Minding the Gap (GPS) - Get Report, Wall Street's favorite specialty chains are trying out a new way to grow.

As the specialty retail empire that blazed a trail for many of the chains that would follow, Gap threw up stores all over the country and built its brand into a national icon. Now its sales are in a tailspin and its stock price is in a funk. The company says a quick fashion fix in the back half of this year will reverse the situation, but some observers say its namesake chain just got too big and lost its customers in the process.

These days, Gap's competitors are being more selective as they open new stores in order to avoid the same fate. As growth for their principal chains slows, companies like

American Eagle Outfitters

( AEOS) and

Abercrombie & Fitch

(ANF) - Get Report

are churning out new store concepts as a way to maintain their brand and satisfy Wall Street's growth demands at the same time.

"As retailers continue to look for growth , people are realizing that the old Gap model of having stores everywhere, like

Starbucks

does, is clearly not working," says Christine Chen, a specialty retail analyst with Pacific Growth Equities (she owns shares of Gap). "Selling clothes is a lot different than selling coffee. Rather than hurt their brand by opening too many stores and taking away their coolness factor, retail companies are realizing they have to invent new brands."

With about 800 stores in the U.S., American Eagle plans to launch a new chain called Martin + Osa, with five store openings scheduled for the back half of this year. The stores are expected to sell stylish sportswear, with an emphasis on comfort and an active lifestyle. Meanwhile, Abercrombie is still developing its fledgling Ruehl chain, which currently has a dozen U.S. stores catering to customers aged 22 to 35 who might have outgrown its other brands.

Bebe

(BEBE)

is testing an accessories store called Neda that it may roll out in 2007, and

Limited Brands

(LTD)

is experimenting with a handful of C.O. Bigelow stores, a high-end beauty products chain.

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.

Elsewhere,

Pacific Sunwear

(PSUN)

has generated buzz with its new footwear chain, One Thousand Steps.

Aeropostale

(ARO)

runs 14 Jimmy'Z stores in 11 states.

Ralph Lauren

(RL) - Get Report

recently opened five Rugby stores, serving kids. Even

Tiffany

(TIF) - Get Report

, the high-end jeweler, runs a fledgling chain called Iridesse that sells pearl jewelry.

"Look for more new retail concepts coming out in the back half of this year," says Dana Telsey, the CEO and chief research officer of Telsey Advisory Group. "A lot of specialty retailers are maturing in their growth cycle, and this is how they're going to find new ways to grow."

To be sure, Gap has increased its stable of retail concepts over the years to include the Banana Republic and Old Navy chains. Most recently, it launched a chain called Forth & Towne aimed at serving women from the baby boomer generation. But with more than 1,200 stores in the U.S. bearing its namesake brand, Gap has pursued a growth strategy that may have been counterproductive in the long run.

Chen says there are about 350 malls in the U.S. that she would give an "A-rating" as destinations to shop. Add to that some choice downtown locations, and that brings the number of top shopping areas to around 400. Then, she says are 400 to 500 "B-rated" locations, bringing the count to around 900.

"Beyond that, you're going into

C-rated malls," says Chen. "That's going to take away from your brand as a fashionable, specialty retailer."

Except for a few scattered exceptions, Gap has consistently posted declines in monthly same-store sales for a year and a half. The company did not return a phone call seeking comment for this story.

Chico's

(CHS) - Get Report

, the red-hot women's clothing chain, launched a concept in 2004 called Soma, which sells lingerie to female boomers that have outgrown Victoria's Secret. Soma now has 19 stores, and Michael Smith, Chico's vice president of investor and community relations, says the company expects to open between 33 and 36 new stores this year. Next year, the company plans to open 55 to 65 new Soma stores.

"We launched the Soma brand because we saw it as a brand expansion where there's not a whole lot of competition from a specialty store perspective," says Smith. "Our customer is primarily shopping at department stores for their intimate apparel needs. Ultimately, there could be a Soma store wherever there is a successful Chico's store, but who is to say how much the competitive landscape will change in the future."

Currently, there are 550 Chico's stores, and the company says it could eventually grow that number anywhere between 700 and 850. It also recently acquired a small chain called Fitigues, with 11 stores in the Southwest that sell casual relaxation wear for women. Three years ago, Chico's acquired a retail chain called White House/Black Market with 107 stores. Now, the chain has 220 stores.

"We're pleased with our portfolio brands," says Smith, when asked whether Chico's has plans for any more concepts.