Struggles At Neiman Marcus May Portend Beginning Of The End For Full-Price Retail
For the last two decades the retail landscape has been transforming thanks to the steady assault of discounters on the mainstream, middle-market retailers. Retailers like Walmart, Target, Kohl’s, Stein Mart, Marshalls and Ross have been gaining market share at the expense of higher-priced, mass market stores like Macy’s, J.C. Penney, Dillard’s, and Belk. The basic trend most retail analysts agreed on was that the discounters were killing the middle of the retail world. People expected a future with only high-end retailers selling higher quality and unique goods at high prices and the discounters selling mass produced goods at the lowest possible prices. The middle is still dying; however, the theory that the high-end retailers would survive is suddenly looking less certain. As Suzanne Kapner and Ryan Dezember recently reported in the Wall Street Journal, Neiman Marcus, the highest of high-end department stores, is now struggling as even its wealthy shoppers are discovering the benefits of and possibilities for discount shopping, both online and in stores. As Steven Dennis has written here at Forbes.com, similar struggles are affecting high-end specialty stores such as Tiffany, Kors, Saks and Nordstrom. The days of strong pricing power that allowed for continual revenue growth at luxury retailers appear to be over. Two things are driving this expansion of the dominance of retail discounters. First, luxury retailers became less appealing to consumers as they expanded their sales to the middle class. Second, the internet is giving even price-insensitive shoppers alternatives for unique, high-quality goods. Read more at Forbes.
