A Toys R Us store that was shuttered in 2018 is seen on June 21, 2019 in Orlando, Florida. Toys R Us … [+]
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The last decade saw massive changes to the retail landscape; Instagram helped thousands of new brands to emerge, direct to consumer offerings like Everlane and Away removed the need for retailers in the supply chain entirely, fast fashion brands such as Boohoo utilized the internet to quickly test and learn which lines would be successful before buying large volumes of stock and… Amazon swept away all that was before it by launching new category after new category and signing up over 100m Americans to Amazon Prime – locking them into long term loyalty in the process.
With all of this change, there were casualties with a number of well-loved and long-established brands disappearing due to their failure to adapt to the new retail environment they found themselves in and the challenges this presented to their outdated business models.
These brand closures resulted in thousands of bricks and mortar store closures and tens of thousands of job losses. The following are some of the biggest retail businesses lost in the last decade.
Toys R Us: The leading toy store struggled to compete for years with the influx of cheaper prices available online compounded by a lack of investment in stores due to multiple leveraged buyouts. The company closed its doors in April 2018 after filing for bankruptcy protection in September 2017. The stores still trade in China after previously being bought by a partner there.
Borders: At one point the bookstore chain had over 1,000 stores but the rise of e-readers like the Amazon Kindle killed off this chain and in 2011 it filed for bankruptcy protection before closing its remaining 399 stores. In recent years there has been a slight recovery in book sales and stores with people returning to choosing physical books.
Blockbuster: The death of Blockbuster was a protracted one and lasted the full decade, in 2010 the company filed for bankruptcy and was purchased by Dish Network in 2011 – enabling 1,700 stores to remain open. By the end of 2014 though this was no longer sustainable due to the rise of streaming and the success of Netflix and at this time all corporate stores were closed. Two locations remained open in remote Alaskan locations and one in Australia till 2018 and 2019 respectively and there is one store still remaining, a franchise in Bend Oregon.
BHS: After 88 years of retail history, 163 stores were lost in June 2016 after a two-month-long struggle to save the retailer failed. The company collapsed with £1.3bn in debts, of which £571m was owed to its pension fund. The success of high street rival Primark on the British high street was blamed along with a lack of investment from former owner Arcadia. The chain was sold to a group headed by Dominic Chappell in March 2015 for £1 but went bankrupt little over a year later and Mr Chappell himself has now been banned from being a company director in the UK for 10 years for his role in the collapse.
Poundworld: Founded in 1990 Poundworld was one of the first £1 retailers in the UK but by 2018 it faced stiff competition from the likes of Poundland and Poundstretcher. The company closed its 335 stores resulting in 5,100 job losses in August 2018, partly blaming the fall in the value of the pound after the 2016 Brexit referendum.
American Apparel: Okay, so American Apparel still actually exists but does so without any stores and with an entirely new corporate structure. The company made famous for its American made basics, and sexually explicit advertising went bankrupt in 2017 after a previous recapitalization in 2016 hadn’t produced the required turnaround following six years of losses. The company that started life in Montreal back in1989 now operates entirely online and now markets itself as “Ethically Made-Sweatshop Free”.
Nasty Gal – Again the brand lives on but not as we know it! In 2012 Nasty Gal was named ‘Fastest Growing Retailer’ by INC Magazine but in 2016 the company filed for bankruptcy and was purchased by the Boohoo group to operate under its umbrella of fast fashion brands. The company had found success and raised $40m on the back of its founder, Sophia Amoruso, selling vintage pieces of clothing on eBay that she sourced from stores in San Francisco.
Retail changed fundamentally in the 2010s – from what consumers expect from brands, how they interact with them but also the brands that they interact with. any of these companies would still be going strong into the 2020s had they chosen strategies to respond to the rapidly changing consumer behaviors and environment they found themselves in.