Mall Experience Also in Need of a Bailout

Like the markets, a walk through the mall these days is totally uninspiring. I am not sure what came first (the old chicken and the egg theory), but it has taken me an extra week to try and write something about this industry at this time. It seems that the mall is reflecting the markets or the markets are reflecting the mall.

Sure, Abercrombie and Fitch’s music keeps pounding in one’s ears as one walks by; Gap is featuring “Colour” in their windows which is more like them but it has taken them too long to get back to what their core strengths are; most stores still have sale signs in their windows and I am not sure they ever came down since June; American Eagle is featuring their standard BOGO event (which my 14 year old and 12 year old sons took advantage of this weekend); the Nike store looked flat probably suffering from a post-Olympics hangover; Pottery Barn looked empty; and MAC cosmetics looked bright but almost dated at this point.

The only scintilla of activity is in the multitude of cell phone stores featuring the blessed iphone by Apple or the Blackberry Bold. That may be the only energy source in an otherwise lifeless mall experience. It seems that shop owners and their staff are going through the motions awaiting for the clouds to blow over. It feels like everyone in the mall is holding their collective breath until the storm passes. It certainly looks like investors are feeling the same way.

So it is true that the mall reflects Wall Street, or Bay Street or whichever financial hub you care to name. And Wall Street reflects the mall.

Someone needs to break from the malaise and offer something new, cool, fun and affordable. Someone needs to be the contrarian and shock the mall customer into feeling some kind of passion The mall is in need of a bailout – badly.

I now do not believe a bailout will come from any of the larger retail corporations, they need to play it safe and cozy until the uncertainty passes. It will come from some virtual unknown, some small buckeroo who will, all on their own, nail exactly what the customer needs and shake the doldrums from our malls.

I hope it comes soon. For the financial markets’ sake.

TheRetailTherapist

Sarah Palin’s Favourite Store

I am absolutely positive about something: If Bass Pro Shops had an outlet in Alaska, Sarah Palin would have spent a considerable amount of time and money in what would undoubtedly be her favourite store.

Bass Pro is certainly Disneyland for true outdoor enthusiasts who like to catch (fish), shoot (hunt), cook or even live outdoors. It is 100,000 square feet of camouflage nirvana – everything from camo Crocs to camo Under Armour to Redhead hunting socks with a lifetime guarantee is featured at Bass Pro. The amount of inventory and depth of assortment is staggering. I am not sure how customers aren’t overwhelmed when they walk in. I imagine the average time spent in this “warehouse” is off the charts way above average. But it must be a goldmine as they have done most everything right.

Their selection is beyond compare. They have different shops for hunting, fishing, boating, outdoor living and apparel. They even have a section for outdoor cooking and a separate section for food and gift giving – not to mention a home decor corner. They sell ATV’s and boats, they carry extreme tree climber chairs, layout blinds and Ranger Ladder Stand “Luxury Boxes” for hunting. Their selection of guns is second to none and you can pick up something called Broadhead targets while you are at it. You can also practice at a shooting arcade for a little interactive experience.

They carry their own private label branded clothing along with the staples of Carhartt, Columbia Sprotswear and The North Face brands. They also carry the largest assortment of neon orange apparel on earth. The assortment of lures is enough to make fish salivate (if they could) and I observed many fishermen do the same as they stood gawking at the selection.

I visited the store at what must be one of their peak seasons. Never mind “back to school” for these guys, it’s “back to bush” as hunting season opens this month and next throughout North America. There were people carrying baskets and wheeling around carts just browsing the aisles for the latest smokehouse or cross-bow with colourful arrows or rugged outboard fishing rig.

I couldn’t help but think about the experience at other sporting goods stores and attempt to compare the experience with this one. For the outdoor enthusiast, this place is pretty special. I wrote about PGA Superstore in an earlier entry and that might come close, but as large as the Bass Pro assortment is, it is very focused and there is a certain intensity that radiates from every corner of the store. There was a buzz at PGA Superstore, but maybe because golf attracts a more heterogeneous crowd, it lacks that same density of intensity.

Other sports could probably benefit from the kind of focused energy this massive store produces. I still do not understand the math with that much inventory to manage and turn, but baseball, football, basketball, soccer and hockey merchants could all take a page from Bass Pro and aim to match the store experience of this outdoor emporium, if not in size, then at least in emotion, energy and edge.

Wait…Didn’t Governor Palin mention something about being a Hockey Mom as well?

TheRetailTherapist

Being Schooled

Let’s see…if we clear away the debris from a very poor August for most retailers, we see some interesting trends. Gap continues to post negative comps (but are very profitable due to cost and inventory controls – which will catch up to them very soon if they do not solve their top line problems). That’s a continuation of a trend.

The high end retailers of which I include Abercrombie and Fitch, Saks Fifth Avenue, Nordstrom and Neiman Marcus all had tough months. What would be really interesting to know is whether transactions were down or did they have to reduce prices and become more promotional, which meant their retails were lower than last year yet transactions held. It looks like of all the higher end retailers, Neiman’s either held their prices the best or suffered the least amount of traffic declines.

Then there are the hot retailers, which will always buck any ebbing economic trend. Buckle, American Apparel and my guess would be Urban Outfitters (although they report quarterly) performed brilliantly in August. During these times, kids are told they have just so much money to spend and they learn to spend it wisely on the stuff they REALLY REALLY want and these stores are who they choose. Pretty impressive stuff. That is the power of each of their brands that is shining through in this type of environment. I am sure they are the envy of most retailers out there.

As one would expect, the trend towards the “value” retailers is signified by the positive results at Wal-Mart, Costco, TJX (although surprisingly only recorded flat comps), Family Dollar, BJ’s Wholesale Club and Ross Stores posted positive comps in an anything-but-positive environment. These results do not surprise. What does surprise is how poorly Kohl’s and J.C. Penney performed. I guess they are continuing their poor trend this year but with all the uniqueness of offerings and exclusive brand related marketing and price points, I would have expected better results to sway the teens and college kids (or more specifically their Moms). They are obviously not executing where they should be and need to be careful to ensure they stay relevant in this hyper-competitive market.

The biggest surprise to me is Target. They have been bouncing around flat to slightly negative and slightly positive most of the year but with the current state of the economy and state of mind of the consumer, I would have expected them to post better than a negative 2 for August. Even though they were coming off a very good August last year, I expected them to continue to keep pace with Wal-Mart. Does that mean that Wal-Mart is making in-roads in apparel? I am not so sure after walking through a Wal-Mart Supercenter recently.

Interesting times for sure. The kids are not the only ones learning new lessons this time of year.

TheRetailTherapist