Retail Changes – Bebe Shutting Down

With pressures in the retail experience and changes in consumer behavior, we see one more retailer shutting down. California based Bebe, founded over 40 years ago, has just announced a complete shut down of its retail stores (mostly mall based).

October retail sales for Bebe, a wemans closthing store chain, which has been on a hot streak, was o

The Facts on Bebe

Bebe will be shutting down all 175 (168 according to WSJ) stores by May 2017 – a rather immediate and decisive action. This will likely impact 2,327 part-time employees that are tied to the stores. Speculation is that with its $60M in cash, it will continue operating an online only model.

Following Other Retailers

There is a growing list of American retailers filing for bankruptcy and shedding retail, brick and mortar operations including Limited Stores, BCBG, and American Apparel.

Competitive Pressures

Pressures from competitors, including Zara which is surging and has a dynamic competitive advantage in time to market; and H&M which has celebrity endorsements are just some of the major players impacting Bebe.

The Amazon Boomerang

In quite the irony… first… Amazon having a deep impact on the retail industry (as witnessed by this and similar situations, as well as my observations simply walking around NYC’s empty ‘for lease’ signs).

As stores shutter, the irony is that Amazon is opening its own brick and mortar stores, with unique models in shopping, dynamic pricing, and checkout. So it isn’t really about brick and mortar being bad… it is about the retail experience.

Is the U.S. Market Slowing Down?

So is the U.S. market in trouble? Not really… British brands such as Top Shop, Primark, Reiss, The White Company are all jumping into the U.S. and see growth opportunity.

The Retail Experience

There is an absolute change in consumer behavior – much of it stemming from the changing demographics. Retailers who aren’t able to understand the change in customer mindset are going to perish. Customer experience, and specifically the retail experience must become a major focus to adapt to changes in the way people buy. Experience is becoming more important.

As more retailers come to terms with competing in an omni-channel environment, it is a combination of engaging their audience, providing a retail experience, and offering a product that resonates with the audience that will help retailers compete and win going forward.



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