In a planet remarkably identical to ours in a time not all that long ago, the mid-priced channel of retailing was the single most exciting, vibrant class of stores in the business.
It was where the fastest growing operations in the industry were, where the latest, greatest merchandising ideas were coming from and where shoppers were gravitating to from both ends of the retailing spectrum.
Then came the Big Bang. In a matter of retail nano-seconds, the entire channel of distribution seemingly imploded. Never before in retailing history has virtually every player in a single space been so thoroughly discombobulated at the same time.
Think about it: JC Penney, Kohl’s, Sears and Target. These are the major retailers in the mid market tier and each has had its struggles over the past 18 to 36 months … some for far longer.
A moribund economy, financial pressures on middle-income households and shifting demographics that are increasingly pulling the country to its two extremes haven’t helped, but ultimately most of the problems are due to some incredibly bad management decisions.
We all know the Penney saga. An attempt to do a dramatic — indeed radical — mid-course correction was a colossal failure and the subsequent reboot under Mike Ullman is plodding along. One of the main reasons it is showing improvement is that the bar was set so low.
Kohl’s should have boomed as Penney busted, being its most direct competitor, but instead its lackluster performance has been even more astounding. Self-inflicted merchandising decisions have been at the root of the problem, but perhaps too the several-decade expansion path it was on covered up a multitude of sins.
The situation at Sears has also been well documented. The retailer that once touted its “Store of the Future” has become an embarrassing store of the past as it increasingly becomes irrelevant to its customer base. The ongoing strategy by ownership to drain cash out of the company has placed merchandising not just on the back burner, but not even in the kitchen.
And then there’s Target. It wasn’t all that long ago that the store was the envy of every retailer in the business. Now it’s mired in a multi-faceted morass of its own making with an empty seat at the top, a barren pipeline of interesting new merchandise and, oh, by the way, a firewall with more holes than Albert Hall.
So, where has that business gone? Just as when Linens’n Things went out, a good chunk of those retail sales have simply disappeared. Without those compelling stores, shoppers have chosen to say, “No thanks.”
Some players on the fringe of the middle have prospered. Macy’s certainly is one of them, though you have to credit some of its recent successes to its own making. The TJX group of stores has also picked up share. And then there’s the Internet. Flash sales, Amazon, Overstock: they’ve all gained business.
But it seems inconceivable that not a one of the core stores in the mid-priced tier have been able to take advantage of this situation.
It’s almost as if it’s science fiction.