Top Stories of 2019

Amazon is thriving at 25, Sears is dying at 125. Hudson Yards opened in New York, Lord & Taylor closed, and another cast of retailers packed it in. And Walmart did the right thing
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Posted December 9, 2019

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The August 1994 Usenet post said, “Well-capitalized start-up seeks extremely talented Unix developers to help pioneer commerce on the Internet … Send resume and cover letter to Jeff Bezos, Cadabra Inc.”

Twenty-five years later, on Amazon’s (Seattle) silver anniversary, the retail world has been transformed thanks to what Bezos wrought.

And technology rambles on. Remember Usenet? When in the future will someone say, “Remember Amazon?”

Brexit Ramp.

Throughout the year, the headlines followed the up-and-down, in-and-out opera buffa attempts to steer Great Britain out of the European Union.

But the business pages told a less-funny storyline: British consumers turned cautious and pessimistic as Boris Johnson orchestrated his mad roundelay. U.K. retail sales essentially flat-lined during the summer and into fall, anticipating the end-of-October Brexit deadline. And the pound tumbled against the dollar, making Britain a less-inviting market for American brands.

Don’t Let the Door Hit You.

Amazon always received pretty much whatever it’s wanted – until New York City said, “Thanks, but no thanks.”

After the Seattle-based company announced New York as one of its HQ2 lottery winners, the city gave it the bum’s rush. A coalition of urban planners, labor organizers, politicians, neighborhood activists, economists, lawyers and tax experts convinced the world’s biggest retailer to fold up its tent and leave.

As The New York Times put it, “Amazon can deliver toothpaste in traffic-snarled Manhattan on the same day an order is placed. But when it came to navigating the politics of New York, the company appeared out of step, a giant stumbling onto a political stage that – despite its data-driven success – it never fully understood.”

Drexit.

Mickey Drexler resigned his chairmanship at New York-based J.Crew Group in January after 16 years with the specialty retailer. At J.Crew, he never quite repeated his success at Gap Inc., where as president and CEO from 1983 to 2001, the “merchant prince” built the Gap brand, founded Old Navy and rebranded Banana Republic. But he did enlarge the J.Crew footprint and launched the (currently more successful) Madewell brand.

While at J.Crew, Drexler also served on the board of Apple, where he participated in the hiring of Burberry CEO Angela Ahrendts as Apple’s head of retail in 2014. She, too, moved on this year, leaving Apple in April. She said she “missed fashion,” which perhaps explains why the following month she joined the board of Airbnb.

West Side Story.

Hudson Yards, the $25 billion development that runs along Manhattan’s Hudson River from the Lincoln Tunnel to 26th Street, opened to the public in March. Hailed as the ultimate mall of the 21st century, it’s one million square feet of mixed-use – urban parkland, office and residential, stunning architecture and retail elegance.

Developers devoted a full floor of retail space to previously Internet-only brands. It also houses the very first Manhattan location for Neiman Marcus, which opened with an extravagantly fresh concept.

Somehow, though, the long-awaited “Neiman’s-in-New-York” story feels less-impactful than it would have been 10 or 15 years ago. A little like the Union forces that captured the Confederate town after the war was over.

Sad Good-byes.

Sears (Hoffman Estates, Ill.) announced it would close almost all of its doors in 2019 and 2020, putting an end to retail’s version of “The Walking Dead.” The country’s largest retailer in the 1960s and ’70s never updated its game (except briefly in the ’90s) to accommodate modern consumer needs, changing lifestyles and population movements.

But Sears was not the only national brand to exit the stage this year. ShopKo filed for Chapter 11 bankruptcy protection in January, closing all 363 stores. Gymboree also filed in January, closing all Gymboree and Crazy 8 stores. In February, Charlotte Russe (which has since been acquired and announced it will open 100 stores in the U.S.) and Payless Shoe Source filed. Diesel USA and Z Gallery filed in March. And Forever 21 plummeted from the fast-fashion heights in September, shuttering hundreds of stores worldwide and in the U.S.

Off Fifth.

Hudson’s Bay Co. (Toronto) announced the closing of several Lord & Taylor stores, but the most emotional was the Fifth Avenue flagship in New York, a 105-year-old retail legend. Generations shopped there for New York elegance and visited the store’s memorable Christmas windows.

Adding to the insult, WeWork, the innovative real estate management company that bought and occupied most of the 11-story building with promises of a new approach to shared workspaces for tech startups, went from an IPO seeking a $47 billion evaluation to a victim of collapsing valuation and Wall Street’s rejection of its prodigal founder – now Blanche Dubois, its future depending on “the kindness of strangers.”

Fashion Weak.

Barneys New York, which reinvented men’s fashion in the 1960s and dominated luxury specialty retailing in the decades since, declared bankruptcy yet again in August and was ultimately dismembered and sold for parts from a courthouse in Poughkeepsie, N.Y.

The brand will survive, licensed to other luxury retailers. But the seven remaining Barneys stores were liquidated.

There was thought that some party would step in to save the company. But it would have required paying the current annual rent on Madison Avenue of almost $30 million, twice the 2018 ante. Too expensive, even for a Barneys shopper.

Amazon Goes to Cash.

The heralded “cashless” approach to shopping, mostly driven by Amazon Go, took a step back this year. Amazon’s latest Go store opened in New York in May announcing it would accept cash payments, partly because New York was considering banning the cashless concept. (Philadelphia and the state of New Jersey have already banned cashless stores. San Francisco and Washington, D.C., have been mulling the matter. The state of Massachusetts has long required businesses to accept cash.)

The reasoning was that cashless shopping was regarded as discriminatory and elitist, serving those with app-loaded smartphones but underserving those low-income “underbanked” shoppers who tend to buy with cash.

Amazon matter-of-factly explained that, “paying cash at Amazon Go will work as you would expect: You’ll check out, pay with cash, and then get your change.” But will it undermine the whole concept of frictionless shopping? Amazon hasn’t provided an answer for that.

Check Your Guns at the Door.

In September, days after a gunman allegedly murdered 22 people in its parking lot in El Paso, Texas, Walmart (Bentonville, Ark.) announced it will reduce its gun and ammunition sales and pressured Congress to enact gun safety measures.

The retail behemoth said it will stop selling handgun ammunition and “short-barrel rifle ammunition” that can also be used with assault-style weapons. And it will request that customers no longer openly carry guns into its stores in states that allow open carry.

On the heels of that, CVS Health and Walgreens both requested that their customers not bring firearms into their stores, regardless of state open-carry laws. And Wegmans, the upstate New York supermarket retailer, stated on Twitter, “The sight of someone with a gun can be alarming, and we don’t want anyone to feel that way at Wegmans.”

In today’s turbulent world, retail and otherwise, those seem decent-enough sentiments to use as a branding statement. 

[Illustrations by Don Heyl, Cincinnati]