Nordstrom Rack now sells Rent the Runway apparel, a prime example of why this sector is poised to have yet another good year.
RetailDive.com, Daphne Howland, Jan. 28, 2020
Apparel retail has never been for the faint-hearted, and today the segment has retailers by their throats. Customers don’t want to pay full price for apparel and few need dressy clothes. These casual and budget-minded shoppers are more likely to take fashion cues from Instagram than from designers. That leaves a vast wasteland of specialty retailers to fritter time on efforts that keep missing the mark, so the business is now more cutthroat than ever.
By the end of 2019, 10 of the 16 major retail bankruptcies were filed by companies that mostly or exclusively sold apparel and/or footwear: Forever 21, Avenue, A’gaci, Barneys New York, Charming Charlie, Diesel USA, Payless ShoeSource, FullBeauty Brands, Charlotte Russe and Gymboree. Several others not in (or, apparently, near) bankruptcy have also announced closures. Among them, Express tagged 100 stores to shutter by 2022, Macy’s is closing 29 locations this year, Gap last year announced 230 namesake stores would close, and teen retailers American Eagle and Abercrombie & Fitch are both right-sizing their footprints.
Moreover, apparel rental options from Rent the Runway, Urban Outfitters’ Nuuly and Le Tote are also “taking away from apparel buying,” Roxanne Meyer, managing director at MKM Partners, told Retail Dive in an interview. “It’s a substitute.”
And then, there’s off-price. The model seems to endure no matter what — attracting shoppers of all ages and incomes, in all kinds of economies. It’s particularly attractive in an era when the middle class is challenged, experts say.