Banana Republic plans to close its largest store in Hawai'i this month — its flagship property in Waikiki that becomes another casualty of the deepening economic slowdown that has been particularly hard on tourism-dependent enterprises.

The two-story store in King Kalakaua Plaza at 2080 Kalakaua Ave. is scheduled to close Jan. 26 after 11 years in business.

The decision by Banana Republic's parent company, Gap Inc., will leave only Nike Town in a whole block that once was envisioned to pull significant pedestrian traffic toward the 'ewa end of Waikiki.

Stephany Sofos, a local retail analyst who has tracked Waikiki since the early 1980s, said pedestrian traffic has shifted a bit toward the 'ewa end in the past couple of decades, but not as much as developers had anticipated.

"After (pedestrians) pass Lewers Street, the traffic drops dramatically," she said. "It's location, location, location."

Sofos said the downturn in the economy and visitor arrivals that began last year probably took an additional toll on the Banana Republic store. "It's just a tough time for retailers," she said.

Catherine Rhoades, a Gap Inc. spokeswoman, said the company doesn't talk about reasons for specific store closures. The number of store employees also was not available.

Gap Inc., which is struggling with sales declines but remains profitable, last May announced a store realignment plan for its fiscal year ending in February that called for closing 115 stores and opening 100 stores.

Rhoades said the company hasn't announced any other plans to close more Hawai'i stores in the Gap family, which also includes Old Navy.

There are four other Banana Republic stores in Hawai'i, at Ala Moana Center, Kahala Mall and Waikele Premium Outlets on O'ahu and at The Shops at Wailea on Maui. There also are three Gap stores and three Old Navy stores in the state.

The Waikiki Banana Republic store opened in late 1997. At the time, the 23,500-square-foot store became one of four flagship locations under the brand, joining mega-stores in Las Vegas, Chicago and San Francisco.

Banana Republic's flagship properties featured deeper and wider product selections compared with regular stores, and also served to introduce new merchandise. The Waikiki store also carried a line of bedding, towels, glassware, picture frames, flatware and other items not carried by most other stores in the chain.

When the store opened, it was the first tenant at King Kalakaua Plaza, an 81,000-square-foot shopping complex that replaced the old Kuhio Theatres on the block bordered by Kalakaua and Kuhio avenues and Kalaimoku and 'Olohana streets.

The $42 million complex, which features underground parking for 200-plus cars, became the first new retail center in Waikiki developed in more than 20 years. Developed by Honu Group, it aimed to become a new Waikiki destination but largely failed to achieve long-term success.

Tenants initially lined up for the project were Nike Town, Banana Republic, Steven Spielberg's undersea-themed restaurant Dive! and mega-stores by Virgin Records and Levi's.

Ultimately though, only three followed through: Nike Town, Banana Republic and a sports-themed restaurant called Official All Star Cafe that was affiliated with Planet Hollywood International and backed by prominent athletes including Shaquille O'Neal, Tiger Woods and Ken Griffey Jr. A third-floor tenant space envisioned for a restaurant has never been leased.

All Star Cafe struggled, and after two years was sold to Honu Group, which transformed the spot into sports bar All Star Hawaii. The bar closed about four years ago. After Banana Republic closes, three of four tenant spaces will be empty.

Sofos said finding strong new tenants could lead to a revival of the project as a destination location that attracts traffic from consumers seeking out stores as opposed to those just passing by. "As a destination location you need major tenants," she said. "If it's only Nike Town and Banana Republic, that's not enough of a draw."