There is so much in the news and everywhere else about store closings, bankruptcies, reasons why, and I am still a bit confused. I get the main reason why it’s happening, what I don’t get is how did so many of these stores let this happen.
Charming Charlie is closing all the remaining stores it has left. It started as a unique concept of how the merchandise was displayed. Costume jewelry, scarves, handbags, and accessories were displayed in groups according to color. Green, Turquoise, Red, Yellow, you get the idea. This worked for a while and then trouble reared its ugly head.
The pending demise of Charming Charlie is a virtual checklist of everything that can go wrong in retail these days. Before its first Chapter 11, the retailer grew its brick-and-mortar footprint too quickly, built out an over-broad vendor base and ran into broad structural changes in the industry, as customers turned away from malls and other physical retail outlets.
To save money, Charming Charlie hacked away at its workforce, sometimes leaving just one associate to run a store for hours at a time, Bellon said. That hurt the retailer’s ability to convert traffic into sales and also led to poaching of its remaining employees.
To help with liquidity, the company “hastily” expanded its inventory to boost the money available under its asset-backed loan. But that created piles of “merchandise that was either off-brand or not of the quality their customers had come to expect,” Bellon said.
After filing for Chapter 11 in December 2017, the company got rid of 100 underperforming stores. The company, Bellon, (vice president) noted, was still left with numerous underperforming stores at the insistence of landlords when negotiating for concessions elsewhere in their portfolio.
Well, I had to check this place out, when one opened up across the street from my office. OK, I walk in and it looked like a rainbow had exploded in a confined space. It was so busy it made your head spin. 27 different colors, and in each color was jewelry of every kind, necklaces, rings, bracelets. etc, with scarves, handbags, wallets, glass cases, sunglasses, readers, notebooks, pens, and a bunch of other useless stuff. These were not quality items. There were women who really loved this place, to each his own, and found Charlie very Charming.
After exiting bankruptcy, the retailer was “saddled with undesirable merchandise, unfavorable trade terms, and an undercapitalized balance sheet,” according to Bellon. It also had to contend with tariffs, severe weather events (which Bellon said cost them $1.1 million in sales), and customers with smaller tax refunds. Charming Charlie was saddled with undesirable merchandise when it opened.
I have read so many reasons about why there was a store failure but tax refunds? and weather events?
There are different reasons why retail stores declare bankruptcy, and they do differ from one retail store to another but the basic problems they all had are the same. High rent, did not recognize they needed user-friendly well developed online sights for sales, did not pay any attention to what the customer wanted and not recognizing styles change, getting caught in a time warp, if you will. They totally failed to understand customers were going to shop where they could get the most for their money and that customer loyalty does not exist today and hasn’t for years now, and a total lack of imagination with their merchandise displays, either they are outdated, or just stacks and stacks of sale items, or just reduced items, (what’s the difference), and so much of the same thing over and over. Customer service has also gone out the window. I actually witnessed in a very high-end designer clothing store, salespeople gather and talk to each other while a gentleman looking at suits was left on his own and no one ever approached him and there was no way the salespeople did not see him. They continued to engage chatting to each other. The gentleman never said a word, he simply walked out of the store after waiting a decent 20 minutes.
I know we all have said going into a store, I wish the salespeople would just let me shop, and I will let them know if I need something. Well, you don’t need to worry about that today. You will be left entirely alone and if by chance you need something, the salespeople look at you as if you are bothering them, if you can find someone that is.
I hear Amazon mentioned so many times as the reason brick and mortar is sinking. I participated in the prime day sales on the 15th and 16th, and today is the 20, I received all my items on the 18th and 19th, was notified within 18 hours a package had been damaged and upon its return to Amazon my account would be credited and to please let them know if this is not done in 2 to 3 business days. It all happened within 36 hours. It is also easy to speak to Amazon and they will find a way to solve your problem or just to answer a question you might have, and I waited a whole 15 seconds for someone to come on the line. This time I did call about the damaged package and was given a generous credit toward the next item I purchased. There is more customer service from online sellers than at the brick and mortar stores. Don’t get me wrong, one of my talents is shopping and I loved to go with my children, my friends, I was first in line to go shopping and do lunch, so I am old enough to remember how much fun it was. The fashion shows,( modeled in some of them) and meeting designers who came to the store to visit with customers, just a lot of fun. So it is clear to me what is happening to brick and mortar. Most of it is the fault of the retail store. Some things are out of their control, for sure, but for the things they could do something about, they did nothing, and that is what I do not understand.
This, of course, begs the question, who is minding the store?
Thank you Retail Dive and JCK Magazine
Go out there and stay safe and have fun. next, the politicians running for office have ads on FB, tired of robot calls. Sign this petition and I can end this, another gimmick, as soon as you sign, would you like to give a donation to speed up the process. In this case, some things never change.