Retail analysts and executives have long known that the U.S. is "overstored," with far more retail space per capita than other countries. More specifically, one could say the U.S. is "overmalled," with roughly 1,200 malls (depending on exactly how you count). So-called "A" malls have generally remained quite healthy, with high occupancy rates and strong sales per square-foot. Despite representing only about a quarter of the U.S. mall universe, those properties hold around 80 percent of the total value of all U.S. malls. Of the remaining 75 …
Operations
Grey Is the New Black
An increasing number of major brick-and-mortar retailers-led by Walmart, Target, Best Buy, and The Home Depot-will not open their doors on Thanksgiving, giving employees the day off and pushing more spending to digital channels. What's more, fewer promotions have been targeted specifically for the day after Thanksgiving, today, traditionally known as Black Friday. Over the past few years, our ramped-up consumer culture has expanded Black Friday from a one-day, to a weekend-long, to a week-long event. However, in the year of pandemic, Black …
Can Off-Price Retail Recover from Covid-19?
Over the past quarter-century, the growth of off-price has been one of the biggest long-term retail trends in the U.S. Neither the 2000 tech bust nor the Great Recession of 2008-2009 interrupted the growth of this market segment. The increasing size of off-price relative to the full-price retail ecosystem (and especially department stores) hasn't hindered growth, either. During the decade ending last year, industry leaders TJX Companies, Ross Stores, and Burlington Stores all roughly doubled their sales. However, that long-term growth trend …
JC Penney: Another Rescue Effort
Alas...JCPenney was rescued from Chapter 11 by two of its largest landlords this week. Simon Property Group and Brookfield Asset Management now have the responsibility of managing Penney's unwieldy fleet of 690 stores (following the imminent closure of another 146)...many at least 20 years past their prime and continuing to fade away in the public consciousness. A Fool's Folly? The question must be asked: Why would two of the world's largest and most respected shopping center owner/developers commit $692 million, and an unspecified amount of …
Coronavirus Shakes Up and Reshapes the Retail Ecosystem
The pandemic that took the U.S. retail market by storm in March changed how consumers shop and will have long-term effects on the retail industry. Some of these behavioral shifts were a long time coming for an industry that is not known to be agile and nimble. The industry had been put on notice for some time that the real CEO in charge is the consumer, and the nimbleness of the industry will be thoroughly tested through the holiday and into the next few years. With the benefit of hindsight, let's take a look at how retail has been reshaped …
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JC Penney: Too Big to Fail
I'm no Andrew Sorkin, who given the chance, could probably make another blockbuster book, Too Big to Fail: JCP the Sequel. However, he would probably have to give the story a massive spin. While the notion of "too big to fail" might peak interest in the retail world, it most certainly doesn't contain the kind of drama, suspense, the edge of crisis and sheer magnitude of a potential economic collapse of Great Depression proportions, as Sorkin was able to brilliantly narrate in his famous book. So, I will take a shot with a mere article-sized …
What to Do About Gen Z’s Consumer Power
Generation Z never did what marketers told them to. This is especially true when it comes to where they spend their hard-earned cash during a global economic meltdown. Gen Z consumers are still the largest consumer demographic, falling between the ages of 7 and 22 and controlling 143 billion in spending power pre coronavirus. However, the members of Gen Z that are still making money during the pandemic are bifurcated into those that have been consistently spending online, and those that are holding off in hopes of eventually spending what …
Are Department Stores Getting the Wake-Up Call on Inventory Management?
Amid a disastrous second quarter for department stores (and most apparel retailers, for that matter), one company stood out: Dillard's. Dillard's didn't exactly have a great quarter. Retail sales declined 35 percent year over year, and the company posted a net loss of $8.6 million. However, that was actually a smaller loss than what Dillard's reported for the comparable period in 2019. (The second fiscal quarter tends to be a seasonally weak period for the company.) Aggressive inventory management actions were the reason why Dillard's …
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