From The Wall Street Journal:
Retailers’ earnings season has gone from bad to worse. The bleeding intensified last week, with shares of Abercrombie & Fitch plummeting 26% on Wednesday, the biggest percentage decline since the company went public. PVH Corp., owner of brands including Van Heusen, Tommy Hilfilger, and Calvin Klein, dropped 10% that day, too. On Thursday, women’s wear chain J.Jill was down a jaw-dropping 53% and on Friday, Gap Inc. slid 9%.
It is hard to miss what all of these retailers have in common: They are mall-based.
While retailers posted generally strong numbers in 2018, raising hopes of a retail renaissance, this year has seen a reversion to the pre-2018 trend: department stores and mall-based retailers giving up share to discount stores and e-commerce. The perceived renaissance now seems to have been largely a function of lean inventories, not an actual increase in demand. Now inventory is high again, and retailers are resorting to promotions.
Link to the rest at The Wall Street Journal (Sorry if you encounter a paywall)
PG notes that Barnes & Noble has a good number of mall stores.
One significant problem mall stores have is that the high rent needs to be passed along to the consumer. The last time I went and shopped for plain old sneakers, everything at the local outlet mall was $20+ more than at my local non-mall non-big-box sporting goods store. Over time people internalize where they get good deals and where they don’t.
The high rent problem is self-correcting. 😉
But it might be replaced by Maintenance and security problems.
I haven’t been to a mall since the 20th century, other than ducking in the side door at Sears to hit the tool department, and that was more than ten years ago.
Besides the crowding, (made much worse when most of the esplanades were filled with booths) the noise, and the gangbangers, the malls (one has since been torn down) had nothing I wanted to buy.
If the weather was bad, the quarter-mile hike through the parking lot would have you half-drowned or sweated to death before you got to the front door, then the hassle battling the crowds, and then making it back to your car. Even the most trivial purchase turned out to be an exhausting time suck.
The selection is poor, prices are high, and the inconvenience is substantial. There’s nothing there that I need in a hurry, and not-a-hurry purchases by mail order were much more convenient. (internet, nowadays, but it’s still “buy from somewhere else.”)
TRX – I think you might find a distinct lack of crowding and a lot of parking places close to an entrance these days.
I don’t go to our closest mall very often, but that’s been my experience over the last couple of years.
They still don’t have much I am interested in buying. One distinct advantage Amazon has is product reviews. I know some/many are false, but I think I can usually pick out genuine reviews. The reviewers are often more knowledgeable than store staff about products I’m learning about.
I’m sure my buying habits are not atypical. I replaced my bedroom set (delivered yesterday) and all the accoutrements. Yes, I actually went to a furniture store to buy it because I’m not comfortable with spending that kind of money based on a photograph. Also, the delivery people did setup and carted away the old mattress and boxspring and packaging.
One thing I’d overlooked was a new backrest pillow for reading in bed. I’d tossed the old one without thinking about a replacement. (It originally belonged to my son when he was a teenager. He’s in his mid-forties now. It also didn’t match my new color scheme.)
Last night, I was thinking about the coupon from Bed, Bath, & Beyond in my email and considered taking a trip today to buy a new backrest. But BB&B isn’t as close to me as it used to be and I started thinking about how the selection would be limited and possibly that kind of item would be stored up high where I couldn’t reach it. (I’ve run into the high-ceiling display problem before.)
So I hopped on Amazon just to look as I was watching a baseball game. Lots of choices, different colors, and, as PG said, reviews to peruse. So I eventually one-clicked and the backrest will be here tomorrow. I missed next day delivery by dawdling a little too long over my decision, otherwise it would have been here today. Maybe I shouldn’t have finished watching the game first.
I was going to say that George Romero saw this coming when he packed Monroeville Mall with zombies in 1978 for Dawn of the Dead, but I don’t think he realized that the mall itself would become one.
Adapt or die. Mercantile Darwinism in action. Or not.
It’s not all B&M retailers under pressure. As Walmart, Target, Best Buy and other well-run outfits belatedly adjust to online and up their gane, the retailers that aren’t adjusting come under ever increasing pressure.
Of note: Walmart has been using online to move upscale. So who are listed as hurting? Upscale brands.
Consumer habits are changing all over, not just in publishing. Lots of roadkill ahead.
We just had a mall do a drastic refit. They cleared nearly all the small stores out except for a Macy’s and the movie theater and turned it into a lot of restaurants. Another mall closed up shop entirely (it was used to film the second Wonder Woman film).
I think the problem started when the big department stores didn’t try anything new to compete with the online retailers. Instead, they cut back on staff, and now it’s hard finding items like clothing at a Macy’s or J.C. Penney’s if you miss the fall and spring sales because they’re completely out. They seem to be reacting rather than thinking what else they can do.
> drastic refit
We’re down to one functioning mall. One was demolished and the lot was still empty when I was last out that way. One is now some kind of trade school, one is a flea market, and one has a big sign saying “air conditioned indoor storage”.