MALLS

Haters Will Say the Lines Are Photoshopped

Teens are loitering outside Hollister. Shoppers are driving home reeking of Auntie Anne’s pretzels. Are malls finally healing?

Let’s check the directory

The megamalls that starred in Retail Brews past have mostly reopened, with vacancies where recently bankrupt tenants used to be. Here’s a sample:

American Dream welcomed shoppers back on Thursday, months after its retail stores had originally opened in March following several delays. 

• A few dozen of its 300 storefronts opened, including Zara, H&M, and American Eagle; the anchor store where a Barneys New York was supposed to be is empty. 
• The attractions that put American Dream in parents’ nightmares—water park, ski slope, Nickelodeon rides—are operating at limited capacity. 

Hudson Yards reopened on September 9 with most of its tenants but without many shoppers. In the weeks since, it’s tried to lure them back with cutting-edge safety features like...QR codes.

Mall of America returned from pandemic leave in June, with 150 of 500 stores operating. Without the 150,000 daily visitors who crowded Mall of America’s four stories pre-pandemic, the shopping center laid off 211 workers last month and furloughed another 178.

What really counts

Walking groups had malls to themselves for months, but shoppers are slowly returning. 

• In a September 15 Coresight Research survey, 53% of consumers said they were still avoiding shopping centers—the lowest ghosting rate since July. 
• Visits to indoor shopping centers are ticking up by Placer.ai’s count, but they’re still 37% below 2019’s baseline. 

Another problem: Megamalls’ finances. 1.5 mile waterslides are expensive without riders (or rent) to pay them off. Triple Five Group, owner of Mall of America and American Dream, is 90+ days late on a mortgage payment for MoA...and it used the property as collateral for American Dream loans. 

• Still, Triple Five Group is plowing forward with plans to develop its largest center yet in Miami.

Bottom line: Select mall photos aren’t telling the whole story. The shoppers who want their Build-A-Bear fix will find fewer stores and eventually fewer centers altogether. According to real estate firm Reis, U.S. mall vacancies hit 9.8% in September—a record high. One-third of all malls are expected to close by 2021.

RESALE

Gucci Has Nothing to Hide

Most luxury brands only acknowledge resale sites when they’re accused of peddling fakes. Then there’s Gucci, which today launched a curated online resale shop through The RealReal.

• Around 2,000 Gucci items will be carried in the store, with new items added daily.
• Some inventory will come directly from Gucci, while other items will be uploaded by TRR consignors. 

The context: Resale sites thrived this year as luxury brands explored a covert channel to offload extra inventory. 

• TRR told Retail Brew that brand interest in the site has increased 22x during the Covid-19 pandemic. 
• Items consigned directly by brands have risen 46%. 

The difference? Most luxury brands swear resellers to secrecy; Gucci is shouting its consignment partnership from the rooftops. That matters for the highest-scoring luxury label on the Fashion Transparency Index: Resale is a more eco-friendly way to shop, but few luxury brands openly condone it. 

Brands that argue resale diminishes their value should simply try making better products. Since 2012, Gucci has been one of TRR’s top three brands for maintaining its resale value—2.3x stronger than the average.

SPONSORED BY LISTRAK

These 1,000+ Retailers Are Certified Geniuses

What makes them all such brainiacs? They’re growing their revenue and digital marketing channels with Listrak—and seeing the power of integrating email, SMS, and behavioral triggers on one platform.

Listrak is the digital marketing automation platform trusted by 1,000+ leading brands, and now they’re sharing the secret to driving incremental revenue.

It’s called the Revenue Gap Index (RGI)—an analysis that pinpoints gaps in email/cross-channel marketing programs.

Still need convincing? Brands like 7 For All Mankind, Jonathan Adler, and Tula Skincare have all seen dramatic gains thanks to Listrak’s RGI.

So if you’re ready to join the ranks of retail’s best and brightest, check out Listrak’s Revenue Gap Index.

Get the insights trusted by retail marketing experts right here.

RECAP

Shifting Closet Share

These days, I can imagine a world where jeans go the way of landlines and camcorders. But some experts say hope isn’t entirely lost for denim in a sweatpants economy.

In last week’s Retail Brew event, Sucharita Kodali (Forrester Research VP and principal analyst) and Nate Checketts (CEO and co-founder of Rhone) pointed out strategies that struggling brands can adopt to survive another season. 

• Try new services. Checketts said Rhone has implemented appointment shopping in reopened stores; Kodali said brands should leverage curbside pickup. 
• Join online marketplaces. Kodali spotlighted Oscar de la Renta as an example: It may have been “unprecedented” for the luxury brand to join Amazon, but it opened up new audiences. 
• Expand to new categories—where it makes sense. “Just because you made luggage before doesn’t mean your customer is going to trust you to make clothing,” Checketts said.

When the pandemic ends, “the demand for clothing that declined over the past few months will resume,” Kodali said. “The question is, who are going to be the providers of those goods?” 

To find out...you’ve got two options: read the full event recap, or watch the panel on YouTube.

WHAT ELSE IS BREWING

• Instagram will integrate shopping features into Reels and IGTV.
• ThredUP will resell items previously available to borrow on Rent the Runway. 
• Macy’s plans to open more stores in its off-price chain, Back Stage.
• Bolt Threads partnered with Adidas, Lululemon, and Stella McCartney on leather-like material made from mushrooms.

HOT TOPIC

At the mall, it’s where band tees are in infinite supply. In Retail Brew, it’s where I cover a recent retail conversation and ask you to weigh in. 

Last week, sibling personal care brands Hims & Hers shared plans to go public through a merger with Oaktree Acquisitions Corp., a special purpose acquisition company (SPAC).

• Here’s a general explainer on how going public via SPAC works across industries.
• And here’s more info on Hims’s SPAC with insight from CEO Andrew Dudum.

Get up to speed, then let me know: Which DTC brands are best positioned to go public after Hims & Hers? Should all future retail listings go the SPAC route? 

The inbox is open for discussion.

SWAPPING SKUS

A lot has changed in the world of restaurants since March. Here are two reads on the murky past and uncertain future of bread for the table. 

Throwback: Drive-thru legend has it that some fast food franchises—Wendy’s, Taco Bell, McDonald’s—once served burgers and tacos buffet style. The weird and wacky history of fast food buffets is shorter than this paragraph. (Eater)

Present day: Indoor dining is (kinda, sorta) returning to NYC. It’s a “high-stakes, citywide experiment” for restaurant owners, and not everyone’s ready to reopen inside. (Grubstreet)

ICYMI

Catch up on the Retail Brew stories you may have missed. 

• How Bed Bath & Beyond Reversed Its Four-Year Slump
• Small Businesses Say No to BFCM
• Stitch Fix and Harlem’s Fashion Row Partner on New Grant