We’ve heard about pureplay e-tailers adding stores to maximise omnichannel opportunities. And we’ve heard about physical retailers boosting their online ops. But it’s rare that we hear about brands going pureplay, outside of a few tiny indies who’ve realised that trying to make a little store on a local high street pay is madness when the world is out there for an online business.
But now there’s Kenneth Cole. That’s a big name, has been for nearly 30 years, and the fact that it’s closing almost all of its US stores to go virtually online-only is a seismic shift.
The company has already cut back full-price stores and and will now close its 63 outlet stores. It will will keep just two full-price stores open. Apart from that it will still wholesale to other physical retailers and will have a physical presence outside the US, but its main company-owned ops will be online.
CEO Marc Schneider said “we need to focus our energies and resources to better serve the consumer on their terms.” And the customer’s terms, it seems, are that online is where it needs to be.
OK, my opening paragraph may have been a bit misleading. It’s clear from all this that it’s not turning itself into a pureplay e-tailer. But if you had to define the company in the future it would mainly be as an online brand.
And this move is certainly one of the most extreme examples of a trend that has been playing out globally in recent years as retailers realise that a large store estate just isn’t working for them in an increasingly online world. The M&S announcement of store closures last week was part of the same trend.
Kenneth Cole has already been relying less on its own stores, focusing on just two (in New York and Arlington, Virginia), ramping up wholesale and striking licensing deals that remove it from the physical sphere even more. Licensing has its own challenges, of course, and relying on wholesale can hit margins, as SuperGroup highlighted last week.
But I bet this won’t be the last such announcement. Anyone want to take a bet on who’ll be next?