In this day and age, I am constantly reminded of Carly Simon’s iconic song “Anticipation” which actually became famous mostly because of a Heinz ketchup ad in the late 70’s. Carly wrote it while waiting for Yussuf Islam (formerly known as Cat Stevens) to pick her up on a first date.
Not only has the anticipation built for a new blog entry (;)), but in the retail industry today, everyone is anticipating a recovery in consumer spending shortly. Whether or not that happens sooner or later several questions will be answered over the course of the next 12 months regardless:
1) Will Abercrombie and Fitch come down off their high horse and figure out how to lure consumers back into any of their stores? Yes, I was a proponent of their staying the course without markdowns, but I, like most everyone else, never realized the depths that this recession would reach. It is too bad they didn’t think of knocking themselves off (like Gap did with Old Navy in a manner of speaking), because those that did (read Aeropostale and American Eagle Outfitters) have become quite successful and created billions of dollars in market capitalization on their own.
2) When will Gap start increasing same store sales? I am still a fan of their once iconic brands (that includes Gap, Gapkids, babygap, Gap Body, Banana Republic, Old Navy), but I know they are working hard at tweaking assortments and re-designing stores (again). Will it be enough to lure consumers back or have they already been fragmented out?
3) Can Buckle continue its amazing streak? They have yet to fall victim to any recessionary trends and their approach remains the same as it was when they had 5 stores (they now have close to 400). What will they do to continue to comp in the double digits?
4) What will really happen to the high end retailers? Will consumers learn to be happy with less in terms of material things including apparel and accessories? I know consumers will always shop but will their shopping habits be forever altered and shift to better “value” and more economical merchandise? Will the Neiman Marcuses of the world have to close some stores and pare back their reach because of this new reality? Or, will the consumer treat this as a hiccup and go back to the way they were, purchasing high end merchandise with abandon? I gather it will depend on how long the recession lasts and how quickly the equities and housing markets recover.
5) And, finally, what will the mall landlords do? Will they load up their centres with service oriented merchants to fill the gaping holes in their malls or will they leave some of the spaces empty until they can get the rents they need to command? (just like Taubman Centers has always done – by choice mind you) Or will the mall landlords and retailers truly become partners and share the upside in any recovery and work together to forge a “New Deal”?
So, those are some of the reasons why that song keeps resonating in my head as I think about what the immediate future holds for specialty retail and the industry in general…
“And tomorrow we might not be together
I’m no prophet, I don’t know natures way
So I’ll try to see into your eyes right now
And stay right here, ’cause these are the good old days”
I am fine with the waiting, I just hope when the answers come, the red ketchup doesn’t spill all over the place…