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Exploring the future of retail

Brandless Shuts Down: A Victim Of Outsized Expectations

News reports today indicate that Brandless, the SoftBank Vision Fund backed start-up, will shut down permanently. This news follows a tumultuous few years for the once promising start-up that offered high quality, “brandless” goods for a single fixed price point of $3.

Brandless was an e-commerce based company that I first wrote about a year or so ago when they opened (surprise!) a pop up store on Melrose Avenue in Los Angeles. At the time I commented that the store was an effective way to introduce consumers to this remarkable new brand, one that promised an extensive line of high quality products (with attributes such as organic, vegan, FSC, gluten free…) at remarkably low prices. The company even calculated the “brand tax” that consumers would have paid for the branded option.

The company received a reported $300 million in VC backed funding but that wasn’t enough to help them pivot to a profitable business model. A few observations:

  • Some business models are too good to be true. There was little wrong with Brandless from a consumer standpoint but the low price points and high cost of customer acquisition created a puzzling (and money losing operation).
  • Like most D2C brands, there was the recognition that brand awareness and customer acquisition is difficult to achieve. The pop-up store was wonderful, but not nearly enough. The company, just months ago, indicated that they might open Flagship stores and make deals with retailers to place product in their stores. While this was announced, I did not see it executed.
  • Price points are clearly an issue. It is difficult to profitably sell a product for $3 online. The company abandoned the $3 price point, added products at $6 and $9 and recently featured a wide variety of price points including CBD products at $60+. Their goal was to raise the average order size, but this likely occurred too late.

Undoubtedly, there will be value in the Brandless name, customer list and products they developed. As a standalone company, it appears that this might be the end of a very short three year run. It’s likely there will be a second life for Brandless in the future. For SoftBank, which has gained notoriety for funding high fliers (and crashers) like WeWork, this is another blemish on their record. Pouring money into a flawed business model is almost never the answer.


Lucky’s, Earth Fare And The Perils Of Overexpansion

The grocery retail world has been rocked these past few weeks with the perils of overexpansion and the subsequent closures of some prominent chains that, just a few years prior, were seen as rising stars and potential national chains.

Earth Fare just announced that they have started a going out of business sale and will liquidate over 50 stores as part of their bankruptcy filing. The company stated that it will do so while looking for other buyers for their assets. Earth Fare is a private equity owned natural and organics retailer that was competing in the Southeast and Midwest of the U.S.

In a similar fashion, Lucky’s Market announced the closure of 32 of 39 of its locations. Competing in a similar space as Earth Fare, they focused on natural and organic products with chef inspired prepared foods. This Boulder based company had 17 stores when Kroger made an investment in them back in 2016 and had proceeded to expand rapidly across the country. Many of these stores will be acquired by Aldi and Publix while the founders will reclaim 7 of the locations.

For good measure, Fairway Markets, the once formidable New York City food retailer, filed for Chapter 11 again recently. There are plans to save many of the New York City locations but there will likely be additional closures in some of the suburban outposts.

So, what does it all mean?

  • The natural and organics space remains strong and “healthy”. The market is growing and the future consumer is embracing a wellness lifestyle and is more concerned about the types of food they are consuming. The failure is not based on a lack of market demand.
  • There is a lot more competition today. Besides the established natural and organics players like Sprouts, Whole Foods and Trader Joe’s, traditional competitors like Kroger, Albertsons and Walmart have become a whole lot better as well. There are more competitors competing.
  • The real culprit here seems to be undisciplined expansion. In the end, these companies were not differentiated enough to merit rapid, out of market expansion. While the core of these chains were profitable, growing fast and in diverse markets didn’t work.

There is a real reason for local chains to remain local. The number of companies in the food retail space who have become national players is few and far between. And it is likely to remain that way into the foreseeable future.


Where Retail Is Headed: What Can We Expect In The Roaring 20’s?

Greg Foran, the former CEO of Walmart U.S. said that “Retail Will Change More in the Next Five Years Than It Has in the Past 50 Years”. If he is even remotely correct, expect to see a rapidly shifting retail landscape as we enter a new decade on top of what has been a tumultuous prior ten years.

As the Holiday season of 2019 winds to an end, I am going to use this time to look back and to look ahead. The 2010’s were a transformative decade for retail. While Retailmageddon didn’t exactly come to pass, we saw a significant slowdown in physical brick and mortar retail growth and an unprecedented number of retail store closures.

In our decade recap blog, we spoke of five key trends that shaped the decade: 1. A full decade of unimpeded retail sales growth. 2. The rise of e-commerce and 3. The collapse of the middle and the rise of value driven retail. 4. Private equity’s outsized role on retail economics. 5. The power and influence of the consumer through social media and connectedness.

I asked our team to weigh in on what they thought the next ten years will look like. So here goes:

  1. Extreme retailing will define winners and losers. We have defined extreme retailing as the following:
    • Extreme Value. Retailers who deliver outstanding value to the customer will continue to gain share. Value can be defined as low prices (of course), accomplished through private label and augmented by a treasure hunt experience.
    • Extreme Convenience. Retailers who remove pain points from the customer looking for and ultimately buying and using products.
    • Extreme Experience. Retailers who energize the experience through great displays, provide reasons for customers to show up, change often and amplify product categories.
    • Extreme Engagement. Retailers who establish direct relationships with their consumers and encourage the ability to customize and personalize products, promotions and the overall experience.

Walmart has been investing in online grocery delivery by expanding grocery pickup and delivery services to make Walmart the easiest place for value-driven customers to shop.

I can argue that the trends below will simply become more efficient ways to accomplish the above.

  1. Technology will lead the way. Having just left the NRF Big Show, it is abundantly clear that the implementation of technology will alter the retail landscape, both in the ways that we will do business and the tools available for the consumer:
    • AI is transforming the way retailers do business. Everything from assorting, pricing, displaying (in-store and on-line), replenishing is being changed by AI. It will also begin to more aggressively enter the consumer realm through anticipating and responding to consumer needs.
    • A gimmick today, applications like Siri and Alexa are gaining usefulness and will be embedded everywhere we live, work and play. This is going to impact shopping in the same way we have seen mobile devices transform the retail experience.
    • The end of the front end. It is not difficult to look ahead over the next decade and predict the end of human interactions at the beginning and end of the consumer experience. Automated ordering and automated checkouts will rule the day as technology, consumer preference and very real labor shortage issues will drive adoption of these technologies. The mobile phone and social shopping will likely become the new front end.
    • Robots and drones…maybe. Robotics will change distribution centers, fulfillment and automate certain retail tasks like inventory management and maintenance. However, I have not seen practical examples of how they will transform the front end of the consumer experience….yet.

      Amazon Go relies on technology and smartphones to link customers to their Amazon account, streamlining the customer experience.

  1. The battle for the Last Mile. The costs and inefficiencies of package delivery (and returns) to the home is already catching up to retailers who attempt to match Amazon’s deep pocketed and money losing approach. While consumer expectations for increasingly faster and still free won’t change, retailers must change their approach.
    • Access to consumer’s home. Along with smart technology, access to consumer’s homes, garages or dedicated “home lockers” will accelerate.
    • Consolidated lockers and pick-up points. Stores will reconfigure themselves as efficient and potentially consolidated pick-up points to reduce costs of the last mile.
    • BOPIS done well. Buy on-line and pick-up in store (or through a drive-thru) has real potential to both lower retailer costs and make it easier for the consumer. Largely, it is not being done well today. That will change.
    • Amazon goes full retail. Why? It is the only way for them to continue to efficiently grow and gain access to large categories like food. Retail might look quite different, with a lot less traditional space for inventory and much more space dedicated to omni activities (see above).
  2. Greentailing becomes mainstream…really, finally. I wrote Greentailing and Other Revolutions in Retail in 2008. At the time, there was ample evidence that the consumer was ready to embrace new behaviors in the way they live and shop. Then, the recession happened, and behavior shifted back to worrying more (understandably) about managing a budget. We seem to be at an even more pronounced inflection point today, driven by the next generation of consumers who want to shop and live more sustainably. This will have a profound impact on packaging, ingredient integrity, food waste and the rise of the rental and second-hand resale markets. And yes, taken all together, it could signal a shift towards less overall consumption. Companies who embrace these values will be well positioned for the next decade.

    Peloton’s Orange Showroom serves as a central hub for prospective members to test out the Bike and Tread firsthand, receive a personalized tutorial and learn more about the live studio experience that they can bring home.

  3. The shift towards an experience. We have been speaking about experiential retail for some time. It is often misinterpreted to be about “entertainment”. But, the real shift will be away from retail stores and toward shopping centers which focus on product and an increasing move towards services, food and beverage, health care, fulfillment and yes, entertainment. As “purchasing” continues to shift on-line, stores must rethink space, rethink assortments and rethink the purpose of a retail trip. The new Nordstrom Flagship in New York is illustrative of this shift, with less space dedicated to products and more space dedicated to services, food and experiences.
  4. The economy comes into play. Somehow, we managed an entire decade in the U.S. without a significant economic downturn. We won’t be so lucky in the next decade. With an inevitable downturn, expect a greater number of retailer casualties (bankruptcies, closures, downsizing) coupled with new behavioral shifts. Value retail and private label are examples of segments that thrive during recessions. If retail has been tumultuous during good times, imagine what changes a real recession will bring.

    Starbucks Reserve Roastery Chicago is the company’s largest retail experience celebrating the company’s heritage and paying homage to the roasting and craft of coffee.

So, what does it all mean?

  • Expect significant change in retail. Retail will change dramatically in the next decade, particularly in the ways in which we manage the business and the way that customers will transact on-line and in-store.
  • If you’re a retailer, supplier to retail, in retail real estate, etc., you need to ask one simple question: Are you ready for the next decade?

How you answer may well determine whether you’re still in business in 2030.


Under Armour: Is The Only Way Through?

As Under Armour founder and chairmen Kevin Plank unveiled a new brand message – “The Only Way is Through” – SEC filings revealed that in the last quarter a hedge fund made a significant bet on Under Armour’s future performance. Lone Pine Capital LLC purchased a nearly 7% stake in the company.

The only way through can mean many things – as can an investment of this size. Is it a vote of confidence in the current management and strategy or a reflection that substantially better things are yet to come… perhaps after a change?

Under Armour has been beset by a series of executive changes and missteps over the last 18 months. Former CEO Plank stepped down in October, a strong marketing executive departed for Nike, a toxic sales culture led to a series of changes in the company’s code of conduct, and an ongoing SEC investigation into accounting practices was revealed. From a business perspective, the company made slow progress during a three-year turnaround strategy.

The company’s recent performance may signal that progress is accelerating. Although North American sales decreased by 4% in the company’s 3rd quarter (ending September 30, 2019), gross margin improved year-over-year and the company successfully shrank revenue generated by the off-price channel. However, a major push into footwear stalled as category revenue decreased 12%. Soon to be released fourth quarter results will reveal if the brand has succeeded in returning to growth.

But Under Armour still faces challenges. Has the sales-first culture of the last two decades – including forcing sales through the off-price channel – really changed? Has brand strategy,  merchandising and design replaced the sales team as the drivers of the brand – as it did at Nike long ago? Can the company cope with the struggles of a large account – Kohls – as the former business driver Dick’s continues a push to private label? Can the brand attract women? Will performance drive sales as athleisure maintains a grip on athletic wear? Can the retail business expand beyond outlets into full-price channels? Perhaps the Only Way is Through – but that sounds suspiciously like the sales team still steers the ship and has a male-focused bent.

New CEO Patrik Frisk has wrestled with these questions since joining Under Armour as President in 2017. 2020 will reveal if he has orchestrated the necessary change – and indicate the path Lone Pine might advocate as significant shareholders.


Five Trends That Shaped A Decade

As the Holiday season of 2019 winds to an end, I am going to use this time to look back and to look ahead. The 2010’s were a transformative decade for retail. While Retailmageddon didn’t exactly come to pass, we saw a significant slowdown in physical brick and mortar retail growth and an unprecedented number of retail store closures. From a macro-standpoint, I can point to these five significant trends that shaped retail as we know it coming into a new decade.

  1. Overall strong economic and retail growth. After a crippling recession in 2008-09, retail sales rebounded and drove sustained growth through the decade. Overall sales grew as the overall US economy flourished, driven by positive consumer sentiment and historically low unemployment. As retail sales approach nearly $5 trillion, retail (and consumer spend) has been the engine of the US economy.
  2. The rise of Amazon and e-commerce. If we look at the changes in the top 10 retailers over the past decade, there is one company in particular that sticks out. Amazon is now the second largest retailer in the U.S. and remains one of the fastest growing as well. While the rest of the top 10 remained constant (Walmart was and most decidedly remains the big kid on the block), Amazon’s meteoric rise has changed the complexion of retail. And with Amazon comes the subsequent growth of e-commerce. While now accounting for around 10% of total retail sales, its double-digit growth rate and disproportionate impact on key categories (books, electronics, apparel) has altered the retail landscape. As e-commerce approaches 20% plus of sales within a category, the impact on retail has been profound.                                                                                                                       
  3. The collapse of the middle—the everlasting move to value. Retail success has been disproportionally weighted to the extremes. Those companies who have demonstrated that they can provide real value for the consumer have been winners over the past decade. Walmart and Costco, of course, are demonstrations of this trend. If we look beyond the top 10, three retailers in particular stick out. TJX, Aldi and Dollar General all show up in the top 20 in sales and all continue to be on growth trajectories. The move to value is nothing new in retail but this decade exacerbated the trend, even during strong economic times.
  4. Private equity and its impact on retail economics. Private equity played a meaningful role in the past decade in the world of retail. And not necessarily to its benefit. Most of the notable bankruptcies during the past decade have seen a private equity component associated with it. Toys R Us, Sports Authority and Gymboree are three examples of retail bankruptcies during the decade that had significant private equity ownership. While private equity alone is not responsible for the disappearance of these chains, high debt levels and leverage makes it difficult for retailers to maneuver during difficult times. Private equity played a prominent role (and likely will continue to do so) in the flexibility of retail firms to survive during difficult times.
  5. The power of the consumer. In the end, the biggest influence on the world of retail over the past decade is the increasing power of the consumer to efficiently vote with their wallets. The conversation with the consumer has moved from a one-way advertising model to a holistic feedback loop. Purchasing is now fluid, no longer tied to a particular geography. This means that anyone with a good idea can sell to any consumer around the world. Direct to consumer brands can bypass traditional supply chain, distribution routes and channels to appeal directly to the consumer. The biggest drivers of this change are both technologies that began in the 2000’s but took off in the past decade. Smartphone usage boomed this past decade, with 265 million users in the U.S., four times what it was in the beginning of the decade. Social media usage also nearly doubled as a percentage of the population using various platforms as well as the time spent online. This has given customers new ways to interact and communicate with brands and retailers.

In the next blog, I will look at the future of retail. Where will we head in the next decade and what retailers will need to do to be prepared.


Is It OK To Wait At Starbucks?

A long wait is not the typical experience at Starbucks. But waiting is part of the journey at Starbucks’ newest Roastery on Chicago’s Michigan Avenue. On a recent Friday – nearly three weeks after the Roastery opened – lattes were delivered six minutes after they were ordered. Experienced Starbucks customers attempted to skip the wait by ordering ahead with the Starbucks app – and were disappointed that the pick-up service is not available at the Roastery.

There are 31,000 Starbucks cafes in the world. The six Roasteries – including the 35,000 square foot Michigan Avenue location – are temples to coffee. And they may be the only Starbucks locations where the company intentionally serves its customers…. slowly. The wait stands in stark contrast to the Starbucks Pick-Up concept at Penn Station – the first-of-its kind Starbucks location designed solely for customers that are on-the-go in the New York transit hub. Both locations opened in November.

Who needs a 35,000 square feet coffee shop?

As a multi-billion-dollar retailer, Starbucks has the luxury of operating multiple formats to serve its customer. The Pick-Up may become standard in many locations where the customer wants to grab and go. But the Roasteries are the ultimate brand-building arm of the company’s physical location and concept strategy.

Charging a premium for a commodity product is impossible without developing an emotional relationship with the customer. For decades, Starbucks accomplished this feat with a friendly barista and trendy set-list. And as the smartphone took hold, Starbucks adeptly utilized the mobile app to create an order and pay system that combined European coffee café culture with convenience. The Roastery locations are intended to re-ignite the customer’s original emotional attachment to the Starbucks brand by building powerhouse cafés; the Chicago Roastery was described by the company as a “Love Letter to Chicago.” Based on the beauty of the Roastery locations and teeming crowds, the company seems to be succeeding.

Starbucks stores conveniently located near you. Credit: Google Maps

For customers that want the convenience of the mobile order and pay system – well, there are more than a few locations within an easy walk.


Amazon And Its Continuing Assault On Food Retail

There were two significant stories in the past few weeks involving Amazon’s incursion into the world of food retail. The first was the announcement of changes to pricing for the Amazon Fresh delivery service and the second was the recognition of what has been an oft rumored launch of a new grocery brand. I wrote about these rumors back in March 2019. While these are two separate stories, they really build off one another and offer clues to their future plans to dominate the grocery world.

First, Amazon announced that they will no longer charge for their Amazon Fresh service for Prime members. Amazon Fresh, launched back in 2007, offers proof that not everything Amazon touches turns to gold. This service has slowly expanded without much fanfare, and is now offered in twenty-one metro markets in the U.S. It has been slow to take off and shows the immense challenges associated with delivering fresh groceries to U.S. households. When launched, this service was priced at $299/year. They later changed to $14.99/month in addition to the cost of a Prime membership. Now, it’s free (with a $35 minimum purchase) with Prime but the pricing strategy changes illustrate a core problem of grocery delivery—it is expensive to execute, with the costs of warehouses, trucks and drivers and the trickiness of getting fresh and frozen products into consumers’ homes. In addition to Fresh, Amazon has also been focused on growing their Prime Now program, which delivers from Whole Foods. In fact, there has been so much focus on growing this “instant” delivery service that many Whole Foods stores are becoming overrun with Prime pickers, interfering with the retail customer’s shopping experience. And, of course, you can still order directly from Amazon with Pantry and Subscribe & Save. Confused? It’s a good bet that consumers are as well.  Nevertheless, this relentless pressure on growing delivery has implications for others who are trying to compete (and trying to make money) in this space.

The second story is Amazon’s confirmation of their first “Amazon branded” (name unknown) grocery store that will open early next year in Southern California. The 35,000 sq. ft. store is in a former Toys R Us (irony is not dead) and will offer a glimpse at Amazon’s latest attempt to penetrate the grocery world. The obvious question is why do they need this, given that they already own Whole Foods and have launched Amazon Go?

I’ve had a chance to look at the floor plans and here’s what I suspect we will see:

  • It will be “omni” from the start. Rather than convert Whole Foods space into efficient picking and distribution points, these stores can be optimized for an omnichannel experience from day one. The store’s plan indicates that it will have significant space to accommodate in-store picking and substantial holding facilities.
  • It will be focused more on mainstream grocery products rather than the natural and organics offer of Whole Foods. This will be aimed at slightly lower income customers and for those looking for Coca Cola, Oreos, Tide or any of the mainstream CPG products Whole Foods doesn’t offer. This is where the larger market share is available.
  • It will likely be more price competitive. While they have tried to mitigate Whole Foods’ high price reputation through reduced prices and Amazon Prime promotions, it is an uphill battle. An Amazon branded store can be more price driven out of the gate.
  • It can be more private label driven. Amazon has continued to grow its private brand presence and while new technology will likely be employed in the store, don’t expect Amazon Go checkout free technology….yet. There are plenty of traditional checkouts (likely self-service) planned. I suspect that the technology is not scalable at this point.

This will likely be the most anticipated new grocery store since Tesco opened Fresh & Easy and Lidl debuted a few years back. It’s worth noting that Fresh & Easy is a footnote in grocery history and that Lidl has yet to gain serious traction. While it would be foolish to discount Amazon’s potential impact on the industry, gaining success in grocery is a lot harder than it looks.


Walmart’s Glass Is More Than Half Full Heading Into The Holidays

Walmart’s performance in the third quarter should serve as a powerful reminder to the retail community that the world’s largest retailer remains a formidable competitor even as Amazon continues its assault on the rest of the market.

Comparable store sales were up 3.2% in the U.S. with a combination of traffic gains and higher transactions. Although comps marginally slowed year over year, this is now the fifth year of consecutive comp increases. Not bad for a mature retail company no longer being helped along by a fleet of younger stores.

Online comps were up 41% this quarter. The company attributes much of that growth to the grocery business. Online pick up is now available in over 3,000 locations and home delivery called Walmart Delivery Unlimited through about 1,400 locations. Walmart is attempting to match Amazon in both speed and price around home delivery.

Results and guidance suggest a healthy Holiday season as impacts to date from tariffs have not materialized and U.S. consumer confidence remains strong. If there are any warning signs on the horizon, they would be in the following areas:

  • Sam’s Club’s performance was comparatively weak, with comparable store sales only rising 0.6% in the latest quarter. As Sam’s former CEO takes the helm at Walmart, his replacement has just been named. Kathryn McLay. She was most recently Executive Vice President at the 700 unit Walmart Neighborhood Market and was Senior VP of Supply Chain prior to that.
  • There is a growing cost associated with rising e-commerce sales. The company is locked in a war with Amazon, who raised the stakes last week by eliminating the fees associated with Amazon Fresh for Prime members. Walmart acknowledged that they need to grow (higher margin) general merchandise sales to drive increased profitability.
  • The loss of Greg Foran as Walmart U.S. CEO has yet to be felt and the tensions between the e-commerce and brick and mortar divisions continue. For a company of Walmart’s size, driving innovation and profitability will be a core challenge.

Even picking holes in the performance, it is hard to bet against Walmart. They are navigating a treacherous retail environment as well as anyone and providing a roadmap for other retailers. Walmart was first out of the gate for earnings. It is still too early to read whether their success translates to the rest of retail and the U.S. economy, but they have set a high bar for others to hurdle.


Global Digital Retail Innovation From Walmart China And More

“Change (in China) is so dynamic”

Walmart’s SVP of Cross Border Trade, Ben Hassing set the tone for the sixth annual Global E-Commerce Leaders Forum (GELF) NYC program. Hassing’s keynote presentation, “The Local of Global Ecommerce” shared his experience as the head of Ecommerce and Technology for Walmart in China, and how China is on the frontlines of digital retail innovation. One key theme of the GELF NYC program was the “inbound-to-the-US” strategies that recognizes the US is no longer the center of the digital retail universe. Retailers and brands need to look overseas for innovation—to be applied to other markets, including domestically. Hassing’s insights on challenges and solutions in the Chinese market—not only for Walmart but other foreign brands too—reinforced this need.

2019 marks the sixth annual GELF NYC conference, and 13th overall since its inception in 2014. The community is comprised of digital and international executives from global brands and retailers, disruptive digital natives and solution providers to global and cross-border ecommerce.

Hassing’s keynote covered a range of issues he faced as the executive in charge of Walmart’s Chinese ecommerce and omnichannel strategies over a four-year period. He joked that in the five weeks since he left China, the digital retail world has already changed. But his on-the-ground experience was a highlight for most of the conference delegates. Insights he shared included:

  • The evolution of digital retail platforms – a key finding in the soon-to-be-published 2019 GELF China research study, where US-based brands are now managing the complexity of a multi-platform world (e.g., Tmall, WeChat, JD, Little Red Book, TikTok and more).
  • How foreign retailers like Costco and Aldi have entered China via an ecommerce presence on Tmall, before opening physical stores. And the very high expectations of Chinese consumers when it comes to the experience and value they seek—foreign brands or domestic.
  • Chinese Platform-Native brands are starting to open stores (e.g., Three Squirrels, Keepland, Elf Sack). The concept of building a brand, starting as a seller on a marketplace should continue to emerge in China and export to other markets.
  • WeChat’s central role in the lives of consumers, as demonstrated by a video of a 10-year old child navigating a mobile-based purchase and store self-checkout. Equally important to the daily tech immersion is the affordable customer acquisition costs via WeChat, as the rising cost of acquisition is a global phenomena and China is not immune to these business challenges facing all brands.
  • Walmart’s challenges of operating smaller format stores to adapt to rising real estate costs; balanced with the growth of O2O (online-to-offline) ecommerce orders fulfilled through stores. With over 3,000+ orders per day being fulfilled through WM stores in China, Walmart is building strategically placed inventory depots (aka, warerooms) with roughly 3,000 high velocity skus, in order to achieve a 30-minute delivery window expected in a tier one city like Shanghai.

Other highlights of the GELF NYC program included topics that have been growing in importance for many brands in recent years. Online marketplaces continue to garner a growing share of brands’ digital commerce attention, yet brand control remains challenging. Comparisons were made between Latin American marketplaces such as Mercado Libre and Amazon-dominant European markets, and what brands can do to retain price control, and work with marketplace operators to manage unauthorized sellers that are damaging their brands. Southeast Asia was the focus of a “next-generation market” session, featuring two brands who have an international following of customers (Chinese Laundry and MZ Wallace). PVH Corporation shared how they established ecommerce shared services to work across their portfolio of brands, driven by their focus to get closer to their customers and enhance the customer experience. More than 30 speakers shared their experiences with international ecommerce, and a half-day workshop on China provided in-depth conversations among many global brands in attendance.

The next GELF conference will be February 13th in Los Angeles, at the Directors Guild of America Theatres in West Hollywood. For more information about speaking, sponsoring or attending, contact Jim Okamura,

Is global ecommerce a topic of discussion among your management team? Ask us about our management briefings and workshops—whether a one-hour or full-day program. We help all types of retailers and brands understand the rapidly changing digital retail landscape; and the strategies they should consider.


Forever 21 Lands In Bankruptcy After Years Of Undisciplined Growth

In one of the most anticipated bankruptcies in some time, Forever 21 officially declared Chapter 11 over the weekend, adding to the list of large retailers who have retrenched their store base or fully closed down in 2019. While many argue whether we are officially in a Retailpocalypse or not, it is very clear that the retail landscape is undergoing a seismic change.

Like every bankruptcy, Forever 21 is a combination of a company being caught up in macro changes in the retail environment as well as specific conditions that have had an impact on them. The macro changes are well-documented: increasing spending online, a stagnant apparel market and the whims of fast-fashion apparel retail, which is always subject to the vagaries of a fickle customer base.

For Forever 21, in addition to the above, it is a case of a company that grew too big and too fast. Like Icarus, who flew too close to the sun, Forever 21 was constantly pushing the boundaries of store size (moving from a small specialty retailer at their inception in 1984 to taking over full-scale department store spaces) and geography (spreading itself across 40 countries and multiple continents). I could argue that it was inevitable that their undisciplined growth finally caught up to them.

By the numbers, Forever 21 has over 800 stores in over 40 countries. The initial bankruptcy plans call for nearly 350 of these stores to close on a global basis including the full exit from many European and Asian markets as well as Canada. Nearly a third of the US store base could close with a reported 178 of the 540 or store locations here subject to closure. Hopefully the result will be a leaner, more focused company. It will need to be in order to respond to a shifting market.

This article first appeared in Forbes.