I passed an interesting store the other day. I had to chuckle to myself as I walked by as the name seems to sum up what the economy is struggling with at the moment. These are interesting times for sure, and the fact that we have been so “Lavish” and that has led to a bit of “Squalor” has humbled a lot of people and re-set quite a few expectations.
The way I see it, we have spent a ton of money on some very overpriced merchandise. We have constantly traded up and traded across as there have been so many copycat merchants that have risen with the high tide of the stock market, huge bonuses, easily available credit and rising housing values that the expression about “a rising tide floats all boats” is appropriate to explain what has happened at retail.
Now, the fallout will begin and the copycats will have the toughest time. If you do not have a unique proposition or occupy an important piece of real etate in the consumer’s mind at the moment, you will struggle when the spending stops and the constant sales flow turns into chinese water torture.
Independents that have romanced their customer and have built personal relationships with them should be able to survive this downturn. Those powerful brands that have built an authentic reputation and have been consistent about delivering on that reputation should also do alright. Gap could have been one of these but they have been inconsistent. I would say Urban Outfitters and their other brand Anthropologie have mastered their domain and should be able to perform well over the course of the next 12-15 months of a predicted tough retail climate.
Of course we all know the obvious that the bargain brands will gain market share at this time in the economic cycle as Wal-Mart, Target and TJX should all thrive. But the corollary to that is what will happen to the Neiman Marcus’ of the world? My hope is that they have not become too overwrought with overhead or inventory and they can weather some significant negative comp sales. The sales will come back to a certain extent – maybe not to the level it once was, but business will be solid as long as they stay true to their unique proposition and the high end retailers do not become tempted to change their stripes.
So what about “Lavish and Squalor” the store? It is a neat blend of a full range of casual unisex apparel, accessories, candy, Vitamin Water, and gifts. It is aimed at the 17-27 year old who is a bit funky, urban and casual. It looked like there is a grunge influence but it is tasteful and more mature than the average store of that type. The music, the environment are spot on for their target market (er…not me) and the staff seemed cheerful and interested. The visuals were exciting and unique.
And I love the name!!!