From classic restaurant chains to iconic fashion retailers, many stores are circling the drain due to changing trends and online destinations like Amazon. Fashion retailers in particular are making last-ditch efforts to lure customers back. But only the strong and adaptable will survive. These 20 fashion retailers are desperately trying to attract customers. Even the creator of Air Jordans faces an uncertain future (page 9).
Biggest blunder: changing its pricing strategy from coupon sales to everyday low prices
JCPenney is going, going, and will likely be gone soon. It closed 14% of its locations (138 stores) by summer 2017, ending in major liquidation sales that drew back some customers. Although the retailer shed excess weight, things haven’t improved. By the third quarter of 2017, JCPenney reported an adjusted net loss per share of $0.33 and $2.81 billion in revenues.
Next: Outdoor apparel saturates the retail market.
2. Eddie Bauer
Biggest blunder: slashing prices to try to stay competitive
The outdoor clothing retailer known for heavy-duty flannels and durable jackets is trying to crawl out of debt. A 2014 attempt to find a buyer — Jos A. Banks nearly bought it — flopped, so Eddie Bauer hired an adviser to slash debt and try again. Sadly, things haven’t improved as the company is “seeking relief from a $225 million term loan due in 2020 and $200 million revolving credit line that comes due in 2019,” according to RetailDive.
Next: No more half-naked models at the mall
3. Abercrombie & Fitch
Biggest blunder: not adapting to loss of mall traffic
Teen retailer Abercrombie & Fitch has struggled to attract customers since 2013. It shuttered 20% of its stores midway through 2017 and announced plans to close more. In an effort to win back customers with a huge rebrand, A&F will depart from its stores’ nightclub-esque atmosphere, according to Business Insider.
A&F’s saving grace may be the Middle East. Demand for the brand continues in the region’s luxury shopping centers. The company opened six retail locations in Dubai, two in Kuwait, and one in Saudi Arabia. It has plans for more in Oman and Bahrain.
Next: Unfortunately for this higher-end retailer, denim is a fashion don’t.
4. True Religion
Biggest blunder: neither affordable nor luxurious (today’s customers avoid this middle ground)
Denim retailer True Religion closed 27 stores and received approval for Chapter 11 bankruptcy in 2017. This will cut its almost $500 million in debt by 70%. FashionUnited explains True Religion’s downfall best: “As consumer habits have shifted more to online, and customers are going for either fast-fashion brands or high-end luxury goods, an expensive denim brand that doesn’t quite meet the luxury marker has a tough time finding a customer.”
But don’t swap your True Religion jeans for Wrangler just yet. The company hopes to bounce back through e-commerce and targeted brand-awareness campaigns.
Next: This high-end department store has low sales.
5. Neiman Marcus
Biggest blunder: not adapting to online competitors
Iconic retailer Neiman Marcus failed its first attempt to sell the company in 2017, and it faces massive debt as a result. Its CEO blames the decline in sales on shoppers becoming “far less loyal,” thanks to internet shopping and price comparisons. To be fair, it’s not the only retailer struggling to keep customers, but closing 10 Last Call stores won’t help attract new buyers moving forward.
Next: This retailer is falling into the debt gap.
Biggest blunder: lack of identity
Shoppers everywhere have turned their backs on Gap, as it hasn’t posted winning sales numbers in years. Many say the company — owner of Gap, Banana Republic, Old Navy, and Athleta — is struggling to define what Gap stands for. By the end of 2019, the retailer will close approximately 200 struggling Gap and Banana Republic stores.
But the retailer’s leaders swear they are far from dead. This is due to Old Navy and Athleta’s success as they’ll add 270 of those stores in the next three years. Regardless, when a company considers successful quarters to be those in which sales numbers remain flat rather than negative, the trouble is still there.
Next: This preppy brand did the exact opposite of what customers wanted.
Biggest blunder: rebranding away from its customers’ needs
J.Crew took a risk that didn’t pay off. An unfortunate rebrand from trendy and affordable to high-end and uninspired left customers confused and uninterested. Add a multitude of C-suite shakeups, including losing the head designer and seasoned CEO, and it’s clear why J.Crew is struggling to stay afloat. The company has about $2.1 billion in debt, with no foreseeable relief in sight.
Next: This retail giant used to be on top of the world.
Biggest blunder: failing to compete with e-commerce sites
Online retailers like Amazon are killing business for many retailers, including this struggling company. According to an August 2017 article in Forbes, Kmart had closed more than 200 stores, with plans to close an additional 150 before the end of 2017. The company, which reported a second-quarter loss of $251 million in sales, had nearly 3,400 stores in 2007. Now it’s focusing on opening smaller stores with specialties in addition to its 1,400 leftover retail locations.
Next: Not even Michael Jordan can save this brand from its troubles.
Biggest blunder: not utilizing athleisure and sneaker trends in a saturated market
Although Nike’s international sales are doing fine (China sales rose 9%), the company’s shares ranked as the worst-performing Dow stock of 2016. Since North America makes up 40% of Nike’s sales, this is not good. Adidas is on the up-and-up as it surpassed Nike’s Jumpman 23 Michael Jordan line to become the second-bestselling sneaker brand this fall. Nike faces a couple major hurdles: a struggling apparel industry, crowded athleisure market, and changing sneaker trends.
Next: This company’s slogan should be “way to struggle.”
Biggest blunder: its formerly confusing savings program of complicated deals and offers
It’s no secret that the big department stores are hit hardest during the retail apocalypse. Macy’s is closing stores and laying off employees as a result of ongoing profit misfortunes. The Wall Street Journal even reported Macy’s fielded an offer from Hudson’s Bay about a takeover.
But Macy’s won’t go down without a fight. It’s plowing forward, luring wayward customers back into stores with a new, simplified loyalty program allowing shoppers to accumulate points and other discounts depending on how much they spend.
Next: Gnarly issues for a surf company
Biggest blunder: its locations in struggling shopping malls
Foot traffic was once an issue for California-based surfwear company Quiksilver, but a turnaround with a new owner and a new name — Boardrider — could help stabilize the business. Boardrider also owns Roxy and DC Shoes. It plans to rebrand these struggling stores to millennials via the hotel and hospitality business.
“It’s a way to showcase our brand and increase the experience we offer our consumers,” Quiksilver President Greg Healy told The Orange County Register. “It’s not only apparel, it also has a food and beverage element and a music element. We want to use it to turn around the business in North America.”
Next: An apparel company losing to competitors
Biggest blunder: not adapting to successful competitors outside shopping malls
To be specific, pretty much all stores owned by Ascena Retail Group are struggling. The company owns Ann Taylor, Loft, Lane Bryant, and Dress Barn — all have seen better days. Of course, competitor success only makes things worse for the fashion retailers as they continue to lose customer loyalty to stores such as T.J.Maxx and Marshalls. The group is scrounging for rent reductions and looking to close stores nationwide after profits shrunk.
Next: It’s been a tough decade for this retailer.
13. Pacific Sunwear
Biggest blunder: lack of originality
Once a staple in every young person’s California-inspired wardrobe, surfwear retailer PacSun is poised to fade away with the tide after filing for bankruptcy protection in late 2016. Some blame its poor performance in recent years on offering styles similar to those from competitors. Store closings are expected, as the chain hasn’t posted profitable sales figures since 2008, according to The Fashion Law.
Next: Paying less hasn’t paid off.
Biggest blunder: failing to adapt to online shoe sites, like Zappos and Amazon
After filing for bankruptcy earlier this year, the budget-friendly shoe-store chain closed 673 stores. Now Payless is searching for a new leader who will help it get creative concerning a strategy for competing with online shoe companies. The Kansas-based retailer faces an uncertain future, to say the least.
Next: Crocs faces declining stock.
Biggest blunder: can’t compete with saturated athleisure market
More shoes, more problems for this shoe retailer famous for its plastic clogs. Crocs announced that it will close roughly 160 stores by the end of 2018. The company will cut operational costs and narrow down its product scope as it restructures. Forbes notes that Crocs is fighting a losing battle against athletic trends.
Next: Charitable company in trouble
16. Toms Shoes
Biggest blunder: not recognizing that social campaigns can only take a company so far
Toms relies on its philanthropic campaigns to drive its marketing efforts. For every shoe purchased, another is donated to a child in need — though some speculate how successful those efforts really are. The fact that Moody’s downgraded Toms’ outlook is proof that even socially driven business strategies can’t withstand today’s harsh retail environment.
Next: This retailer’s stores are on the chopping block.
Biggest blunder: struggling to attract American consumers
Guess closed 60 stores in 2017, which Clark says put nearly $16 million back in the piggy bank. Almost all of the retailer’s problems lie in the U.S. Net revenues increased by 19% in Europe and 17% in Asia, but declined by 13% in America. The company’s CEO hopes the company can focus on its G by Guess and Guess Factory retail concepts that perform well. But it’s unclear whether customers will still be around by the time the retailer figures it out.
Next: A previous red-carpet retailer destined for failure
Biggest blunder: lack of originality in saturated market
Even BCBG, the fashion mainstay that once adorned celebrities such as Kate Winslet, Victoria Beckham, and Alicia Keys, is grasping at straws to remain relevant in today’s fashion world. The company now faces layoffs and store closings. A BCBG spokesman told Bloomberg the retailer would make a sizable shift in selling strategies and focus on e-commerce and branding partnerships to “realign its business to effectively compete in today’s shopping environment.”
Next: Potential issues for a popular jewelry chain
19. Charming Charlie
Biggest blunder: grew too fast and failed to adapt in the process
The budget-friendly jewelry chain is soaring over other pricier competitors now that shoppers are becoming more budget-conscious, but that’s precisely Charming Charlie’s problem. Such rapid expansion following its breakout success has prompted the chain to seek credit help to avoid the growing retail sinkhole.
At one point, founder Charlie Chanaratsopon was placed on Forbes’ Americas Richest Entrepreneurs Under 40 list with a net worth of $425 million. But what goes up must come down, and it seems Charming Charlie is preparing for a big drop sometime soon.
Next: Brides don’t want to shop at malls either.
20. Alfred Angelo
Biggest blunder: leaving brides at the altar
Not one to shy away from bridezillas, all proverbial hell broke loose when Florida-based bridal shop Alfred Angelo unexpectedly shut its doors without making good on its promise to deliver wedding gowns to paying brides. Many were left without their deposits and dresses when the retailer closed up shop and filed for bankruptcy.
But David’s Bridal emerged as the hero, offering a discount to Alfred Angelo brides. However, it’s unclear whether the retailer can make good on its promise as David’s Bridal is also experiencing profit woes, according to Moody’s.
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Additional reporting by Ali Harrison.