Old Navy has signed New York City’s biggest retail lease so far this year.

The apparel brand plans to open a 55K SF flagship at 50 W. 34th St. next year, according to building owner JEMB Realty. The new Herald Square store will span two floors.

“As we look to modernize the Old Navy customer experience, this new location will enable us to deliver a fresh, immersive, digitally led experience that invites visitors and shoppers from around the world to come play with style,” Old Navy President and CEO Haio Barbeito said in a statement.

Old Navy plans to relocate from its existing location at 150 W. 34th St. It filed a notice with the state Department of Labor last month stating its intention to permanently close the location and lay off 95 employees.

A company spokesperson told Bloomberg those workers will have the chance to apply for employment at the new store, which is expected to open in 2026.

Old Navy's space is familiar to its parent company, Gap, which once occupied 70K SF in the building, called Herald Towers. There is still 50K SF of available retail space available at its base.

“The lease is also a testament to the longstanding relationship between JEMB and Gap Inc.,” JEMB Chairman Morris Bailey said in a statement. “We negotiated the original lease directly with Gap Inc.’s founders, Don and Doris Fisher, and are gratified to be working with the company’s leadership again today.”

Alongside Gap’s real estate team, Newmark Vice Chairman Ariel Schuster represented Old Navy in the deal, while LMJ Realty, a subsidiary of JEMB, represented ownership in-house.

Old Navy's exit cleared the way for 2024's biggest NYC retail lease, Primark's  79K SF deal at 150 W 34th St. Hobby Lobby also signed its first Manhattan lease last year, taking nearly 71K SF at 270 Greenwich St.

Old Navy is known for its casual clothes that are popular among millennials. However, in recent years, Gap and its subsidiaries have struggled due to a fall in mall traffic and a rise in competition targeting younger shoppers. In 2020, the company announced the closure of approximately 350 Gap and Banana Republic stores by the end of 2023.

The brands have tried less conventional shopping experiences in an effort to boost sales. Last year, Gap reopened its Flatiron store at 156 Fifth Ave. with an updated store concept that includes exclusive merchandise alongside vinyl records and books.

Old Navy and Gap continue to operate flagships in the Times Square Bow Tie Building. The brands signed leases for approximately 31K SF each in 2015.