How can the Brick and Motar Retail Apparel Industry Adjust for the Future? Can it?



Emanuel Chirico, CEO and Chairman of Phillips Van Huesen


How do you right that ship with a few quick moves?

You can get fired, close stores, cut costs and increase your Internet presence.

It’s not so easy to close stores because of existing leases. Cutting costs, such as lowering or reducing commissions has its risks due to the likelihood of losing good sales people to competitors.

While these statistics include non-apparel retailers like Best Buy, retail researcher ShopperTrak reported that “Black Friday” brick and mortar retail sales were down more that $ one billion from 2015 ($11.6 billion) to 2014 ($104 billion).


Meanwhile online sales jumped 14% from 2014 bringing in $2.72 billion.

Basically the baby-boomers are no longer in need of a lot of new clothes and the millenniums are dressing differently and buying on-line. People want what they want when they want it and don’t have time to drive to a mall.

Another problem is that stores like Ralph Lauren, Coach and Michael Kors are competing against themselves by opening too many outlet malls.

Ashley Lutz wrote in Business Insider that: “consumers will not pay $ 300 for a Coach or Michael Kors bag in a department store when they can get one at an outlet mall for half the price.”


Here are some statistics on how many retail apparel stores will be closing according to aboutmoney, updated November 2, 2015.

Abercrombie & Fitch: 180

American Eagle Outfitters: 150

Aeropostale: 75 already / 175 over next several years

Fredericks of Holywood: 93 already

Gap / Gap Kids: 140 (2015) / 35 (2016)

JC Penney: 40

Macy’s: 16

On November 11, 2015, Macy’s, who owns Bloomingdales, announced comparable sales fell 3.9% last quarter for their third consecutive drop.


But if Macy’s gets in real trouble, Phil Wahba wrote in Fortune on November 11, 2015 that “Macy’s Manhattan store could be worth $ 5 billion on its own.”

The distinguished store Brooks Brothers, the oldest clothier in the U.S., with approximately 120 stores in the U.S., is a privately held company owned by Claudio Del Vecchio. Thus there has been no reporting of their results. But they did just open new stores in Palm Beach Gardens and Puerto Rico. Another new store is set to open in Tampa.


Claudio Del Vecchio / Brooks Brothers

The Motley Fool recently reported that Jos. A. Bank, owned by Men’s Warehouse, had an 8.1% sales decline.

Shares of the upscale department store Nordstrom plummeted 15% on August 14, their worst decline since 2000. The dramatic slide began after Nordstrom “warned its sales deteriorated late in the summer and things are looking dicey for the holiday season.”   (Source: CNN Money)

On August 16, 2014 Nordstrom shut down its only central Florida store for good.


The Wall Street Journal reported on January 7, 2015 that Phillips Van Huesen, owner of IZOD closed its entire retail division, consisting of 120 stores.




On August 27, 2015 J. Crew released its second quarter reporting a sales decrease of 10% to $506 million compared to $561 million in sales in the same time period in 2014. According to Erika Adams of, “J. Crew is quietly closing down stores but not disclosing specific locations. On April 12, 2015 the J. Crew store in the Woodfield Mall in Schaumburg, Illinois shut down abruptly without any prior warning.”

Gap’s first quarter 2015 sales were down 10% from last year. It is closing 175 stores, leaving 800 open. But 250 employees will be laid off and the restructuring will cost about $ 150 million.

On October 5, 2015 American Apparel filed for Chapter 11 Bankruptcy after having lost $ 340 million over the last five years and $ 45 million this year. It has already closed 239 stores and let go 10,000 workers.

According to Fashion United “Americans continue to spend a smaller percentage of their household income to buy more clothes.”


Dead Mall

A Dead U.S Mall

Then there is the problem of the malls. Michael F. McElroy wrote in The New York Times on January 3, 2015 “that since 2010 more that two dozen enclosed malls have been closed and an additional 60 are on the brink.”

Green Street Advisors estimates that 15% of U.S. malls will be converted to non-retail space in the next ten years.

 On a brighter side, in a Wall Street Journal reported on April 5, 2015 that Toronto based the Hudson Bay Company, owner of Saks Fifth Avenue and Lord and Taylor “posted fourth quarter growth of 3.2% helped in part by a big jump in digital sales and stronger same-store sales.” There was a 12.1 % jump in its discount Off5th stores. Digital sales spiked 35%.

On an even brighter side, according to an article in the Boston Globe on March 11, 2015, L.L. Bean plans to triple its stores from 100 locations by 2020.


And Ann Taylor and Eddie Bauer are only closing one store.

As an aside, in the United Kingdom, where the British don’t celebrate Thanksgiving but have enthusiastically embraced Black Friday, Parliament member Jeremy Corbyn, “who is now opposition Labour leader, put forward a non-binding motion in the House of Commons last January railing against large retailers who chose to adopt ‘the American retail custom of Black Friday’ saying it was an affront to public order and a drain on police resources.” (Source: New York Times / Dan Bilefsky / 12/27/2015)


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