Did you ever watch the Sopranos episode where Richie racks up a massive debt? Tony takes over the business and racks up even more debt. In the end, the store goes out of business due to the enormous debt load.
But there was a bigger problem than the debt, Richie’s gambling.
A lot of retailers are in trouble right now and it is easy to say it’s all the debt, but there’s a bigger problem, the hollowing out of the middle of retail.
This past week, Nine West, a shopping mall staple, declared bankruptcy. They were founded by Vince Camuto in the 70’s with fashionable footwear at popular prices. As women entered the workforce, Nine West was able to give them a reason to walk down the mall from the department stores to get their shoes. They were named Retailer of the Year by Footwear News in 1994.
By 2006, they had upwards of 700 stores. The following year, Andrew Cohen, their CEO said Nine West brands accounted for 10.4 percent of the women’s footwear market.
That’s huge. What happened? Do women no longer wear shoes? Of course they do.
It’s easy to explain that women are all online but that’s not what reports are telling us as online seems to be holding at around 19% of retail sales.
What does a specific brand offer to a shopper?
Product brands have mojo because they are manufactured a certain way and that way is a guidepost to the consumer. If you have a good experience wearing Nike, you’re inclined to look for and buy Nike again. If you have a rotten experience, you will avoid them.
This works for products and stores, as The Retail Doctor Bob Phibbs explains in his most recent blog.