A little research on my own revealed the following recent bankruptcies or closings: Bailey Banks & Biddle, Fortunoff, Whitehall Jewelers, Wickes Furniture, Z Gallerie, Lillian Vernon, Linens 'n Things, Goody's, Mervyn's, Boscov's, Mrs. Fields, Gottschalks, Ritz Camera, Drug Fair, Filene's Basement, Bachrach, Oililly, Eddie Bauer, Crabtree & Evelyn, Virgin Megastores. And I'm betting there are a great many more teetering on the edge.
Last night I attended a sharp panel discussion in San Francisco hosted by The Luxury Marketing Council on the disquieting topic: "Discount or Die?" Moderator Alf Nucifora of the Council kept a tight rein on four Bay Area panelists who debated the topic and kept returning again and again to the cautionary example of retailer Saks Fifth Avenue and its repetition of sales, discounts, and savings events.
Karla Martin of Booz & Co. made the point to the panel that Saks had indeed damaged its luxury brand status irreparably not just by discounting but by publicly flaunting its discounts and discount rates in ads, mailings, etc. She compared the sinking of Saks into discounting its new receipts in season against the recent Neiman Marcus email to its customers announcing 'silent sale' discounts on merchandise from the previous season-- one is brand death by discounting (Saks) and the other is simple clearance (Neiman).
When a brand loses its place in the market, when it disappoints its customer base and slips accidentally and inevitably toward a new shopper in order to stay alive, its options become fewer and fewer. (I personally watched Casual Corner and Petite Sophisticate become addicted to the crack cocaine of 50%-, 60%-, 70%-off pricing in order to incent dwindling store shoppers who in turn were attracted, ultimately, only to the percentages; both chains spiraled into liquidation.)
I have to wonder when Saks, which has been sold and repackaged multiple times in recent years, will join that list of bankrupts up above.
--Timothy Cohrs
www.TimothyCohrs.com
1 comments:
Hello Mr. Cohrs.
I'm the sole employee of Lanamation LLC, providing GIS support, technical graphics and research to commercial real estate attorneys, developers, and brokers. My business focuses exclusively on central Texas, and largely on retail centers.
I don't play golf, but most of the people I work for do, and they pretty much intend to continue playing for about three more years.
The rate of information technology change has become so fast that when these guys get back to work they're going to have a radically different set of tenants from existing centers. Think about it. Virtually no development for three or four years and that whole time cultural trends in the flow of information, money, and transportation continue accelerating. This transcends the bankruptcies. From branding strategies to the physical site plans of retail centers, it's all gonna change.
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