It was a sad day in fashion on April 27, 2012. Betsey Johnson LLC has filed for Chapter 11 bankruptcy. According to Woman’s Wear Daily, Betsey Johnson will be closing her boutiques (except for some key flagship stores) and laying off over 350 employees. After reading the article, my mind started to wonder about the future of some high-end retailers. I decided to use this post to explain why I believe Betsey Johnson is only the first of many high-end retailers set to fall like dominoes due to this economy and the new age of smart consumers.
First off, who doesn’t love Betsey Johnson right? I’m an eclectic dresser myself, so her collection brought a great element of fun and flirtatiousness to my wardrobe. When my budget would permit it, I’d splurge on a pair of shoes, or even a dress. I mean sure $250 to $350 for a sweater might be peanuts to some, but to many… It’s a bit much. That’s why I think Betsey had to file bankruptcy. It’s just not enough “ballers” in her target market anymore. I always go by the saying quality over quantity. I consider Betsey Johnson a great investment in style, but quality? I just don’t know. Why you ask? Well, if you check the labels on her clothes, a lot of it was made in China, just like Forever21, Love Culture, and Know Style, which is NOT considered “high-end”. You can also find Betsy Johnson in your local Ross stores or Macy’s. People have become more budget savvy. With the internet at their disposal, the consumer with an average income saves time, energy, and money. This economy is hitting these high priced boutiques hard! In fashion there are so many affordable options. It’s no wonder why high-end retailers are struggling to keep up. Companies like Kenneth Cole, Liz Claiborne, and Talbots, have recently experienced deep declines in their first quarter sales. (See it here) Who knows? Maybe they could be next! It’s time for their marketing executives to start creating campaigns that can serve up a large piece of humble pie! The fashion industry can be so egotistical sometimes.
I believe marketing without humbleness is the culprit. They don’t let their target market KNOW what’s going on before it gets bad. What could it hurt? This may come as a shock, but shoppers do respect honesty! Letting us know when they’re in trouble might just dig them out of the financial hole they’re in. I’m sure there are loyal consumers who don’t want to see their favorite brands disappear or get watered down. If these companies create a marketing strategy asking consumers to …help them, who knows what that can do? There have been many retailers that have seen declines in profits over the years. It’s scary that some of our most popular high-end brands will be going the way of the Dodo bird if they don’t start appeasing to the demand of the smart consumer. I believe that they can still maintain their brands integrity while providing consumers with cheaper alternatives in style. Some companies like Zac Posen and countless others have done collaborations with stores like Target and H&M. What I think they should do is come up with better promotions and close one or two stores until this economy picks up. I’ve noticed a lot of stores opening up in China, and rightly so. Women of Asian cultural background tend to stay at home longer, so they have a bigger disposable income. What I would do is invest in countries with a bigger population and money to play with. I’m not sure about other parts of the world, but that’s up to them to do research. I can’t do all the work for them ;) For now, lets just focus on the positive. Retail, and the economy WILL bounce back…Right?
Let me know what you think by commenting below.
