A new permit covers renovation work at a 13,000-square-foot, two-story space at 20 S. State Street, according to Chicago YIMBY. That address sits directly across the street from another Gap Inc. storefront, the publication noted.
It's part of a pattern. Gap Inc. opened a Gap Factory store at 17 N. State Street, bringing its namesake brand family back to the corridor eight years after closing its original State Street flagship in 2017, per The Real Deal. Before expanding, the company tested downtown shopper demand through its Banana Republic Factory store inside nearby Block 37, the report added.
Loop Retail Finally Climbing Out of a Slump
The timing lines up with a broader rebound along State Street. Storefront vacancy on the corridor fell from 35.08% in 2024 to 28.82% in 2025, buoyed by major lease commitments from national retailers, according to data from Stone Real Estate. Across the entire Loop, total retail vacancy dropped to 28.53% in 2025, down from 29.76% in 2024 and 30.13% in 2023 — the second straight year of post-pandemic decline, Hoodline previously reported on Block 37's $30M sale.
Rebased property values are drawing fresh capital too — Edwards Realty Co. bought the 278,000-square-foot Block 37 retail complex at 108 N. State Street for $30 million earlier this month, a 64% discount from its 2012 sale price of $84 million, according to the Chicago Business Journal. Block 37 is also home to Banana Republic Factory, along with Zara and Sephora, the outlet noted.
Hoodline has tracked State Street's uneven recovery for months, from Barnes & Noble's record-setting opening to January's report on vacancy easing as big-name tenants signed on, and April's coverage of an $18 million foreclosure hitting a prime Loop retail corner. Old Navy's planned return adds another chapter to that story — one where a downsized store, rather than a flagship, may be the new blueprint for national retailers betting on downtown Chicago.
