Recognize Declining Retailers: Three Stages

As we read regularly, many retailers are having tough times. Today, we study how to recognize declining retailers: three stages of decline.

Previously, we discussed other types of failure. For example, see Reasons Why Many Startups Fail and Why Don’t Some Store-Based Retailers Get It?

According to Retail Dive, these retailers filed for bankruptcy projection in 2017. Many of the firms continue in a weakened state. But others have gone out of business:

Alfred Angelo
BCBG Max Azria
Charming Charlie
Eastern Outfitters
Gander Mountain
Gordmans stores
Papaya Clothing
Styles For Less
The Limited
Toys R Us
True Religion
Vitamin World
Wet Seal

Now, click the image for a description of each firm’s status.

Recognize Declining Retailers: Three Stages

And view CNN’s video on U.S. malls and shrinking retailers.


    Recognize Declining Retailers: Three Stages

    Though not always considered as such, data analytics must start with knowledge of what to monitor. In the case of declining retailers, it is essential to be aware of their stage of decline.

    With the preceding in mind, let’s look at the framework devised by Outcalt & Johnson: Retail Strategists. That firm operates Retail Turnaround Experts. And it founded the Retail Owners Institute.

    According to Outcalt and Johnson, eight “vital signs” indicate a retailer’s stage of decline. As shown in their chart, these vital signs can be placed into three stages:

    In stage one, retailers have entered decline. This is the best time to modify strategies and tactics. Why? Because it is easier to turn performance around. By the time retailers move to stage three, it may be too late to fix things. Why? Because the vital signs are so off, it may not be possible to successfully modify them.

    Recognize Declining Retailers: Three Stages

    This entry was posted in Part 1: Overview/Planning, Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 5: Managing a Retail Business, Part 8: Putting It All Together and tagged , , , , . Bookmark the permalink.

    2 Responses to Recognize Declining Retailers: Three Stages

    1. It is ironic, I see Stage Stores in at least stage one and yet they just bought Gordman’s. And they are probably going to kill off Gordman’s like they did Goody’s. Who knows, maybe a year or two maybe Jeff Gordman will buy up Stage Stores.

      The problem with Gordman’s was that they did not embrace technology. They were too slow to hit social media, let alone the Internet. It is such a great store. It just makes me sad.

      Toys R Us is a classic Stage Three. They were done in by bad financial management, just like Sears Holding, and not the Internet. Without a massive injection of cash to pay off vendors and bring their stores up-to-date, TRU will be a memory.

      Camping World buying Gander Mountain was an excellent move for all parties. CW/GS gets a foothold in associated retail space and GM gets a marketing & management powerhouse.

      If anything does in True Religion, it is that they held out too long to keep the company afloat without going down market. They did not want to water down their brand. It would be a good fit for Gap Inc. at the right price.

    2. Pingback: What Caused the Death of Toys ‘R’ Us | Retailing: From A to Z by Joel Evans

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