The retail world is littered with doom and gloom stories. It seems like every week there’s another retailer that has to close its stores or file for bankruptcy. But every so often, we get a feel-good story from a merchant that bounced back from the brink of extinction.
This article will be about those companies — the retailers that have made amazing comebacks and have managed to thrive despite the odds.
We’ll explore the issues that each retailer faced and examine the steps they took to rebuild and take back market share. Read through each story below and see if you can apply any of the following comeback strategies to your business.
Kohl’s was a powerhouse throughout the 1990s and the mid-2000s. Its locations were smaller than traditional department stores like Macy’s but packed a strong punch thanks to its “value-oriented” shopping experience that gave customers access to great merchandise at reasonable prices.
The company expanded into the new millennium, opening over 150 stores from the year 2000 to 2008. But the tide started to turn right after the recession. Kohl’s was too busy opening new stores that it followed its “cookie-cutter” formula that failed to evolve along with modern shoppers.
Kohl’s also didn’t get into the ecommerce game early, and off-price retailers like TJ Maxx started to overtake the retailer. The company went through a slump from late 2008 to 2015, experiencing little to no growth and struggling to drive traffic to its stores.
The comeback: Things started to turn around for Kohl’s in 2015, when it strengthened its digital capabilities. The company fully integrated its online and offline stores to give shoppers an omnichannel experience, and it launched Kohl’s Pay, which let customers pay for purchases and apply any savings or offers using their mobile device.
In 2017, Kohl’s began selling Amazon gadgets and started accepting Amazon returns at some of its locations. The partnership proved to be successful, and in 2019, the department store started accepting Amazon returns in all of its stores.
All these efforts seem to be paying off. Kohl’s stock has risen at a respectable rate since its lows in 2008, and the company has seen growth in sales and store visits over the past two years. In 2019, Insider reported that store visits to Kohl’s grew by almost 24% after it started accepting Amazon returns. And while a lot of those visits were considered “micro” visits (lasting less than 5 minutes), visits that lasted more than 16 minutes grew by 14%.
Kohl’s willingness to embrace technology (and Amazon) certainly helped the company regain its footing. Many retailers can learn from Kohl’s example by exploring partnerships and opportunities to leverage the power of digital retail.
Levi Strauss & Co.
Levi Strauss is one of the world’s oldest and most iconic retailers. Launched in 1853, the company pioneered the blue jean and its products became a staple in American closets — at least, in the early days.
But there came a period where the denim company wasn’t looking too good. As the Harvard Business Review points out, Levi Strauss’s revenues “peaked at $7 billion in 1997” and the didn’t rise above $4.5 billion from 2001 to 2010. Levi’s (along with other players in the denim category) also saw their business decline for four straight years from 2014 because of the rise of athleisure.
The comeback: Fortunately, things are looking up. In 2015, Levi Strauss adapted to the athleisure trend by adding stretch and performance features to its jeans. It introduced four-way stretch denim fabric, which offered women both style and comfort while wearing jeans. Female shoppers took notice, and the move led to 14 consecutive quarters of growth for Levi’s women’s category.
In addition, Levi’s put a bigger focus on tops, and this effort paid off tremendously. According to Forbes, last year, revenue from its tops category grew $1.1 billion (a 38% increase).
Levi Strauss also started putting technology to good use. In 2018, the company created Indigo, an AI-powered chatbot that helps shoppers find their perfect fit. This contributed to double-digit growth for Levi Strauss’ direct-to-consumer business.
It’s important to note that amidst all of its investments in digital and ecommerce, Levi’s never lost sight of its physical stores. The retailer doubled down on the in-store experience by launching innovations and initiatives like direct-to-garment printing, large-format immersive LED screens, and mobile POS systems. Levi’s also armed its associates with AI tools that enabled them to serve shoppers better and provide personalized experiences.
The results of all these efforts have been impressive, to say the least. In 2018, Levi Strauss reported net revenues of $5.6 billion and 14% year-over-year growth.
The takeaway? Keep your business adaptable to the changing times. You may encounter a period in which consumers prefer alternative products over yours. In such situations, it helps to rework your offerings and innovate to win back your customers.
There was a point when American Apparel seemed unstoppable. First launched in 2003, the brand quickly grew to over 140 locations in multiple countries. By 2009, American Apparel had more than 281 stores.
But that success tapered off after 2009, as fast fashion companies like Forever 21 started capturing market share. What’s more, opening too many stores proved to be an ineffective strategy for the company because the locations failed to differentiate themselves from one another. As one analyst told the Los Angeles Times, “It was the same thing over and over again.”
American Apparel also grappled with immigration issues after an audit revealed “questionable employee documents” from more than 1,500 of its skilled workers. That, coupled with backlash from its racy ads, was too much for the company. American Apparel filed for bankruptcy twice — first in October 2015 and again in November 2016.
The comeback: American Apparel no longer has physical stores, but the brand is still alive. After being sold to the Canadian apparel company Gildan Activewear, American Apparel relaunched an online store in 2018.
Rather than oversexualized ads that made some women feel unsafe, American Apparel’s site featured more messages of empowerment, showcasing un-retouched models that still managed to look sexy without being racy.
American Apparel also cut down on its inventory. The company took stock of its merchandise and identified the items that resonated with its core customer — which included basics like T-shirts, tank tops, and bodysuits. It got rid of specialty items and went back to the basics the made it famous in the first place.
It’s too early to tell if American Apparel will be 100% successful going forward, but its efforts are promising. One thing retailers can learn is to not be afraid to shift your brand. American Apparel’s image had become toxic and the fact the company learned to pivot its branding is commendable.
First launched in the 1960s, Vans surged in popularity in the 80s and 90s, but the company saw a decline towards the 2000s when skateboard participation decreased. What’s more, the rise of much larger competitors like Nike and Adidas stunted its growth.
The comeback: But that’s all starting to change. In 2018, Vans officially became cool again. Sales rose 34% in Q2 last year, and big names including Ryan Reynolds, Kanye West, and Justin Bieber were seen sporting a pair of Vans.
The brand’s resurgence is driven by two main trends: athleisure and the revival of retro styles. People have grown accustomed to wearing activewear throughout their day (i.e., not just when they’re exercising) and Vans’ classic and versatile look makes it easy to pair with anything.
Teens have also come to love the brand. Piper Jaffray’s 2018 “Taking Stock With Teens” survey found that Vans is the second most popular brand of footwear among teens, just behind Nike. In terms of popularity, Vans is the fastest growing brand in the survey, and the company’s clout among teens has grown 800 basis points year-over-year.
Part of that success lies in the authenticity of the brand. Vans has always stayed true to its roots in skate, art, and music, and it hasn’t deviated from that the slightest. Modern consumers love authentic branding, and that’s likely one of the reasons why today’s young shoppers are drawn to Vans.
Vans’ story reminds us of the power of authenticity. Remaining true to your roots will pay off, as long as you offer a healthy balance between classic and trendy. Speaking of which, certain trends (in this case athleisure and retro) can also breathe new life into a brand, so it’s important to find ways to adapt.
Abercrombie & Fitch
Abercrombie & Fitch peaked in the early 1990s, when Michael Jeffries was brought on as CEO in 1992. Jeffries was responsible for giving A&F its casual and preppy image. The brand’s racy tactics — including the use of scantily dressed models in its catalogs and outside its stores — were implemented under his leadership.
The efforts worked… for a while. The brand’s popularity and footprint soared during this time, and it opened thousands of stores in this period.
But trouble also started brewing. For starters, Jeffries became notorious for his exclusionary remarks. In 2006, he was famously quoted for saying that they only hire “good-looking people” and target “cool kids.”
He told Salon:
Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely.
To make things worse, Abercrombie & Fitch was hit by a lawsuit in 2013 for discriminating against hiring African American, Latino, and Asian American applicants. A&F settled the lawsuit for $40 million and agreed to change its hiring practices.
These things didn’t help A&F and by 2014, the company experienced 11 straight quarters of same-store sales declines. Jeffries was out and Abercrombie & Fitch scrambled to get back on its feet.
The comeback: The road to recovery involved an overhaul of Abercrombie’s image and stores. The company implemented a variety of initiatives to position itself as a more welcoming and inclusive brand. Some of those efforts included replacing sexualized ads with wholesome images. The company also stopped having shirtless models outside its stores.
Speaking of stores, Abercrombie pruned and remodeled its locations. It made its stores brighter and warmer in order to promote a more welcoming look and feel.
All that work is paying off. As of late 2018, A&F’s shares were up 25% and overall same-store sales grew 3%.
Much like American Apparel, A&F’s comeback can be attributed to the fact that it was willing to overhaul its image and adapt to the market. People were calling for more inclusive and empowering brands, and Abercrombie rose up to occasion successfully.
The Bottom Line
It’s not easy to make a retail comeback, particularly in the apparel space. Competition is steep, trends are fleeting, and more than ever, consumers are increasingly conscious of where they spend their money.
The key to success lies in your adaptability. Whether it’s embracing new technology, shedding an old image, or reworking your offerings for the latest trends, your survival depends on how well you roll with the changes in the market.
Need help doing that? CB4 helps apparel-sellers rise to the increasingly complex demands of shoppers in their stores. Learn more here.