Department Store Demise
Lord and Taylor is going to be WeWork. Henri Bendels closed their doors. Gymboree is bankrupt. Barneys is negotiating for their space on Madison Avenue as their lease is ending so where that ends up is anyone’s guess but the store definitely does not have the same unique selection that it used to. Nordstrom has been smart about changes in retail but they just lost their co-President to cancer. Macy’s is just a mess. Saks on 5th Avenue is always packed but their stores elsewhere seem to lack that luxury experience. Sears is done, Kmart is over and Walmart is making some interesting changes. Who will rise to the top and make tough decisions to change the demise of the department store?
Ed Finkelstein, who ran Macy’s for years, created “The Cellar”. He had a vision that the kitchen was becoming a more integral part of the next generation and took the entire basement of Macy’s in Herald Square and created a new look where kitchenwares sold including food and vendors showing their wares for people to see, taste and try. It was a brilliant move at that time and that moved Macy’s in a new direction. Unfortunately that became stale as everything eventually does and the executives scaled upward, became private and killed the business. Recently Macy’s bought the concept shop Story which is a move in the right direction but how they integrate that into their stores is another thing
There is the brilliance of the concept shops such as Collette who was the leader in this category, RIP. There is now Dover Street Market and Corso Como that are slowly beginning to expand although I would question that the Corso Cuomo in downtown NYC will survive. Bad location choice.
We are seeing the rise of new brands from Parachute to Away to Warby Parker filling some of the empty spaces on the streets and shopping malls. The department store just needs to be smart about how they will operate in the future. There is massive real estate in those malls, there is a shortage of housing, people want to interact with each other, many still want to have an experience when shopping, Amazon might be growing but they have become a utility and are also opening stores. Where are the flower making classes? The cocktail making events? The family events? More pop-ups? Concerts? Book readings? Art installations?
We will look back to this time and be able to point to the store that pulled out of the box and went down a new path. Finkelstein did it decades ago and everyone followed suit. Nobody should follow suit. Every store needs to be creating their own concepts and take all of us as consumers into a new direction.