A chain store that sneaked into Hayes Valley by not falling under San Francisco’s law meant to keep such establishments out has resulted in one supervisor proposing rule changes to encompass companies with worldwide locations.
The controversy erupted earlier this year when Hayes Valley merchants realized it was too late to do anything about Swedish-owned GANT Rugger opening a location at 552 Hayes St., the heart of the commercial corridor merchants had long fought to preserve as a unique blend of local independent businesses.
In 2004, Hayes Valley became the first neighborhood to outright ban chain stores, which are defined as any establishment that has 11 or more U.S. locations. Since then, bans have been put in place for North Beach and a portion of Chinatown. In 2007, voters approved a ballot measure requiring chain stores looking to open in San Francisco’s other neighborhood commercial corridors to file for special permits that increase public notification and are appealable to the Board of Supervisors.
When GANT Rugger opened in March, the company had more than 11 locations, but eight were in the U.S. and the rest in Europe and so did not fall under the chain store law.
Russell Pritchard, head of the Hayes Valley Merchants Association and owner for 23 years of furniture shop Zonal, said he has worked with Supervisor London Breed on a proposal to close the perceived loophole. The proposal, which Breed introduced May 21, is meant to address cases in which a company has 11 or more stores worldwide.
“This is a global retail economy and we should not limit our criteria to the domestic market,” Breed said.
The proposal also would include affiliates or subsidiaries of a parent company in the count of total locations.
“Clearly the parent company matters,” Breed said. “The resources of a corporate entity, the rent it can pay, the diversity of products it can bring to the community, do not change simply because the company changed the name.”
She pointed out a store that recently opened in the Fillmore as an example.
“Gap can open a store a called Athleta as it has done and completely circumvent the formula retail restrictions,” Breed said when introducing the legislation.
The proposal as drafted would apply only to Hayes Valley, but it may be expanded.
Restrictions on business types often raise concerns that they would result in empty storefronts. Pritchard said that while chains can pay a higher rent, there is no lack of interest among local businesses on leasing any empty space in Hayes Valley.
“There would not be a storefront sitting empty for a heartbeat,” he said.
Doug Geller, a spokesman for GANT, said in an email that the company has “done our best to help alleviate concerns” by discussing issues with the area merchants and joining the neighborhood association. Geller said the store’s opening is being met by others with praise.
“We continue to receive a positive response from both local and visiting customers since opening our shop in San Francisco,” Geller said.
This is not the first time The City moved to tweak the definition of a chain store. As Chase Bank was rapidly adding locations throughout The City, the Board of Supervisors approved legislation last year to expand the definition to include financial institutions.