I’m paranoid about shopping. I get irritable. I find it tedious and taxing. People say shopping is retail therapy, but I need therapy after shopping. —Anushka Sharma
I was in a mall last week for the first time in a few months. The day before, venerable mall chain Abercrombie & Fitch had announced they would be closing 150 stores and they started Chapter 11 bankruptcy proceedings. I watched from a small distance as they opened that morning, a noticeable weariness in the person’s posture. There was no better-than-thou attitude and only a weary smile as I passed.
Fashion retail as we have known it in the past may well be in need of hospice care. While it’s not dead yet, the condition of fashion retail shows every sign of having a terminal disease and its recovery, at least in the form with which we have become accustomed. We are already familiar with the problems big department stores such as Macy’s and Sears have had. Now, fashion specific retailers who have been struggling the past five years are beginning to look as though they may be on their last legs. Retail has fallen from grace and we don’t seem to be inclined to restore it, or even let it survive in its current incarnation.
Most recently, GAP is starting to feel irrelevant after they announced earlier this week that April same-store sales fell another seven percent from same time last year. GAP is rapidly running out of options. No one is walking through their doors. I know, I watched, seated in one of the malls comfy chairs. For 30 minutes I sat there. Dozens of people walked past, but none of those even slowed enough to look through the windows. Finch Ratings lowered GAP’s default rating to junk status yesterday, further deflating any energy left in the stock. If they are not in full-scale liquidation by the holidays I will be quite surprised.
So much has changed from when a young Jewish immigrant named Adam Gimble opened his first dry goods store in Vincennes, Indiana back in the 1850s. As he moved from Vincennes to Danville, Illinois and then Milwaukee, Wisconsin, the joke at the time was that profits from one store alone wasn’t enough to feed Gimble’s seven sons. Gimble was a pioneer in the concept of chain retailing, among other things, and the concept around which he built his stores is still dominant in retailing even now.
But retail has never been easy. Movies and popular fiction made the competition between the Herald Square Gimbles and the Macy’s store across the street quite famous, but by the time Miracle on 34tj Street made a big deal about the two stores and their holiday promotions, all three of Macy’s founding partners had been dead over 40 years and the costs of expansion were burdening the company. Both stores went through various iterations in an attempt to survive, but Gimbles closed for good in 1985, and Macy’s sold to Federated Department Stores in 1994. While Federated has kept the Macy’s brand and merged others into that framework, it has still struggled continuously.
Fashion retail is not an easy business, and now that malls themselves have fallen out of favor as a family social destination, the malls are either closing or having to invest millions of dollars in an attempt to get more people through the doors. Tom McGee, president and chief executive officer of the International Council of Shopping Centers, told Associated Press:
“Shopping centers and the physical retail experience is becoming much more experiential. People want to have experiences when they go out. They want to experience restaurants. They want movie theaters. They want that kind of all-in aspect. They want the aesthetics and the look to be something that is engaging and appealing to them.”
Even if malls can make the aesthetics and periphery of a shopping experience more appealing, though, that doesn’t mean that people will actually buy clothing from the same retailers they did 5-10 years ago. In addition to a continuing growth in online shopping, which may grow dramatically if more fashion labels adopt a see now, buy now approach to their runway shows, re-sale stores are taking off, both brick-and-mortar, as well as online, and they’re coming with deep pockets and strong marketing strategies. Contemporary wardrobe styles care little whether the Armani jacket is from this year’s collection or five years ago. To the extent that luxury goods are presumably made better and last longer, they can be sold and re-sold numerous times. Each time a garment is re-sold, that’s cash out of the hands of traditional fashion retailers.
In one sense, it’s rather exciting to know that we’re witnessing a dramatic transformation in the fashion retail business, one that almost certainly is going to benefit consumers more in the long run. At the same time, though, it’s somewhat disheartening to know that some of our favorite brands and retailers may not survive the transition. Progress always works this way, you know. Not everyone survives, and in this case being big might actually be a handicap.
If you’re one of those people who really like A&F or GAP clothing, you might want to stock up now, though. Limited store closings are definitely coming and both brands are on life-support. Last rites will come in the form of deep discounting this fall. Oh, how the mighty and impenetrable have fallen. Keep watching.