Justine Griffin/The Tampa Bay Times – The retail industry had a tough year in 2016.
Sports Authority went bankrupt and closed all its stores. Teen apparel retailers Aéropostale, Pacific Sunwear and American Apparel filed for bankruptcy protection, too. Macy’s said it would close 100 of its 675 department stores nationwide. More than 30 Sears and Kmart stores will close next year, many of them in Florida. Even Walmart announced it would close 150 stores in the U.S. this year.
The Limited, a line of women’s fashion stores found in traditional malls across the country, is the latest to be on the verge of bankruptcy. The Limited stores in Westshore Plaza, Westfield Brandon and the Tampa Premium Outlets will likely shutter for good within a week. The company is expected to file for bankruptcy and begin to liquidate its stores soon.
This is a trend we’ve seen before. Plenty of retailers went out of business last year and the year before, but a new wave of fresh retail companies are lining up to take over the spaces of those that sputtered out before them.
Most of the companies that closed last year, like well known women’s fashion names Cache and Wet Seal, were big with mall shoppers in the ’90s and early 2000s. But they and other mall tenants have struggled to remain relevant against the likes of new names, like H&M, Zara and Charming Charlie, which offer clothing and jewelry at low prices and can update their inventory more quickly to keep up with emerging trends. These new stores’ assortment changes almost as fast as what’s trending on social media. And these new companies are running circles around department stores and other well-established retailers when it comes to knowing what millennials and Generation Zers want to buy and how.
“This is the most competitive sector in retail,” said Faith Hope Consolo, chairman of the retail group with Douglas Elliman Real Estate in New York City. “Every brand has its day and to stay relevant and current is the key. A lot of these brands have been dying a slow death. Fashion is fickle.”
Sports Authority was perhaps the most high profile store to go under this year. But where Sports Authority failed, Dick’s Sporting Goods, Bass Pro Shops and a newcomer to Florida, Academy Sports & Outdoors, are getting bigger. Some brands had to narrow their focus. Earlier this year Nike announced it would stop making golf equipment because of a lack of interest in the sport from younger consumers. Meanwhile the sporting segment continues to splinter as boutique stores like Fabletics, Athleta and lululemon continue to benefit from the yoga pants craze.
We can’t talk about retail without mentioning online sales, which continues to carve out a bigger piece of the pie, slowly but surely. Amazon officials said they had the best holiday season this year, shipping more than 1 billion items worldwide this month. Amazon also sold millions of its own line of devices this holiday season, like the Amazon Echo and Kindle Fire.
Target reported it had its “biggest day ever” on Thanksgiving with record-breaking online sales. Walmart reported 70 percent of its online sales from Black Friday came from mobile devices. But brick and mortar stores are still trying to tweak their online shopping and shipping model, which isn’t as seamless as it is with Amazon and other online retailers.
“Amazon is the easiest. It just shows you how far ahead Amazon is from the others. Brick and mortar retailers don’t have the distribution model down yet,” said Jeff Green, a retail analyst in Phoenix. “It’s a great idea, to ship items to stores and have customers pick them up, but why would you still buy online to still have to go to the store? They have a long way to go.”
The National Retail Federation was predicting a 4 percent increase in retail sales for the holiday season, but Green thinks sales will fall short of that. Sales barely rose in November, just 0.1 percent. Overall, sales were up 3.8 percent from a year ago, according to data released Dec. 14 from the U.S. Commerce Department.
“I thought the holiday season was going to be down. It’s actually going to be up, but not the 4 percent everyone is expecting,” Green said. “It’s confusing because the greater the percentage of online shopping, the harder it is to visually assess how Christmas is going. The malls weren’t busy, though. It took no time to get a parking space.”