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Retail Rebounds

by 
Ethan Chernofsky
 on 
March 12, 2020
Retail Rebounds

In the midst of widespread closures, there are many brands that are still growing with companies like Nike and Lululemon. Yet, most of these names are not retailers on the rebound, but brands on the rise.

So, it came as especially exciting news when Foot Locker and Bath & Body Works both announced significant store expansions. Though Foot Locker was focused on one specific format while closing older stores, the push to reinvent and remodel is significant. 

With a growing number of legacy retailers looking for ways to return to glory, the success or failure of these pushes will go a long way to determining the look and feel of the next decade of retail. 

Working Bath and Body in Outdoor Malls

Looking at Bath & Body Works data from the start of 2017 through January 2019 shows a very interesting story. The brand saw a significant 26.6% decline from 2017 to 2018, followed by a year-over-year decline of 13.6% between 2018 and 2019.

But, the brand looks to be in the midst of a strong rebound. November 2019 visits were 14.1% above the baseline for the period from January 2017 through January 2020, a major increase compared to visits that were 7.8% above in November 2019. While December visits were essentially flat year-over-year, January visits were 21.8% higher this year, than the same month in 2019.

Does this mean the change is bound to succeed? No. 

But Bath & Body Works is not just expanding stores, they are expanding with a heavy emphasis on outdoor malls, something far different from its traditional strategy. From identifying new and potentially more ideal partners to sit near to finding more ideal locations, the move offers a lot of promise. When looking at apparel retailers only, some of the highest levels of cross shopping come with non-indoor mall brands like Kohl’s, Marshalls, Dick’s Sporting Goods and Ross. This indicates a new potential ceiling for the company by meeting segments of its audience in places they are more likely to regularly visit. 

Considering the already rebounding visit trajectory, there may be method to this apparent expansion madness.

Foot Locker on the Rise

Not normally thought of within the rise of athleisure industry, Foot Locker is riding a new, more focused strategy to significantly increase offline gains. Although the brand still has plans to close many stores, foot traffic has been on the rebound.  While visits were essentially flat between 2017 and 2018 with a 1.8% decline, the brand saw 18.9% visit growth in 2019. This included a spring and summer period that outperformed the same months in 2018 by a significant margin. Visits in August 2019 were 37.4% above the baseline for the period January 2017 through January 2020, well above 2018’s 11.3% rise. 

This strength continued into the holidays when visits were 7.9% above the baseline in November 2019, compared to 9.0% below in 2018. With a shorter holiday season, in-store visits were essentially flat with a minor decrease, but January 2020 visits were back on the growth trend. January visits were 7.6% below the baseline for the period, compared to 10.7% below the previous year. 

The growth speaks to a rejuvenated brand that is focusing more on local audiences and less on copy-and-paste store formats. This type of targeted approach appears to be paying dividends, so it is no surprise that the brand is expected to roll out additional store formats in the coming year.

Rebound Recipe?

While the ongoing success of these brands plays a critical role in determining their future, there is much to be said for the excitement being generated around these strategies. Outdoor malls, localized approaches to merchandising and store design are key trends to monitor for the coming years. 

If rebounds for brands like Bath & Body Works and Foot Locker prove sustainable, expect many others to test similar approaches.

How will the moves pay off in the long term? Visit Placer.ai to find out.

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