EDITOR’S LETTER: A TIME FOR REINVENTION
If you don’t want to fall into a deep depression, don’t read the article in today’s The New York Times entitled “The Death of the Department Store: ‘Very Few are Likely to Survive’”. It goes on to describe the “Shuttered flagships. Empty malls. Canceled orders. Risks of bankruptcy.” And on and on, emphasizing the fact the department stores were in a state of decline for at least the past decade, well before the shutdown that caused March sales of clothing and accessories to fall by half, with April projections even worse.
I don’t want to dwell on the article but allow me just a few highlights:
*Department store cash flow has dropped dramatically. Analysts project that Macys has about four months of liquidity, Kohls six months, JCPenney seven months and Nordstrom, 12 months.
*The entire executive team at Lord & Taylor has been let go; payments to vendors have been suspended for at least 90 days.
*Neiman Marcus is on the verge of bankruptcy with $4.8 billion of debt, expensive rents and a large percentage of their 14,000 employees on furlough.
*E-commerce at department stores is off 40 percent.
*Brands are losing millions of dollars in cancelled orders: fall is on hold and resort has been cancelled. Industry analysts believe that most brands will end up going direct to consumer; surviving department stores will end up leasing space to key brands.
Personally, I’m more optimistic than The New York Times. I believe department stores will need fewer, smaller stores going forward and a good amount of reinvention but I’ve been reading about the death of department stores for my entire career (don’t ask…) and I don’t think that COVID-19 will do them in. Excessive price promoting, perhaps, out-of-season timing, and the need to show short-term profits to shareholders, but I believe this shutdown will allow time for creative juices to start flowing and a new generation of department store merchants to think out of the box.
That said, what an opportunity for local specialty stores! Yes, the next few seasons will be highly promotional with the supply/demand ratio completely out of whack. But people who’ve been on lockdown for endless months will crave human contact: a friendly smile, a home-made brownie, a glass of wine, a hug. And I truly believe customers will react to product that’s special, that’s not widely distributed (yes, there are still brands that don’t sell online), that’s artisan-inspired or handcrafted or has a story to tell. And who better to tell it than independent store owners who live and love and breathe the business. So many of their innovative ideas are now resonating, even while their stores are closed: closet cleanings, style boxes, gift cards with all kinds of incentive/charity tie-ins, Instagram images of well-dressed clients wearing clothes from their store, selling items on Instagram Stories where a client can buy the item through a direct message (DM), and virtual pop-up shops with key vendors online.
Call me naïve but I believe the retail pendulum will soon swing back to more intimate venues with unique product, impeccable service and more inspired ideas than we’ve ever seen. I just wish I could tell you when.
We are so ready when that time comes!!
We then can continue to be in the fashion experience business once again!
The decline of the big box store has been going on for some time. Now ,more than ever ,is the time for the better independent store to focus on better lines that they will not have to compete with online
Fortunately for me, as an independent sales rep,my lines only focus on the better specialty stores; Jack Victor, Hagen,and JZ Richards
Together we will survive and prosper
Good luck to us all
I had the similar thought when I read the article, that this is an opportunity for Main Street retailers, and potentially puts the ball back in their court, where it belongs (in my opinion). For many of the lower to mid-tier department stores the focus over the last several decades has shifted from a quality offering to a strategy that is more concerned with price. You can’t have both typically, and they’ve clearly chosen price at the detriment of quality, which has also hurt domestic manufacturing. The specialty stores are just that, “special”, where you can get an expertly curated selection of premium products with the same level of knowledge and service to boot. I will certainly lament the jobs that are lost at these very large department stores, but I’m hopeful that it swings the pendulum back to Main Street and Smalltown, America. I look forward to seeing everyone open again.
I’m sorry to say having sold department stores for over 45 years, their transformation from being creative and trying new things, giving new young designers the exposure they all needed, and enjoying so much success, was then overcome and blinded as they all of them began hiding behind big advertised designer brands to the point where every department store began to look exactly the same. Then discounting all these brands eventually to complete with one another and close out store chains to the critical point they are all facing today, dinosaurs on the verge of extinction.
It’s sad really and now they’ve all become the low hanging fruit in our industry. They have only themselves for the blame here, not one of them remained true to the core that brought them all the status they enjoyed for decades. We’ve all lost a friend, but kept the memory. “John Denver” 😎
your so right, Karen….
if all the stores (dept. and specialty) re open with selling the season goods through the summer and wait til labor day or later to promote spring/summer goods all will recover and have a better bottom line. vendors and retailers need to work very close to keep the business at a decent level and not open with major promotions….this is the time to re adjust the way we all do business. Try buying a bathing suit July 4th, when everyone needs or wants one? it’s almost not around or it’s 50% off?? why? who’s buying coats and sweaters in July? let’s go back to the good old days when you promoted season goods at the end of the season not in the middle of it. Bring fall in later and run it through the holidays. consumers are buying closer in season, just like snow tires! you put them on the car the first snow storm…. give your customers a chance to buy season goods and not promote them. they have been inside and will love the chance to go out and shop… people will be very happy to get back to shopping and it won’t be because of price….!
let’s all save our industry and work together and make it work. stay positive …..
stay safe and healthy
Ahhhhhhhhhhh a breath of fresh air! Thank you Karen for hitting it out of the box in your great form! On point! I too believe everyone cannot wait to get out, shoppe, dress and feel good, myself included! Mills in Como, Italy are eagerly at the gate waiting to weave and print the new ideas I’ve been working on these long quiet sequestered days. Keeping hope to show at the upcoming shows here in NY, Charlotte and Chicago. Not sure who will be there; but I am being optimistic and as always excited to present new creations. Even the great Kentucky Derby had sadly been postponed; but is also encouraging knowing we will witness that excitement again – it is only postponed as everything else. Just have to be ready!
Don’t get your hopes up Jeff. The public companies suffering now will be selling anything at any price to raise cash flow dollars. They’ll try to stay in business and worry about the losses later. And, if any of the big ones go out, the market will flooded with even more rock bottom selling, not to mention vendors dumping goods. That said, there will be opportunities for the specialty merchants that survive, and new ones that create innovative concepts, after the dust settles. What I worry about is the middle and smaller markets where the only places left to buy clothes for men, at least in the short term, will be Walmart, Target and Amazon. That could lead to an interesting retail revival with much lower rents and operating expenses for the brave ones willing to jump in. I hope all my friends, former colleagues and customers survive, both physically and in business.
Karen you are a wonderful writer and you are right on the money
We have to think positive
Thanks Karen, in these times we need positive outlooks. Here at Blacks we believe all 80 of our client/companies will reopen. I also believe those companies will be here next year, bruised but stronger. Over the years the customer, retailer, vendors relationship has got out of line. It is time for retailers to take control of the customer. The shake out of department store can only be good for specialty stores.
I wish everyone the best and be safe.
This is a perfect opportunity for the speciality stores and brands to course correct and come out stronger. Though we all share clients between speciality stores and department stores in the end we have the stronger part of that relationship. They will not want to navigate the department stores , the large and cold environment is going to feel more so after this time period , less people and social distance requirments and unfamiliarity of strangers around you. Looking to find the lowest price is not our prime client . Our client does not want to navigate that terrain weather it be on line or in store. We have strong relationships with our vendors and those vendors though I believe appreciate us have also depended on department stores for their volume. That is going to change for more than just store closings reasons but for the way the stores have represented the brands and the cadence of receipts and markdowns that have been forced over the last 10 plus years eroding the brands values and profitability. These brands are looking to maintain their integrity and brand value by not being sold on sale all the time. We may all being doing less a business for a period of time going forth but we should be focused on doing it more profitably , we should protect our margins and protect our brands value by not dumping but working through the next few season with civility and looking for the long term . Acting in this way will give us all a stronger outcome and for the long term.
I love every single one of these responses and I’m so proud of the creativity and resilience in our industry. We will definitely survive this shut-down and come out stronger, albeit a bit smaller, at least for awhile. For now, let’s all just stay safe, be kind, and use this time to dream big. I can’t wait to witness the innovation that’s to come. KAG
Karen~
As an independent boutique owner, your article nails it on the head. For some of us this has been the way we have been conducting business, so its great to see your thoughts. You see department stores in Europe, like Le Bon Marche and how they deliver goods & an environment and you see how it COULD be done. Having worked for some of these institutions in the past, I have always seen that they get in their own way through not landing on what are the important points: the client……
” Over the years the customer, retailer, vendors relationship has got out of line. It is time for retailers to take control of the customer. ”
This quote is from Stephen Pruitt
Here is my take on how a retailer can do that.
1. Communication is KEY old fashion telephone call is still the best letting your customers know that you care about them and their families.
2. Of course you better have in place an entire Omnichannels operation by now 2020 an a E-commerce website that’s bringing in sales volume.
3. Your customer data base is worth Gold it’s priceless use it or loose it, if not your competition will reach them through social media advertising.
4. Private label is very important today for an independent clothing & shoe merchants to survive and compete.
Specialty stores are dealing with with their vendors selling direct to customers via websites and online marketing, plus other specialties stores and of course Amazon.. Made to Measure works the same way as a Private Label it’s Creativity.
5. Margins, Maintain Markup is the only way that they can survive and controlling expenses.
6. Merchandise Mix, Customer Mix, Balanced Inventory, Timing of buying and receiving, Reviewing monthly reports.
7. Keep learning from your peers, ask questions and get help.. Know your customers like you know your family..
In Closing it’s been a pleasure being part of the Menswear and Footwear industry for 50 years.
If my family could help any merchants now in reinventing themselves after this Pandemic we are available.
Our 3 Brands are now available to be acquired. We have a complete up and running Omnichannel operation that is up for sale.
Giovanni Marquez Private Label, FashionMenswear.com 20+years ecommerce site, FSBMens Italian Menswear Diverse Clientele
Brand Data and Analytics are available upon request. Gio@fsbmens.com