Don’t write off retail stores, official says

Amid the recent talk of the “death of shopping malls” and Amazon’s march toward selling everything to everyone everywhere, it might be worthwhile to consider other viewpoints.

During a recent interview, the CEO of the International Council of Shopping Centers pooh-poohed the notion that the physical store is dead or dying.

“As a whole, the industry is healthy,” Tom McGee told the Miami Herald recently. “Occupancy at most centers is full or close to full. You see the normal churn, but the industry has done a good job of navigating itself out from the heights of the recession.”

“I don’t mean to diminish the important impact technology is having in the

retail sector,” he said. But, “even Amazon at $136 billion in annual sales is a small percentage of the $24 trillion dollars in retail sales worldwide.”

What is often missed, he noted, “is online-only retailers are opening up physical stores,” even Amazon, McGee said. “An example is Warby Parker, which started online and has opened retail locations. Anyone who wants to get the masses generally has to open physical stores.”

In fact, some traditional retailers have realized that having a fleet of stores can be a help rather than a hindrance in cranking up sales.

DSW, for example, is currently using its physical locations to fulfill as much as 40 percent of digital orders, CEO Roger Rawlins said during the company’s recent quarterly earnings report.

Rawlins emphasized the point that the company’s 500 stores double as distribution centers by intentionally referring to them as “warehouses” — and top locations as “our power warehouses” — during the conference call with Wall Street analysts.

“We are looking at our business as a digital business, and with the digital business you have to place warehouses close to your consumer,” Rawlins said.

“With our 500 warehouses we have today, we’re within 20 minutes of 70 percent of the U.S. population. So when we’re looking to build out a new warehouse we’re trying to figure out, how can we get closer to that customer, so that someday we can meet that demand of the customer of delivery within whatever short period of time we want to deliver.”

Brick house

Speaking of online retailers opening physical stores, Columbus-based online retailer Eloquii has opened its first store, a temporary or pop-up shop. But the plus-size retailer passed up opening the store in its home base.

Instead, Eloquii’s 2,600-square-foot temporary shop is in Arlington, Virginia.

The Washington, D.C., area “is our No. 2 market,” CEO Mariah Chase told Washingtonian magazine. “When we found a great space at Fashion Centre at Pentagon City, it was more a question of ‘Why not D.C.?’ “

The temporary location will be open through June, Eloquii says, although if the run is successful, it could portend permanent physical locations.

Originally a sub-brand of The Limited, Eloquii was shut down in 2013, but it was brought back as a standalone company in 2014 when former Limited employees saw potential in the plus-size sector and branched out on their own.

Junk rating

Ouch. That’s got to hurt. About a week after Abercrombie & Fitch reported fourth quarter results, Moody’s downgraded the New Albany-based retailer’s debt rating to junk status.

The bond credit ratings company cited “the ongoing promotional retail environment and brand challenges” in making the change.

Abercrombie has been working hard in its turnaround plan, and its Hollister brand showed plenty of signs of improvement as it posted the first quarterly rise in comparable-store sales in a year.

But various pressures — including online competition and fastfashion rivals — have “largely offset management initiatives to reduce costs, improve assortment and grow omni-channel,” analyst Raya Sokolyanska wrote in a note about the rating.

Signs of the times

Sisterhood is strong — and retail sales show it.

The Women’s March that took place in January in more than 600 cities around the world not only made an impact politically but also in several retail categories.

According to statistics compiled by the NPD Group, more than 6.5 million poster boards were sold during January, with nearly onethird sold during the week of the march. In the week before the march, when protesters were busily making signs, sales of poster boards were up 33 percent and foam boards by 42 percent compared with the same week the prior year.

In addition to posters, marchers made plenty of T-shirts with personalized messaging, and that was reflected in fabric paint sales the week before the march. At least three times as much paint was sold during that period compared with other weeks in January.