LETTERS TO KAREN: A SPECIALTY RETAILER’S PERSPECTIVE ON THE CURRENT STATE OF BUSINESS
Dear Karen,
I’m sure you remember me as the malcontent who only writes you when complaining about your publication, or our industry, or perhaps the entire world. While no one enjoys being portrayed as a curmudgeon, I probably deserve that title, given my generally dour outlook based on 53 years in retailing and some of the regrettable changes that have taken place in our industry during that time.
Let me start out with something positive, such as Small Business Saturday which was created by American Express six years ago and has become a major and an extremely positive event for independent retailers like me. It really works, and it took a large and very powerful financial company like American Express to pull it off. They seem to have made a difference, and I’m very, very grateful.
The trouble is, it’s only one day, and for the rest of the year consumers go back to their old habits of supporting national chains, big box stores and online behemoths like Amazon, eBay and all the websites of all the gargantuan national retailers.
And that’s just the way it is, lamentably. Witness the closing of the 136-year old Straus Men’s Clothing in Fargo, ND and the teetering existence of most of the rest of us. But why is it that magazines such as MR ignore the growing demise of independents and constantly choose to regale us with stories about highly successful menswear stores in exclusive, high traffic locations that virtually ensure some degree of success. My hat is off to those people, admittedly I envy them, but few independents are fortunate enough to have stores in locations where there is a ton of foot traffic and super high-income demographics.
Then we have the issues of internet selling, and a very good case can be made against those who haven’t tried it but complain about it all the same. But here’s another case: What if you try it and it just doesn’t work because consumers are really looking at only the websites of huge companies that have invested tons of money in their online presence. What then? Granted, if you can’t beat them join them, but if you join them and nothing happens what is one to do?
And then there’s this: What about all those vendors (and the woods are full of them) who open their own websites and brazenly sell to our customers? How did that ever happen and why isn’t the industry outraged about it, and why hasn’t MR written about it? If we, by way of example, spend years developing the Allen Edmonds customer and they, in turn, then bombard out clientele with emails calling them to their website for exclusive discounts, how are we supposed to combat that sort of thing? Unfortunately we currently have about seven or eight of our most “trusted” suppliers doing exactly that.
And, here’s another of my pet peeves. How do UPS and FedEx get to dominate the small package delivery service in this country and engage in the most obvious price-fixing imaginable? I mean, every January both companies raise their rates identically, in lock step, and there’s no competition and no recourse, and the FTC doesn’t say “Boo.” Worse yet, when fuel prices spiked, both added a “fuel surcharge” to their published rates. But now that fuel priced have tanked, we still have to pay a fuel surcharge to them. How is that possible?
Shipping charges are becoming a major problem for retailers. They creep up a little more each year and we simply can’t pass them on to our customers. Curiously, the Amazons of the world continue to woo consumers with free shipping. Surely I’m missing something here.
I realize that these are not very glamorous issues – certainly not as much fun as covering a John Varvatos opening, but these are real concerns that ought to trouble anyone in the clothing industry, don’t you think?
Sorry for venting, but these things are currently on my mind.
All the best,
Gilbert Rose, president, The Chelsea Group LLC
Please share with us your insight into current business affairs, we love hearing from you! Read Karen’s response to Mr. Rose’s letter here.
Addressing the vendors that have their own retail websites, discontinue doing business with them. Do not help them with brand recognition. Seek out those resources that do not compete with you. They are out there, seek & you will find.
Gilbert, I am on the wholesale end….and here is what I think….don’t do business with folks that go after your clients online, don’t follow the fashion calendar, follow your local calendar, buy brands that are smaller that YOU can introduce to your customers. At the end of the whole thing the smaller independent store offers two things that no internet based seller can: personal interaction and local knowledge. I go to a store here in LA that is far from me why? They get the best stuff that I like and can’t find anywhere else. Plus they know what I like and let me know about it before its sold. That trumps the internet any day. Oh and the brand I buy from them, Vans!
I completely agree with both comments prior to mine. I would add that UPS Fedex are ripping all of us off but there is another option and they need OUR business because WE OWN the company and that’s the USPS. They do a better job then most people give them credit for, and their pricing is significantly less.
Lastly, regarding the brand mix and competing with the larger retailers. When did good specialty become competitors to big box retailers and massive ecom sites? Specialty retailers are supposed to seek out new and exciting product lines for their customers. I’ve been in this business for 30 years and have been to at least 100 trade shows, and what I regularly see are good specialty stores barely looking at all the new great product and brands and stopping at the same brands selling the majors who are always promoting. Why are you surprised you can’t compete?
Being the son of Gilbert, I concede the point that I just “may” be biased towards agreeing with him. He is, after all, right. The advice received from two readers above is where we are. It is an easier position to take with a company that we are just getting started with, compared to one that we rely on. But there is really no other answer. In our opinion, selling direct is a completely different business plan than developing a network of retailers to represent the brand face to face, with enthusiasm and confidence. The two are mutually exclusive. You can’t have your cake and eat it, too. This holds especially true for the vendors that aggressively hype their websites.
While I share my father’s wish for a publication that was not beholden, the reality is that Karen is in an impossible position. Even if she agrees, she cannot alienate brands that buy ads from MR. We don’t, after all. We respect that, and really appreciate that she printed my father’s letter.
However, the self-serving company line she gets from vendors is exactly that – – – anything they can get at retail is pure profit for them, so of course they want what they can get. Their argument is specious at best. They could and should be righteous about protecting their clan, not insulting us by undercutting and siphoning off what they can get away with. Should these companies opt instead for a “click now to find a fine retailer near you”, they’d build better partnerships, keep the network strong that built them up and could, if respected and nurtured, keep them alive for years to come. But there is no point in trying to convince. If indeed it is true – – – that brands need the revenue themselves to survive – – – it speaks volumes to the true health of our industry.
It’s all just plain mercenary, indifferent to what it does to the independents out here in retail land, and with no interest in recognizing the self-destructive path they’ve chosen. Many are pursuing a plan that by design, eliminates the independent retailer and the sales force that services us. This is no way to build a business, nor to maintain one. So much of what I see looks and feels like houses of cards.
In 1970, there were virtually no national chains. Now, everywhere you go, you see one national chain selling gift cards for every other national chain you can imagine, be it for goods or food. It’s the machine, feeding the machine, and steering the masses, absorbing a larger and larger share of the market. Forgetting how it applies specifically to us little guys, the topic is fascinating and morbidly compelling. The homogenization of America is a very real phenomenon for all but the wealthier. It’s astounding, and sad, and not just from my retailer’s point of view.
Again, the great advice offered is the only course to take, and we’re amplifying that every day. It eliminates the brands that people are most likely to recognize from our arsenal, making it a harder road, but a road less pockmarked with indignity and frustration. It is also a road that one must be VERY resolute and brave about – – – so many of the brands we are dependent on are on-line. But following such a course will make us happier warriors.
Men’s Wearhouse has eliminated the idiocy of the Joseph A. Bank business plan – – – not a single commercial this year that rankles, as floods of people fell for it, over and over and over again. That’s a relief, although not so much so for Men’s Wearhouse! There’s a parallel there: “We know what we’re doing, we don’t need any dinosaur advice” applies to both points. Damage has been done to MW that they may or may not weather, and damage is being done to the indie world of retail. When you come right down to it, not many want to spend any time thinking about issues that fall under the “you can’t fight City Hall” umbrella. The thing is: Yes, you CAN fight City Hall. Yes, you can.
No, not sexy, not cheerful. But honest. We still love our business (our industry), that’s the point. So we are exasperated that so many obstacles are placed in front of us by people that just plain care that what they’re doing is destroying. And they’re getting away with it. And there are far too few that ever say any of these things. Jim Crooks did, several years ago. He had buttons made that said “Stop Competing With Me”, aimed at vendors that did. That’s the ONLY indie voice I’ve ever heard speak anything at all of these issues that threaten the whole industry. He was brave, and so on point.
I have no expectation of action or movement in the right direction, but I do appreciate this forum. And who knows, it COULD be the start of something that smacks of unity and resolve to fix. Meanwhile, I look forward to hearing another viewpoint on the FedEx / UPS issue my dad referred to,
I am enormously happy to see the honest attention paid to this big problem for retailers. It is extreme important to THINK OUTSIDE THE BOX. There are so many great new upcoming designers, myself being one, investing and working to the extremes on finding the best qualities, for unique original designs with all the blood sweat and tears involved on accomplishing to get it done in small limited batches to insure each season a unique freshness. Is not an easy feat while
some do not open eyes to take notice. Gilbert and Peter Rose, I do love your comments! Jim Bourg, yes we are out there working hard and independently, hoping for chance the retailers stop and take a look.
I work for a small manufacturer and I find this whole line of reasoning bizarre. Brands should protect their relationships with speciality stores by not selling product online? How exactly does that protect the store? If I am a brand with 150 SKU in a season and the 2000 square foot men’s store that buys my product can only fit or choose to fit 12 of those SKU, what exactly am I protecting? Those 12 SKU ? Why bother? -because of the “relationship” ? Or, how can I get my brand to grow if the specialty store is unwilling to take a risk on new product I already invested in? What folks like the Chelsea group don’t seem to realize is the world does not revolve around them. There are probably less than 1000 stores left in the country like Strauss’s. There are over 300 million consumers in the U.S. It’s not a hard decision to make. You can’t attribute that decision to “greed” after doing an hour line presentation at a trade show and having a specialty store write a 40 unit order. Brands can’t survive that way, there are just not enough specialty stores. More than a reflection on the state of the retail business, to me this letter just reflects a bitterness that these menswear buyers are no longer the gatekeepers to consumers for brands. The internet dis-intermediates the process of building a brand and how consumers find new product. will all speciality store die as a result ? I don’t think so, but the ones that have failed to adapt to the reality have the hardest time. The notion that a brand is competing with a men’s specialty store by selling product online is a very weak argument in my book. The specialty store’s core strength is the relationships it has with customers, not the brands it carries or the assortment. The brand’s strength is the product and assortment. These compliment each other, they do not compete. Frankly, I would probably NOT carry any brand without an online sales presence simply because that brand would likely not have a clue to what customers want or buy as a result….
Ciao Gilbert, all due respect, greatness never needs to worry… There’s a ton of Pizza chains all around this country and world, that will even deliver to your home, but when you find a great pizza place that makes it right, that’s where you always go when you’re craving and needing this..!! Selling on line was forced on manufacturers, on any given day you can call on tons of better specialty stores throughout the US, and ask them all if they would help buy some great close outs at a ridiculous discount and everyone passes..!!! In my 40 years in the better men’s business, a lot of these stores are not even very loyal…
So like you Gil, they do unfortunately what they need to do to survive..
I remember back in the day when I was a buyer, we were always looking for the best and most unique designs to buy, and than call all our customers so excited on what we all found and bought to share those designs with each of them.
When I was designing neckwear and had the most incredible vintage screen printed ties way before anyone did, a ton of the better stores cut back on mine, saying they were forced to buy some designer knockoffs of our ideas, for fear they would not be shipped their clothing and sportswear buys…!! They all did it to survive, and so do I…!!!
I still make thee best Pizza buddy.. Times have changed a bit, but greatness will always endure… I know you will too Gilbert….!!!