The impact of a flagship store opening on firm value: evidence from an event study

Sinem Kargin and Lien Lamey

Journal of Business Research, 2025, vol. 199, issue C

Abstract: Flagship stores are being introduced around the world. This study examines the extent to which flagship stores add value to firms and under which conditions. While flagship stores may not directly intend to generate profits at the store level, they can add value to a firm in other (indirect) ways by (i) communicating and reinforcing the brand image, (ii) building partner relationships, and (iii) offering a blueprint for store development. An event study is used to examine 100 announcements of future flagship store openings made by publicly traded companies worldwide (2018–2023). On average, a flagship store opening does not impact firm value. However, if a flagship store is used to showcase the company’s sustainability strategy or to enter a market, this boosts firm value. Conversely, firms selling highly utilitarian products see value decline after opening a flagship store. The presence of consumer-facing technologies in these stores positively influences firm value.

Keywords: Flagship store; Retailing; Event study; Firm performance (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:199:y:2025:i:c:s0148296325004060

DOI: 10.1016/j.jbusres.2025.115583

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