In the past few days, both Walmart and Target announced they would not be open on Thanksgiving this year. The decision is in response to the coronavirus, and the fact that the crowds that holiday-season sales draw would not be prudent. “Deal hunting and holiday shopping can mean crowded events, and this isn’t a year for crowds,” Target said in a statement.
There’s also a sense that in-store workers, overwhelmed with months of changing regulations and on-the-job hazards, collectively deserve a proper day off. Walmart noted this in its announcement. And Dick’s Sporting Goods, which also announced Thanksgiving Day closures, also extended its coronavirus pay increases through the end of the year, noting, “We will continue to do all we can to support [our employees] and show our gratitude.”
That’s the question asked by the New York Times, which posits that as many as one in four malls in the U.S. could close entirely as the department store anchor-tenant model teeters.
According to industry researcher Deborah Weinswig, the article says, “the malls that are able to withstand the current turmoil will be healthier — better tenants, more inviting and occupied — but … about 25 percent of the country’s nearly 1,200 malls” could close entirely.
Real estate experts see opportunity in the closing and not just dread: malls can be reinvented, as housing, offices, local markets and other concepts. But they may not be the shopping centers that defined late-twentieth-century American culture.
From the Wall Street Journal, a prediction that shuttered brick-and-mortar stores will be reborn as ecommerce distribution centers. Early indications are interesting: no foot traffic, but an increase jobs, as the retailers need more hands to pick, pack and ship than to staff cash registers.
The New York Times headline is borderline triumphant: Flour and Toilet Paper Are Back at N.Y. Supermarkets! But they buried the lede, which is a nifty deep-dive into how store selection has evolved the past few months.
The Times, which also references a good round-up of supply changes the Wall Street Journal published last month, goes long on manufacturers’ refocusing on high-demand products. With supply chains feeling strain, and grocery stores still experiencing above-average sales volume, brands have put their energy into keeping top items in stock.
“Hershey’s has had to adjust to consumers wanting more chocolate bars and less gum,” the Times notes. “Shops that might have stocked six types of canned tuna fish are down to three or two.” Everything from toilet paper (still) to meat is subject to scarcity and a narrowed selection. Left unanswered is the question of how long store shelves will stay in this state.
This site is prone to publish bankruptcy news, as any kind of corporate bankruptcy filing is likely to lead to store closings.
However, a chapter 11 bankruptcy is actually a financial tool to help save a company, in a more macroeconomic sense. Stores may close, jobs may be lost, but if a thousand-store business can emerge with 700 locations and a viable business, that’s far more preferable to the company simply closing its doors for good.
The back half of Rob Walker’s Marker piece on the Pier 1 bankruptcy explains this nicely, and is worth reading. (Side note: Rob Walker and Marker are both highly recommended parallel reading to After Shopping.) In short, chapter 11 means a company “seeks a court-supervised process giving it some form of relief — a way to start over.” For its part, Pier 1 filed for bankruptcy in January, ahead of the pandemic, a process that was undone when stores had to close this spring.
We will see more bankruptcies and liquidations in the coming months, but not all of them will be worst-case scenarios; like you, this author is hoping for triumphs and clever new ways of doing business as we move forward.
The New York Times reported on small businesses weathering lockdowns in America, and how an increasing number of them may choose not to reopen, due to both economic and physical complexities.
Stores weathering the pandemic are having a hard time seeing a viable future, especially when governments reopen stores, only to close again—a situation that may persist for months.
Some owners also find the constant changes in requirements difficult to follow, as guidelines for safety are rapidly evolving. This is to be expected, but that doesn’t mean it’s easy.
From the article: “Many small businesses are also finding it onerous keep up with constantly changing local guidelines, while others are deciding that no matter what their local officials say, it just is not safe to keep going. Gabriel Gordon, the owner of a tiny but popular barbecue restaurant in Seal Beach, Calif., decided to close permanently after studying the restaurant’s layout. He had determined that the kitchen would never be safe for multiple staff members to occupy at once while the virus was still active in the area.”
This action is an early indicator of predictions like this one, from April, that big stores will get bigger as mom-and-pop stores struggle to adapt. Local establishments are hoping that government assistance and clarity will help them survive.
Brooks Brothers’s bankruptcy filing (see previous post) is the latest and largest apparel company impacted this the summer. But several other brands have encountered headwinds, some with more drastic outcomes.
Last week, Lucky Brand Dungarees filed for chapter 11 bankruptcy protection, citing the coronavirus’s impact on sales. Lucky announced at least 13 store closings, and has lined up a stalking horse bid to sell its physical assets as well as the brand rights.
Fellow denim label G-Star RAW also filed for bankruptcy, but with more optimistic plans. The company noted its relatively low debt and sees an opportunity to rethink its retail approach.
More radically, Need Supply and sister label Totokaelo are shutting down entirely. End dates have not been announced, and the company is choosing to close rather than going bankrupt, but the stores will be gone soon.
Also, the G.H. Bass and Wilsons Leather stores are going out of business. Parent company G-III, streamlining its portfolio in the wake of the coronavirus crisis, announced the permanent closure of both brands with liquidation sales to start shortly.
Many other brands have announced store closings of various scale, from Zara (which will close up to 1200 locations worldwide) to Victoria’s Secret (250 store closings this summer and fall, a result of parent company L Brands failing to sell the marque) to Signet Jewelers (as many as 300 store closings this year). Additional stores are covered in the link above.
Legendary retailer Brooks Brothers, which dates to 1818 and has dressed all but four U.S. Presidents, filed for bankruptcy protection today. The company is battling both covid-related declines in shopping and a shift to more casual attire that is accelerating as workers head to the office less.
Brooks Brothers’ filing is notable as it is one of the few large retailers with significant manufacturing in the United States. Last month, the company announced layoffs and posted for-sale signs at its three domestic factories, a response to slower sales during the pandemic.
According to the Wall Street Journal, Brooks Brothers plans to use the bankrupty process to find a buyer. A sale would continue the company’s interesting time capsule of apparel industry consolidation and trends. Its rich domestic history notwithstanding, Brooks Brothers hasn’t been an American-owned company since 1988, when the holding company Allied Stores sold the brand to British retailer Marks & Spencer. For the past 19 years the Brooks Brothers Group has been owned by Claudio del Vecchio, part of the family behind global eyewear powerhouse Luxottica.
That’s the title of a heartfelt post on the Medium publication Zora, which made the rounds yesterday. The piece focuses on how working at, say, JC Penney is a road to women’s empowerment and economic opportunity.
In it, Marissa Evans posits that part-time retail jobs can be advantageous to parents who want to work and raise children on their own schedule (in much the same way that those same part-time jobs are good for students after school). The author also notes a social and emotional component to in-store jobs that warehouse and call-center gigs, poised to expand in the post-pandemic era, may not match.
After Shopping enjoyed this interesting list of retail statistics in Forbes, which also includes an upbeat look at how the industry is successfully evolving in our unique commercial environment.
“Retailers are doing things they never thought they would do, like deliver products curbside,” the article notes, adding that curbside orders have tripled since the pandemic began, with more than half of shoppers saying they’d like to keep shopping this way long-term.