Not the dreaded winter of retail death. No! Arghhhhhhh!
Ok so maybe it’s not that bad but it despite the uptick in the economy and the stock market surging, there has been a recent shake up in the retail fashion world. And the source may be…..to many stores.
Noooooo. Don’t take away my favorite mall.
America has 7.5 billion square feet of retail space. Since 1980 we have seen an increase of 3.3 billion square feet. That comes to 20 square feet of shopping space for every single US resident, including all those high fashion consuming illegal residents. The next closest country by retail space is the U.K. with a whopping 3 square feet per person, followed by France and Brazil at 2 and Germany at 1. Yet another reason to be glad we aren’t German.
Go America, an extra, unnecessary 17 square feet of shopping space per person. Who says we aren’t world leaders.
Oh and that number only includes gross leasable space, not freestanding retailers so the number is actually way bigger.
So what is the cause to the recent spate of retail closings and bankrupcies? Why have more then 1,000 apparel and accessory stores closed or are on their last tottering legs? What has caused Wet Seal, Delia’s, DEB Shops, C. Wonder, Gap’s Piperlime, Kate Spade Saturday, Jones New York, and Caché to all close or go bankrupt within the past two months? The answer for most of them is….. to many stores. Yes we have to many stores.
We have a glut of retail space and too many store options. Sure we all like having choice. Yes we like being able to express our individual style and personality by dressing differently from each other, or in most cases dressing just like a group that we want to be indetified with but unlike other groups. Oh you wear Lucy to the gym, I only wear Lululemon.
As wonderful as choice is, sometimes there is just to much. That doesn’t mean it’s bad to have 27 different tank tees to choose from. It just means the free market can’t support 27 different retailers who all want to sell something similar. If one company can’t keep up with the latest trends and demands they may face being pushed out of the marketplace by a faster, or more popular competitor. At the end of the day, we just can’t support 20+ square feet of retail space per person. Ironically, as quickly as those spaces are being vacated there are other retailers just waiting to snap them up. There seems to be no stopping the desire for expansion. There is actually demand for more space from retailers then we currently have.
Now in some cases such as Gap’s Piperlime and Kate Spade Saturday, their parent companies want to do away with smaller scale disctractions and focus on their primary brands. If something can’t grow fast enough with high enough margins then cut and run and focus on what you know works. I wish I could say a $100 million business like Piperlime was a distraction and has to go. Oh to have such problems.
So what is going to happen next. Hold on as even more stores close down. Perhaps even one of your favorites. But don’t worry. There will be a new H&M or Zara or Wallmart to take their place. The engines of commerce will keep on rolling.