Kenneth Cole Just Shut Down 63 Stores… Should You Be Following In Their Footsteps?
Last week, it was reported that retailer Kenneth Cole will be shuttering nearly all of their stores. Over the next six months, a total of 63 outlet stores will close across the U.S., leaving just two full-priced stores open. As Bloomberg points out, this effectively ends the decades-old retailer’s long-standing run as an American brick and mortar retailer.
However, consumers won’t be seeing the last of the fashion house’s classic wares. Kenneth Cole will be putting all of their efforts into e-commerce and international sales, and will continue to sell wholesale to other retailers in-store and online. “As we continue on our path of strengthening our global lifestyle brand, we look to expand our online and full-price retail footprint across the globe,” says CEO Marc Schneider. “We need to focus our energies and resources to better serve the consumer on their terms.”
The Perks of being wholesaler
In an increasingly competitive retail landscape, companies are shutting down physical stores in favor of e-commerce. Kenneth Cole’s decision is inline with many other companies’ efforts to keep up with today’s omnichannel consumer. The wholesale structure allows you to sell to your consumers with none of the costs associated with keeping up a physical store, or having to market your product out to consumers. As a wholesaler, your main responsibility becomes shipping your product to a third-party retailer for them to sell on your behalf. And while the thought of being placed in a store amongst similar brands may feel like the potential cannibalizing of your brand, realistically, being placed amongst like-brands may in fact boost awareness amongst consumers who may not know your product in the first place.
A downside to every situation
Of course, as we’ve seen happen before, there are always potential downsides to relinquishing the control that comes with having your own brick and mortar store to sell from. The absence of your own store could mean a lack of dedicated staff who are happy to educate consumers on your product and your product alone. In this scenario, while you definitely have a say, you do also lose control over what a retailer prices your product at, or even 100 percent control over your product’s image. Additionally, while many of your overhead costs will go down, you still need to make sure to carry enough stock for your retailers to sell. Of course, many of these issues can be mitigated by having a strong, trusting relationship with your retailers.
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