About a decade ago, I came up with an “idea” of opening a shopping mall filled with stores I loved that have gone out of business. Of course, I never imagined retail institutions like Circuit City, Linens ‘n Things and Sharper Image could be tenants in my fantasy shopping center. Yesterday – a day the media are calling Bloody Monday – brought even more devastation to the retail sector and beyond. Seven companies (including retail giant Home Depot) announced layoffs on January 26th, totaling 71,400 jobs lost.
Is anyone winning the retail battle?
The list of retailers in my make-believe mall ebbs and flows, but one constant is a store that existed in The Columbia Mall in Maryland called Cedar Post. They sold select must-haves from trendy designers (e.g. Guess? and Esprit – it was the ‘80s). If they had a private label brand, it wasn’t the focus. Their retail strategy reminds me of a current store called Buckle that’s actually thriving despite the economic downturn. According to a recent article in BusinessWeek, the main secret to its success is that 70 percent of the chain’s products are from independently owned clothing lines – such as Affliction Clothing and MEK Denim – as opposed to designing and selling branded merchandise. This “shallow and wide” inventory approach enables the company to respond to the rapid changes that are the norm in the fashion industry. The chain has 388 stores and 2008 sales were up nearly 30 percent. Another trend-bucker referenced in the article was Aeropostale.
Yesterday, when I arrived at the office, I noticed a clothing boutique on the first floor of our building was cleared out. While I found it surprising that there was no notice or liquidation sale, I assumed it too was a victim of the retail meltdown. I had mentally added two (the owner and her assistant) to the 71,400 jobs lost yesterday. Imagine my delight when I found out this afternoon that she simply moved her shop to a better location where she’ll have more foot traffic.
There are clearly lessons to be learned from those who are surviving these tough times. At a minimum, they seem better prepared to listen and respond to the voices of their customers. And I – normally the eternal optimist – need to remember not to always assume the worst.