Nobody ever said the retail business made a whole lot of sense but more recently, there are several downright confounding situations that mostly defy logic and common sense. Spoiler alert: I don’t necessarily have any explanations, much less solutions for these things but just sharing my informed confusion, hoping somebody else can offer up some responses. Confidence is not high.
1. Gap and Abercrombie & Fitch are doing great right now. The former has been though I-don’t-know-how-many-resets, some of which have caused momentary blips in what otherwise has been a slow but steady dismal decline. Let’s see how this one goes down as things progress. As for A&F, if there’s any retailer that had been counted out for dead, it was them, a victim of mismanagement, time-warp strategies and an aging-out demographic. But they’ve come back and come back strong and been doing for some time. Good for them.
2. What’s the matter with Nike? The poster-child for footwear and athletic apparel, it has been one of the strongest brands in consumer products. But it seems to have fallen off a cliff, partially due to an ill-advised direct-to-consumer strategy but frankly that wasn’t such a terrible idea given the retail landscape. There’s more here than meets the eye. How does the CEO keep his job?
3. Macy’s Just Says No. After fighting off a takeover from big bad private equity invaders, Macy’s management just said, no thanks, we’re not interested. Who knew this was an option for companies under siege? Have you ever seen this work before? I haven’t.
4. Kohl’s keeps crashing. They’ve added Sephora, they’ve added Babies’R’Us, they’ve added Amazon returns. But still their same store sales continue to drop, which means their core business must be really tanking. This can’t go on forever.
5. Dollar stores aren’t gaining market share in bad times. Not sure I’ve ever seen them do so poorly when consumers were feeling pressed by higher prices and inflation. They usually gain some pretty strong business. Not this time. It’s hard to explain.
Anybody have any theories on all of this? Open for suggestions.
WarrensReport 