retail news in context, analysis with attitude

The Washington Post has a story saying that "a fresh round of distress signals sounded in the retail industry this week, as another big-name chain announced hundreds of new store closings and still others moved aggressively to recalibrate their businesses for the online shopping stampede."

The story notes that "Payless ShoeSource filed for Chapter 11 bankruptcy and outlined plans to immediately close nearly 400 of its 4,400 stores globally. Ralph Lauren is shuttering its flagship Polo store, a foot-traffic magnet located on tony 5th Avenue in Manhattan, the latest step in a massive cost-cutting effort. Big-box office supplies stalwart Staples is reportedly considering putting itself up for sale."

This follows closures by major chains such as Macy's and Sears, as well as distress signals sent by companies as varied as The Limited ... Hudson’s Bay, the parent company of Saks Fifth Avenue and Lord & Taylor ... Banana Republic ... Abercrombie & Fitch ... Urban Outfitters ... Bebe ... and Lululemon, among others.

This malaise, the Post writes, "has spread even as the economy overall grows stronger and the stock market marches higher." And, "It doesn’t help any of these legacy brick-and-mortar companies that customers are increasingly seeking out under-the-radar labels with a more specialized, boutique feel. The likes of Bonobos, Warby Parker, Shinola and Marine Layer are picking off shoppers that might once have filled their closets with goods from more ubiquitous chains."

And, of course, there is Amazon, which "captured 38 percent of all dollars spent online during the holiday season. The next-closest retailer, Best Buy, had a mere 3.9 percent." And now Amazon is slowly testing bricks-and-mortar concepts that could further expand its ecosystem.

"All of this change," the Post writes, "is not just pushing traditional retailers to reduce their overall numbers of stores — it is also forcing them to re-think what their stores should look like."
KC's View:
To quote Tom Furphy's line from yesterday's Innovation Conversation, this is a matter of "when," not "if." Retailers that do not question every aspect of their businesses, including formats that may have served them well in the past, are the ones that are most likely to find themselves on the road to irrelevance.