More Legacy Retail Woes

Legacy retailing (aka brick-and-mortar stores) continues to have difficulty meeting the challenges of online shopping.

The Limited--one of the original mall-based women's specialty chains--has just closed its 250 stores from coast to coast and will sell online only. Founded more than 50 years ago, the Limited at one time had hundreds of mall stores and was hugely popular, but that was before the Internet. The retailer's private equity owner said in a statement: "In an increasingly challenging environment for mall-based retail and women's apparel, we are very disappointed that the company has had to make the difficult decision to close its retail locations."

Sears also made an announcement this week: It's selling the well-known Craftsman brand to competitor Stanley Black & Decker. Sears was one of the pioneers of catalog shopping in the 19th century, and Craftsman is one of the three brand jewels in its crown (along with Kenmore and Diehard). Selling a crown jewel to raise money will likely only postpone the inevitable. Sears has been trying for years to strategize its way out of an expensive legacy retailing situation. Sears is closing yet more stores, having already agreed to rent parts of open stores to other retailers (like Primark). 

Macy's announced that it's laying off 10,000 workers and closing 100 stores after a worse-than-anticipated holiday season. The company stated that the stores being closed were "unproductive or are no longer robust shopping destinations because of changes in the local retail shopping landscape."

What is the future of legacy retailing in a world where consumer behavior is evolving along with technology? More posts on that topic soon.

Can Sears Survive?

A recent Crain's Chicago Business headline is a stark reminder that no marketing success lasts forever. "Sears -- Where America Shopped" uses the past tense because so many people have turned to other stores and online retailers rather than buying from Sears or Kmart or their sites.

Sears catalogs were once direct-mail powerhouses, reaching into millions of U.S. households with much-needed merchandise variety and reasonable prices. Sears was a proven anchor in shopping centers coast to coast, and its credit card was in wallets all over America. Those glory days are gone.

In an effort to cut costs, Sears has begun closing dozens of "underperforming" stores, leaving places like Anderson, Indiana and Jackson, Mississippi after decades in business. This is understandable, given the difficulty of turning these stores around while the economy isn't yet strong AND the intense competition from discounters and specialty stores with profit-sapping price wars on some popular items.

Now Sears is trying to license the core brands for which it is so well known: Craftsman, DieHard, and Kenmore. If this happens, it's likely that the essence of those brands will be diluted. Will consumers still know what the brands stand for? Will they believe that licensed products have the same quality as the original brands? Will the brands keep a quality halo over Sears itself once they begin appearing on non-Sears products?

To raise money, Sears is also said to be trying to sell its Lands' End unit, which might mean the end of Lands' End boutiques inside Sears stores. Meanwhile, a new Scrubology boutique (above) is gaining ground within Sears stores. Will it help Sears attract a new generation of shoppers--before the retailer has to close hundreds more stores?