Talking Retail
Suddenly, it seems, everyone is an expert on retail. Even my 89-year-old aunt wants to talk about “what’s going on.” She worries that the gift cards she has accumulated for her two favorite stores—Wal-Mart and Walgreens—will somehow become useless. I tell her not to worry. Both retailers are certain to outlive her, and then some.
The obsession with retail is widespread. At a recent dinner party, a guest said he had the “real inside story” as to why Fortunoff had declared bankruptcy. “It’s not what everyone thinks,” he said. “It goes much deeper.”
He then went on to weave a convoluted tale. His information, he said, came “from someone who knows.” The someone turned out to be a neighbor’s 19-year-old daughter who worked at Fortunoff during the holidays. And not too long ago, a friend announced she had the inside track on what was happening at The Home Depot (wait…I didn’t know anything was going on) because she was friendly with the guy in the paint department.
All of this got me thinking…with everyone offering their opinions of the retail scene, I thought I’d put in my own two cents about some chains I’ve been watching:
• Gap Inc.: Is Gap finally waking up to the fact that it can’t live on cost-cutting alone? Speaking at the Bank of America 2009 Consumer Conference, Gap chairman and CEO Glenn Murphy, a man who has seemed largely missing in action since getting the top job, said the chain hasn’t played the hand it was given as well as it should have. Amen to that.
Murphy catalogued the chain’s shortcomings, starting with its namesake division’s unexciting and outdated store fleet and the fact that Old Navy was not gaining market share in today’s discount environment. “Shame on us,” he said, noting that Old Navy’s store design has remained virtually unchanged since it launched 15 years ago.
Murphy implied that changes are in the works. Old Navy is testing two prototypes, and Gap will debut a new store design in the third quarter. Banana Republic has a pilot store and a new design in the works.
That’s all welcome news. I’m not sure Gap can ever regain its cachet, but now — as many of the retailers that took away its market share are struggling — is the perfect time to try. But I’m not letting myself get too carried away. Gap has promised a lot in the past few years, only to fall short on the delivery.
• Abercrombie & Fitch: Frankly, I think Abercrombie is in a pickle. The situation is best summed up by my friend’s 16-year-old daughter Hannah: “It’s too expensive. I can buy three or even four shirts at Aeropostale for what one costs me at Abercrombie.”
Some people think Abercrombie made the right move when it decided not to join the pack and discount in-season product last November. I’m not one of them. I think the chain was playing with fire, giving shoppers an open invitation to visit other outlets. Apparently, many people did just that and liked what they found. Hannah did.
I’m amazed at how the folks running the formerly high-flying chain seem tone deaf to the shift in buying patterns brought on by the recession. As of March, Abercrombie’s year-to-date same-store sales are down 33%.
• Hot Topic: I’ve always had a soft spot for this teen fave, and I’m happy to see it back on top — even if it does owe much of its recent success to a vampire. Whoever decided to hook up Hot Topic with the Twilight phenomena deserves a big raise.
• Talbots: The chain’s turnaround, in the works for some time now, still seems far away. Maybe Michelle Obama can help. The First Lady wore a dress from Talbots on the cover of the May issue of Essence. The dress became an instant best-seller almost as soon as the magazine hit newsstands.