The “Clothing Bubble” Has Burst
This is why retail is dying. Maybe.
Hey, here’s some more news, albeit it a bit late, from Bloomberg about why retail as we know it is dying.
In the first months of 2017, over 14 retailers have filed for bankruptcy, which is more than 2016 in total. We’ve expounded upon this conundrum at length, so before we get into the newest possible reason, let us revisit.
Instagram and Amazon killed retail and they won’t be stopped until we’re all shopping from our phones, clutching tight to a PopSocket with the lights off in bed, buying toilet paper and FashionNova jumpsuits without having to put pants on. If we do happen to leave the house and go to the one place that exists to sell you things in person, you will soon be forced to contend with an entire army of enhancements, like robots, self-checkout machines, smart shelves, and mirrors — frustrating you with their inefficiency so that you run back to your home and buy the socks online, like a sensible person would.
Great! Now that that’s out of the way, Here’s the reason Bloomberg is doubling down on: there are too many places to buy clothing and so some must be winnowed out.
Urban Outfitters Chief Executive Officer Richard Hayne said as much on a conference call with analysts last month. There are just too many stores, especially those that sell clothing, he said.
“This created a bubble, and like housing, that bubble has now burst,” said Hayne. “We are seeing the results: Doors shuttering and rents retreating. This trend will continue for the foreseeable future and may even accelerate.”
Did you even know it? We were living in a clothing bubble, with a glut of choices and now that bubble has burst. We are, as Nicole pointed out earlier this month, over-stored. I’d argue that this is not entirely the case — there are lots of places in this country that are under-stored, or at least are under-stored for the things people want.
There’s a handy graph that depicts the kinds of stores that are going out of business, with department stores at the top, followed closely by electronic stores and apparel. The demise of the department store is probably somewhat related to the rise of Target — why would you go to a Macy’s wen you can get Macy’s-esque things at Target while also buying motor-oil and hand sanitizer, all in one go? Electronic stores makes sense, too; stepping into a Best Buy is an activity that ranks pretty low on my list of things to do for fun. I would much rather buy headphones or a television or an air conditioner online.
People who live in large cities are possibly over-stored. There’s a certain block in Chelsea where I am about equidistant from two different Sephoras and a stretch of Soho contains two separate H&Ms within spitting distance of each other. I am not over-stored by any means, but I imagine that there are some places that do not enjoy the luxury of having three different fast fashion stores within blocks of each other.
If we inevitably kill the retailers,where will we shop? Will everything be at Target? Will stores in general be dead? Will we order from our handheld devices and have them delivered by drone? We still need stores. Save the stores.
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