The Nation’s Biggest Retailers Face An Inconvenient Truth: An Imperiled Profit Model
Don’t let those rosy holiday numbers fool you. They mask dark times for the nation’s biggest chains, and the inconvenient truth is that there are no easy answers. Just because the American consumer was in a generous spending mood over the holidays, doesn’t mean retailers have reason to be jolly. Indeed, the 2016 holiday season will be both the last hurrah for a spate of merchants and a moment of reckoning for others. For one, 54-year old The Limited chain is liquidating its 250 clothing stores, while American Apparel is selling its brand in a bankruptcy auction to Canada’s Gildan Activewear, only to leave behind its 11o stores. Meanwhile, chains are shutting a glut of stores, like Macy’s and the dying-a-slow-death Sears, as each announced yet another round of store closings, 68 and 150, respectively, just as 70 CVS drugstores will go dark. The closures follow weak holiday sales results from Macy’s Kohl’s, J.C. Penney, Ann Taylor, among others. Retailers’ struggles have been ongoing, and are now routinely attributed to a familiar series of tsk-tsks: Stores are serving up lackluster merchandise; they’re failing to adapt to the rise of e-commerce; they’re operating dated stores in waning malls and lack exciting “experiences.” And while those missteps do reflect what’s ailing many chains, as a blanket assessment of the U.S. retail scene, they don’t tell the whole story, the one that’s still being written. The truth is more “messy,” as Van Jones might say. Read more at Forbes.
