Can Mass Retailers Survive Post-Covid?
It started with Barney’s, may they rest in peace. Large retailers across the nation have been suffering even before the pandemic began. Macy’s has been closing stores and cutting workings nationwide. If this was the climate pre-pandemic, how will any department stores survive from covid-related closures?
Neiman Marcus Group was the first victim of the pandemic’s economic turmoil. They entered into bankruptcy early last month, with nearly $5 billion in debt and 14,000 furloughed employees. However, they released a statement that there would be no mass closings, on a permanent basis. The good news is, bankruptcies aren’t the end for department stores, they are simply a call for help. Seeing the mass filings of Chapter 11’s may seem like the large retailers are doomed, but with reorganization, sale, or liquidations, stores can survive.
Some retailers have taken steps to provide alternative sources of revenue amidst the pandemic crisis. British luxury retailer, Harrods, recently announced the introduction of the first Harrod’s Outlet, a summer-only pop-up sale located within the recently closed Debenhams. While the store itself has been closed for months in response to the pandemic, with reopenings starting globally, the retailer plans to provide a safe shopping experience that meets all health-related requirements, like wider walkways.
The unusual approach should be a source of inspiration for American retailers as Harrods aims to make back some of their lost revenues through this pop-up. Dozens of unsold designer items will be available for discounted prices at the outlet. Though the uncertainty remains of whether or not the items will sell, Harrod’s will be able to directly sell their unsold goods, rather than selling to a second-hand discount site like The Real Real or Gilt.
The outlet’s opening in July could serve as a source of hope for bankrupt retailers in the U.S., depending on their financial successes. As the reopening of economies spreads nationwide, it will be interesting to witness how department stores move, adapt, or die.
By Staci Soslowitz