When Primark, the next-gen’s fast-fashion retailer of choice, opened its first U.S. store in Boston’s Downtown Crossing in October of 2015, I said, “Primark’s value proposition sets the pricing bar so low that it will be almost impossible for competitors to crawl under it. And they’ve set the experience and trendy merchandise bar so high, relative to their pricing, that competitors will find it an enormous challenge to simply match it, much less beat it. They own this space.” And indeed, Primark’s value proposition did own its space as it …
Two Things Changing Retail Forever
Triggered by Walmart’s recent announcement that they are launching a delivery service called Walmart GoLocal (that can be shared with any, and all other retailers, including competitors), I suddenly realized that we are witnessing a breakout moment that will forever change the face and defining characteristics of retail. And it’s not just Walmart’s delivery service, because there are several other previous models such as Target’s Shipt. My point regarding these two transformative drivers of change is that they were only visible as mere …
Amazon’s Non-Department Store Launch
Is this Amazon’s breakout retail moment? After testing various retail formats, with some “keepers,” they plan to launch what “is akin” to department stores, according to a Wall Street Journal article. So, I have to ask, is this just another experiment? Or are they going all in, having learned enough about retailing from their test models to plow right into the sector that has been under siege for decades, steadily losing share of market to the luxury space, off-pricers, outlet stores, specialists, including fast fashion, and most recently to …
SaksWorks and SPARC: Victims of Fatal Attractions
I’m not quite sure where I want to go with this. I think we may wind up with many more questions than answers. However, one thing I am sure of is that we are living in crazy times, in many profound ways, including the transformation of the retail industry. The recent formations of SPARC and SaksWorks are crazy-times strategies to “unlock value” (which is often counterintuitive to operating a successful retail business). Retailers or Real Estate Moguls? Let’s start with Richard Baker, Executive Chairman of HBC. We’ve been tracking his HBC real …
Forever 21: Third Try in China, Charmed or Strikeout?
On October 9, 2019, I wrote Forever 21: Cut Your Losses and Die Happily and predicted Forever 21’s demise, and why. And predictably, they slipped into bankruptcy. However, they found a life-support respirator, a collective called Authentic Brands Group, Simon Properties and Brookfield Property Partners, who acquired the brand for $81 million in February 2020. The plan was for Forever 21’s international business to be handled by licensing specialist ABG. The brand was tossed into ABG’s pile of other losing brands. Then, along with Simon …
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The Great Fragmentation and AI: The Case for Neighborhood Shops
If you think of yesterday’s “mass market” as a nice glass bowl, that market today has shattered into a thousand small fragments of glass. This was the opening sentence in Chapter 4 of my co-authored book with Michael Dart, Retail’s Seismic Shift, published in 2017. Easy Come, Easy Go Do you remember the “must-have toy,” or must have latest fashion trend, (probably triggered by John Fairchild splashing the “miniskirt” across the front page of WWD), or the hot jeans brand of the moment? Or how about the many other examples across consumer …
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ABG’S Chief Spinmeister
I thought I was done with my recent assessment of Authentic Brands Group licensing model as well as their SPARC deal with Simon Properties. I have already commented on the idiocy of placing dying ABG brands into dying malls (Simon Properties) to try to prop up a dying JC Penney brand as the anchor in many of their shopping center locations. In fact, I summed up my predicted outcome: “Here is what failure looks like: Acquire a bunch of once-cool brands on the cheap, license third parties to run them, further license them out to a mall developer …
Victoria’s Secret: Too Little Too Late
In 2018 after three years of a steady decline in Victoria’s Secret’s share of market (from 32 percent in 2015 to 21 percent in 2020, according to Euromonitor International), a great awakening occurred among the brand’s leadership. Modern young women had zero interest in trying to emulate the brand’s sexy Angels or wearing soft-porn lingerie to appeal to a male fantasy. Comfortable in their own bodies, whatever their shape may be, they seek natural, authentic and honest products. While a consistent decline in share of market alone should have …