Glut Plagues Department Stores

[tomturbomatic]

WSJ article telling us there are too many outlets per store brand.

The number of stores that major retailers need to close to achieve 2006 sales per square foot:

J.C. Penny: 320 or 31% of existing stores

Sears: 300 or 43%

Macy's: 70 or 9%

Bon-Ton: 40 or 15%

Nordstrom 30 or 25%

The full story should be at the link.

There are many factors to consider when considering closing a major store which may be an anchor for a mall. It might kill the whole mall.[this post was last edited: 4/25/2016-12:41]

MSN

 

[turquoisedude]

Wow... that's pretty harsh.   And you make a good point about the effect of closing an anchor store in a mall, Tom.   Just this past weekend, we passed by a mall in upstate New York that was dead as a doornail with a honking big empty store with the faded Ward's logo on it... 

 

[tomturbomatic]

They paved paradise and put up a parking lot. The horrible thing about these abandoned places is all of that asphalt covering the earth contributing to more runoff problems instead of allowing the water to soak into the ground.

 

[warmsecondrinse]

As with anything, there're push factors as well as pull factors for people moving from live shopping to on-line. Does anyone know of a study that focuses on the stores and not the lure of shopping au naturel?

 

My push factors in order of priority are:

1. An insufficient number of cashiers.

2. An insufficient number of cashiers.

3. An insufficient number of cashiers.

4. An insufficient number of sales clerks on the floor to both take care of customers and keep shelves neat and orderly.

4. The reduction of aisle width between shelves. This makes every   aspect of shopping take more time and energy than it should.

5. Shelves and racks seem to vacillate between empty and far too crowded.

 

Jim

 

[tolivac]

Another thing to throw in the mix--the failing economy!The middle class is SHRINKING.The stores in Toms list were middle class shopping places!

 

[tolivac]

Abandoned places-the horrors of this are EPA and some other agencies-state and Federal.They make it MORE difficult to demolish these places permits are more expensive,the sites have to be cleaned of asbestos and lead paint or other toxins.And there are FEWER rubble fills to place the stuff.So the places are left to rot causing OTHER hazards-the runoff,pollution from the unmaintained sites,hazards of power still left on,and the buildings are used as squatter places,sites for drug,gang, activity,and so on.But the Urbin exploeres love them.

 

[vacerator]

Middle class?

What middle class? Some have moved up, but most down the ladder.
Yes, Sears was one place where America shopped.
Remember, history repeats itself.
In France in the 1700's, someone said let them eat cake. Then they chopped off her head.
The same happened to the Romanoff's.

 

[tomturbomatic]

The rich and powerful never learn that greed ends badly.

 

[warmsecondrinse]

Middle Class

Most middle-class people I know are working more than 40 hours per week. Logic dictates that the less a person/family has fallen, the more overtime is worked. If all the facts and figures were equated to a 40 hour work week, I bet a much higher % of the middle class would be falling. 

 

You know the proverbial 1%? Flip it around to percentiles so they're the 99th. I wouldn't be surprised if most of the 70th - 85th percentile were falling as well.   

 

Back to topic:

 

More time at work = less time for everything else so people/families have to prioritize. Imagine a parent with a toddler who's just old enough to play independently and entertain himself as long as Daddy/Mommy is RIGHT THERE. No parent in his right mind would pick up the toddler and go to a store when he could pick up his tablet and do 3/4 of his shopping while his kid is playing.

 

The deluge of cheap imports from China simply encourages this. IMO, they've hit the bull's eye in terms of bang-for-the-buck. My experience is that the products are generally 3/4 as good for 1/4 the price. I think it's unreasonable to ask a person to ignore that when he's faced with expenses climbing faster than his paycheck.

 

I'm probably projecting and obsessing, but I think there's a bit of straw-that-breaks-the-camel's-back going on in stores. Imagine spending an hour in a store to do shopping that used to take half that. He's annoyed, but shrugs says, "That's life", and makes his way to the registers. He's greeted with 8 registers, FOUR cashiers, and line like you find outside an Apple store on release day. How motivated do you think he is to come back?

 

Venting done,

 

Jim     

 

 

 

[tomturbomatic]

Add to that the factor that I have mentioned before: since the Great Recession, as incomes have fallen, stores have cut back on what they are stocking. Brand name products are being replaced by generic store brands and certain products are no longer stocked. Why chase from store to store looking for something when you can find it online and, often, can escape shipping charges? I am grateful I can still afford the foods I am accustomed to buying, but I can see in the stores that many cannot and this is an area with a lot of stable employers, well, if you don't count congress, but a lot of businesses took huge hits when peole lost jobs and houses. Of course, those who lost jobs and houses took huge hits themselves.

It is a damn shame that corporations can move jobs overseas and then expect people to buy things that no one in America got paid for making. Henry Ford, as awful an SOB as he was, knew that if you paid your workers a decent wage, they could afford to buy what they made.

 

[vacerator]

Jim, and turbomatic,

True all that is as well, and I agree.

 

[launderess]

Don't wholly buy the declining income argument. People still have access to credit and make use of it. Go into any Best Buy especially around the holidays and look at the long lines. Go into many homes including the so called "working poor" and you'll find plenty of up to date electronics, clothing, and so forth.

Retail sales in the USA actually is doing very well: http://www.tradingeconomics.com/united-states/retail-sales-annual

What is dying/having a hard time are brick and mortar. The rise of Internet and online shopping is killing physical locations. Years ago people canned the idea shoppers would go online in great numbers. Feeling was consumers would want to see and feel merchandise as they had shopped mostly for ages since the invention of the department store. Turns out that was incorrect and becomes more so as each younger generation takes to online shopping.

It is important to remember how department stores came about in the first place. If you've seen Selfridges on PBS you know the story.

Marshall Fields, Macy's, Galeries Lafayette, Nordstrom, and the rest all came out of the same idea; give (mostly) women from the new and growing middle (and even lower) classes places to spend their husband's money. In the process these stores became destinations where ladies could "shop". That is gave them a legitimate and socially approved reason to get out of the house.

Late as the 1970's women like my Mother still got dressed up to go "in to town", down town, or whatever you want to call it when going shopping at a department store. She like other mothers could bring the kids who would find some sort of amusements provided (retailers weren't dumb....) while she shopped. Then maybe there would be luncheon or a snack, then you headed back home.

What department stores did was consolidate the various and many shops that sold various merchandise under one roof. No longer did you have to visit various tradesmen, or they have to come to you. Now everything could be found under one roof.

This whole model worked long as you had large numbers of women who remained at home or otherwise unemployed. That began to change in the 1970's and continues today. Aside from the small "Ladies Who Lunch" set most females are not only working full time, but have a family and other obligations. They just don't have hours free to loll around department stores "shopping". Here is where the beauty of online shopping comes in....

 

[lordkenmore]

>They just don't have hours free to loll around department stores "shopping". Here is where the beauty of online shopping comes in....

Also this is the beauty of buying through catalogs, as many did before Internet shopping.

Years back, in fact, I knew a woman who had had fairly high level, demanding jobs. She commented that during that part of her life, her shopping was entirely by catalog. She didn't have the time to go to the mall for a leisurely afternoon of browsing. She also mentioned that her mother had tried to sell her on Dryel (IIRC). So convenient to use at home. Apparently, it was a "no sale." The woman whom I knew said that due to time and energy it was much more appealing just dumping everything on a real dry cleaner...

 

[vacerator]

Laundress,

true, but back in the day, good use of credit meant paying off the balance every 30 days so we didn't accrue interest debt.
That's just negative cash flow.
I'd save up and pay it off in one billing cycle. Hard to do these days, and young people don't seem to care. They declare bankruptcy at age 30 and in a few months have a new credit card.

 

[launderess]

Bad credit habits aren't just for the young

Witness just prior to recent fiscal and credit collapse scores of persons testified before Congress about how they were being abused by the big bad ole credit card companies.

While it was true there was some bad things going on, it was equally true many consumers either didn't do their homework and or simply played Scarlett O'Hara: I won't think about it today, I'll think about it tomorrow...

Truth to tell since the 1970's or 1980's use of credit including carrying balances has lead to many Americans being able to afford lifestyles they otherwise couldn't. We saw this during the fiscal collapse and credit became hard to get for a good number of persons. You are still seeing it as banks and finance companies adjust to the new rules of the land.

Yes, back in the day you still had a good number of consumers with the Great Depression mindset (avoid credit), but there were many others who had an itch that needed scratching, and Visa or MasterCard took care of things.

 

[supersuds]

Perhaps wandering far afield, but to Launderess's point about credit, most states used to have usury laws that prevented charging more than a certain amount of interest a year, often 10%. In 1978 the Supreme Court ruled that these state laws did not apply to national banks, and suddenly everybody had a credit card.

I can't count the number of people I've known who've gotten into difficulties because they had the mindset that all they had to do is make the minimum payment each month. Eventually the power of compound interest asserts itself, with the force of the Titanic hitting the iceberg.

 

[angus]

I agree that most people work such long hours there really isn't a lot of time to shop. Also, let;s not forget the "homogenization" of the American department stores. Starting in the 80's many of the great stores that were owned by one of the big three companies (Allied Stores, Federated Department Stores and Associated Dry Goods) became the victims of centralized buying and other back office operations, etc... thus reducing the individual regional appeal of say... Goldwater's in Phoenix vs. Robinson's in LA vs. Lord & Taylor, or Hahne's or the Denver Dry Goods Company. Then Associated Dry Goods which was once the premier "white glove" retailer was acquired by the May Company who did nothing more than turn those great stores into unremarkable mid line department stores, continuing the consolidation of regional name plates, closing all "downtown stores" etc...

Then the whole Robert Campeau mess buying both Allied and Federated then quickly driving everything into bankruptcy (resulting in Federated selling it's two most profitable divisions, Filene's (Boston/New England) and Foley's (Texas) to May Company. The upshot of the whole business now is that Federated reorganized, bought May Company and eliminated every original department store name except for Bloomingdale's and Macy's. So, no more Burdines, Abraham & Straus, Marshall Field, Bullocks, I. Magnin, Rich's, Goldsmith's, etc..

So with all this the bottom line is that all the remaining stores carry the same dull expensive merchandise - outside of Neiman Marcus, Bergdorf Goodman and a few specialty stores (still expensive but at least different merchandise). So one can shop on line and avoid the whole mess altogether. Shopping is no longer a destination activity but a "chore" to get done as quickly as possible.

 

[wayupnorth]

The nearest Bon Ton is 2 1/2 hours away in So Portland ME but they somehow got my address as a Mrs and send tons of mailers with samples of fragrance crap. They keep my wastebaskets smelling wonderful for a week. Then they all want me to open a credit card but screw them. I use my Discover for everything, get cash back, credit score and more for free. Pay it off every month and you are a more than privileged customer. Except that Rachael or the latest Carmine still after 4 years persist in calling me up to 4 times a day with my 3rd and final offer to lower my rate just to give my info to someone in India to hack me. Do not call list is a joke.[this post was last edited: 4/26/2016-22:49]

 

[tomturbomatic]

Another part of the homogenization of the marketplace is the same stores in every mall and town in America. Those of you who know about these things, please tell me how to find what we used to find in the Notions Department of department stores. Thank you in advance.