Payless ShoeSource is closing its 2,100 U.S. stores in what will be the largest-ever retailer liquidation when measured by the number of stores closing.
Payless was founded in 1956. In the 1990s the company sold 250 million pairs of shoes a year, in 2018 that number was estimated to be closer to 75 million pair.
Payless went through Chapter 11 bankruptcy restructuring less than two years ago and closed 500 stores. Creditors at the time became shareholders in the restructured company.
The company will begin liquidation sales at its U.S. and Puerto Rico stores this weekend. “We expect all stores to remain open until the end of March, and the majority will remain open until May,” a spokesman said.
The closings will increase pressure on already challenged U.S. retail malls, where Toys R Us, Sears, BonTon, and JCPenney have shut down stores. Payless said its international business, including Canada and Latin America will not be affected..
Like the captain of the Titanic, leadership of failed and failing retailers has been publicly, and occasionally brutally, criticized. In some instances, this criticism is clearly deserved, in other cases not.
It may not be as bad as it seems.
Despite the painful passing and decline of retail industry stalwarts including Linens ‘n Things, RadioShack, The Bon-Ton Stores, Toys R Us, Sears and Kmart, retail chains including Macy’s, Kohl’s, Walmart, Target and other major retailers are showing financial improvement. Macy’s stock price is up 40+ percent year-to-date, Kohl’s is up 30+ percent, and Target is up 25+ percent. The rumors of the death of brick-and-mortar retail have been greatly exaggerated. And, Sears, Kmart and JC Penney are still open for business.
Recently, I participated in the Annual Retail Forum at Columbia Business School where a keynote speaker addressed a question from the audience: “
How would the speaker approach the precarious position of a challenged major retailer? What steps would you recommend?”
The response was,
“Shut it down…they don’t deserve to stay in business.”
This, “throw in the towel,” response brings to mind a key question we should ask ourselves. What would we do if we found ourselves as CEO of a retailer at risk of complete cataclysmic failure? One obvious metaphor is that of being captain of the Titanic. You may not remember, but the Titanic had a bonafide captain: his name was Edward John Smith.
Continue reading “What Can Today’s Retailers Learn from the Captain of the Titanic? Plenty.”
Let’s be careful not to confuse private “labels” with private “brands.”
Private label merchandise is generic goods, sold as a commodity (and commodities have price as their value proposition). Private brands, when properly executed, are truly brands, exclusive to a retailer or channel of distribution, with distinct brand attributes, supported by significant marketing.
Overall, private “label” continues the “race to the bottom,” favoring low cost producers. The problem with the race to the bottom is that you might just win — or worse, come in second.
Continue reading “Private “Label” vs. Private “Brands””
Morgan Stanley predicts that the department store share of the apparel market will drop from 24 percent in 2006 to only 8 percent by 2022.
Many analysts continue to predict that, this year, Amazon will become the largest retailer of apparel in the United States.
Top apparel retailers are ranked as Walmart, Amazon, Target, Macy’s, Kohl’s, The TJX Companies, Gap, Costco Wholesale, Nordstrom, Ross Stores, and JCPenney.
Continue reading “Department Stores & Apparel: The Future is Blurry”