23 Mar Sears, Payless and the Future of Retail
News stories this week indicated that Payless Shoes would likely file for Chapter 11 bankruptcy within the week. Stalwart Sears, founded in 1893 and once the country’s largest retailer, stated in its March 2017 SEC filing that, following a $2 billion dollar loss in 2016 and the sale of its iconic Craftsman brand, there was “substantial doubt” that it would be able to keep its stores open. Closer to home, here in Montgomery County, Maryland, White Flint, a luxury mall that boasted of having Bloomingdales, Lord & Taylor and I Magnin and a recreation of Georgetown in Washington, D.C., was torn down recently to make way for a mixed use development.
Malls all over the country are dying. Yes, there are some exceptions, but as anchor tenants such as JC Penny and Sears close stores, there is less need for shoppers to visit. Amazon carries just about everything, and what they don’t have, another online retailer does. Most retailers have a robust online presence. Thousands of purchaser reviews and comparisons let you know which models to get for the lowest price. And once the clothing retailers can agree on a way to ensure that what you buy online will fit, there will be little need to venture out of your home to get what you want.
What will this mean for retail? We are already seeing the results. Circuit City, Linens n Things, Radio Shack, Borders, Sports Authority, sbarro and Brookstone filed for bankruptcy, all examples of long-established, successful businesses who couldn’t adapt to the changing nature of how we buy things. There are a few exceptions. One area of differentiation is service. Nordstrom, L.L. Bean and Whole Foods top lists for customer service, and are surviving. Zappos, the on-line shoe retailer, excels in shipping. Leveraging the “buy local” movement, some small local sellers can bring in customers who want to support local businesses owned by people they know. Sellers of specialty goods with experts to advise purchasers can thrive.
None of these mesh well with the mall model of lots of stores under one roof with anchor tenants to bring people in who patronize the other stores. There are few “destination” stores any more, when you can get everything from paper clips to a diamond ring online. As someone who grew up in the heyday of malls, it saddens me to know that their best days are behind them, and that we will look back on them with nostalgia.
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