Retail desperation

[Holdfast]

I was browsing a designer outlet centre yesterday, looking at various items and talking to salespeople. It was sobering to realise just how panicked these retailers are. A few little signs of just how much trouble they are in:

- I found a parking space within 10 minutes. On a regular Saturday afternoon, it takes 20-30 minutes, let alone a December Saturday.
- there were still a lot of people roaming the shops but very few actually buying anything. Not many people carrying bags and most of the bags were the smaller ones.
- salespeople desperately accosting you, the panic at not selling anything evident on their faces. I was asked if I needed help about 10 times (no exaggeration) within five minutes of walking into one store.
- no lines at checkout in any store apart from Ralph Lauren.
- even the RL line (which was definitely long) was generally filled by people carrying two or three small items
- silly levels of discounting/deals for this stage of the season: brand destruction was evident before my eyes as a result. People chucking around high-end items as if they were worthless rubbish. Only Pringle was holding the line on discounting (I guess cashmere sweaters sell very well in the run-up Christmas, even in these times). Everywhere else, brands were losing cachet in seconds that they'd taken years to build up. Customers were complaining about only 70% or 80% off. Extraordinary.
- as an example, one salesman in Zegna said that they'd be getting trousers in some sizes next week for just £19. That's just ridiculous.


How will these brands ever restore their pricing?
How many high-end makers are going to go to the wall?
What's it like where you are? I hear Saks had its own little firesale in NYC recently, but what about elsewhere?

I've never seen retailers THIS panicked before.

 

[JayJay]

My experiences have been similar. In Indianapolis on Black Friday, I pulled into the mall at Keystone without any traffic delay whatsoever and parked immediately. The next day in Chicago on Michigan Avenue the stores had lots bargains but few shoppers. Last week in Washington DC at the stores in Chevy Chase, again, lots of bargains for this time of year, but not many takers.

I guess I didn't help matters much, either. I bought a pair gloves in Indianapolis, two ties in Chicago, and one tie in DC.

 

[Holdfast]

I've almost stopped shopping myself too. It's certainly infectious.

I do wonder just how many retailers - and makers - are going to survive this freeze.

 

[Tumbleweed]

I read an article a few weeks ago about how retailers (worldwide) are offloading merchandise ahead of seasonal schedule, but project to buy lower inventories next season. This will mean that sales early next year will be brief and not particularly remarkable.

It's all really a bad sign, but don't forget that clothing sells at a very comfortable markup. They'd still be pulling profits from all but the most outrageous bargains.

 

[feynmix]

well, I went to the Crabtree Valley mall here in Raleigh, NC yesterday. Took me about 45 mins to get in, and about 30 mins to get out. The mall was packed, with people carrying both big and small bags.

The horrible traffic outside might just be the way the traffic lights are situated there, but the only way one could tell we were in recession was the huge boards of sale prices at pretty much every store.

 

[LeonM]

I've just returned from Chicago. All the Michigan Avenue shops were having pre-Christmas sales, and the street and shops were packed. Even so with the $:£ exchange rate, it still wasn't worth it.

I bought a scarf from J. Crew, a knit tie, and a fleece cap because I dropped mine somewhere.

Leon

 

[jyook]

I just went into a shop yesterday and ordered a MTM Zegna Milano Cut suit in a dark charcoal Trofeo; 30% off with all custom alterations (such as surgeon cuffs and crotch lining) free... 30% off MTM is something I've never heard off...

The Zegna stores are selling stuff for 40% off inventory right now and will be selling 60% off soon...

Bontonis, Aldens, and Edward Greens were 30 to 40% off...

Bought some chocolate at a Godiva as well... They handed me free blocks of chocolate with my purchase...

 

[JayJay]

The after-Christmas sales should be outstanding. I've planned to make my larger purchases then in hopes of getting great deals. I've already sent a wish list to sales associates so that at the appropriate time they can reserve the items for me, if they're still available.

 

[riveroaks]

don't have to wait until after-Christmas... or for designer stuff... http://www.nytimes.com/2008/12/04/fa...OPPING.html?em

 

[chrome_dout]

Not enough panic here in Toronto yet, our high end retailers are offering a lousy 40-50% on average. Hopefully this will get to a more acceptable 60-70% off soon enough.

 

[ccffm1]

Luckily, things seem to be rather stable and relaxed here in Frankfurt. There is only one retailer I know of that will close its doors at the end of the month. Allegedly this is not related to the crisis. But when I was standing in line in front of the cash desk, sales assistants almost grabbed the stuff from the customers´ hands to make their sign. Obviously they get a percentage at the end of the month.
I´m going to do some outlet shopping when I pick up my girlfriend from the airport next saturday. I don´t expect to find real bargains.

 

[Nataku]

Same goes for here in Minnesota. The annual outlet mall "Midnight Madness" for Black Friday wasn't the same as in past years. Instead of the usual 20-60 year old crowd, I'd say 80% of the shoppers were kids (under 19) in friend-packs looking for junk, such as a a hoodie from PacSun, which is thankfully going out of business. Then again the only store worth going to in this mall was the RL outlet. Otherwise, there was not much actual Christmas shopping being done, from what I could see.


As for the before/after Christmas sales, I wish I were in NYC to take advantage of all these deals!

 

[raphael]

The retail industry has been inflating margins aggressively over the last decade. There's something wrong if a suit goes for $2000 normally/"retail" and then goes on clearance for $600 - a profit is still being made at that $600. Just because the store can't sell every $2000 suit at $600 and make enough to sustain its overall costs doesn't mean the normal everyday price should be $2000.

Consumers have been squeezed and manipulated between corporate techniques like outsourcing, volume discounts, reduction in quality and other manufacturing "efficiencies", supply chain management etc. The backlash was inevitable.

I do feel sorry for the salespeople - they're blameless in this situation.

 

[Cary Grant]

My local haberdasher is booming. But I was in Best Buy today... normally it's 20 minutes to get through the checkout line... today... no line at all.

 

[haganah]

Originally Posted by raphael

The retail industry has been inflating margins aggressively over the last decade. There's something wrong if a suit goes for $2000 normally/"retail" and then goes on clearance for $600 - a profit is still being made at that $600. Just because the store can't sell every $2000 suit at $600 and make enough to sustain its overall costs doesn't mean the normal everyday price should be $2000.

Consumers have been squeezed and manipulated between corporate techniques like outsourcing, volume discounts, reduction in quality and other manufacturing "efficiencies", supply chain management etc. The backlash was inevitable.

I do feel sorry for the salespeople - they're blameless in this situation.

Go wear a burlap sack Mao.