Why is it so much fun to discuss old retailers? And why do malls sometimes stoke feelings of nostalgia?
Once the center of a community, the experience of going to a mall has changed considerably over the past few decades. Department stores were once referred to as anchors for a reason — they drew traffic and acted as a focal point for commerce, while an array of specialty stores filled in the gaps and added elements of surprise and delight.
"The mall — it was a destination. It was a place for activity. It was a gathering point for the community, it was a bringing together of people," Deb Gabor, CEO of Sol Marketing, said in an interview. "It really was all-encompassing. You would walk through the door of the mall, and you had sights and sounds and smells. Things to eat and things to touch and people to see."
That was the mall of a certain era, as the perception and functionality of the space has changed over the years.
Yet, there is still a certain sense of sentimentality over the memory of the mall experience — especially from the mid-'80s to the early 2000s. Mention the name of past retailers and people start to chuckle, or say, "Oh I forgot about that store!" and tell you stories about their experiences.
Just ask writer, filmmaker and musician Michael Galinsky. In 1989 as a sophomore at New York University, he decided to make malls the focus of a photography class project. He later traveled across the United States to visit 15 different malls and take photos of the sights and people he encountered. It wasn't until 2010 that he rediscovered those images, digitized them and put them online. Those photos went viral, and ended up being the subject of his books "Malls Across America" and "The Decline of Mall Civilization."
"These things become central to your early adulthood or late adolescence," Galinsky said as to why people have had such a strong reaction to his mall photos. And part of that has to do with a finite experience, because many retailers only existed in that very specific mall setting, he said.
And memories of the mall can lead to strong affinity to certain retail brands, according to Gabor. Brands were able to create a comprehensive relationship with shoppers through the "sights, smells, feelings, ideas, even the kind of music they played in the store," she said. "When brands are comprehensively experiential I think that they lodge themselves in our psyche. When people have really strong memories about retail brands, it's because it's gone so far beyond the product that those retail establishments were designed to sell."
While the advent of e-commerce swooped in and took away some of the need to travel to a central establishment to shop, there is something about those past mall experiences that still looms large. "I don't think that anyone has cracked the code to be able to create that 360-degree environment that engages all of your senses at one time," Gabor said regarding online shopping. "Like you can't smell the [purchase] button on Amazon."
Here's a look back at what happened to seven retailers that once were important players to the mall experience.
1. KB Toys
Originally launched in 1922 as a wholesale candy business, KB Toys eventually became the second largest toy retailer in the United States behind competitor Toys R Us. At its height, its footprint spanned around 1,300 mall-based stores.
Consolidated Stores Corporation, which at the time owned closeout stores like Odd Lots, Pic N Save and Big Lots Furniture, purchased the company in 1996 and then sold it to Bain Capital in 2000 for $305 million. Bain was accused by unsecured creditors of draining money from the retailer in a dividend recapitalization deal, a complaint the private equity company denied.
The toy company filed for bankruptcy in 2004 and shut about half of its stores. An affiliate of Prentice Capital Management — the company that bought KB Toys out of bankruptcy — invested $20 million in the company and extended a $25 million line of credit. But, the retailer ultimately returned to Chapter 11 in 2008. The following year, Toys R Us acquired KB Toys' intellectual property.
2. Merry Go Round
If you were looking for trendy teen attire, you probably stopped by Merry Go Round. Founded in 1968 as a blue jeans store, the company grew to sell apparel in a number of categories, including prom gowns and even went public in 1983. But, the company missed a number of fashion trends in the early '90s as it aggressively expanded its footprint, partially through the acquisition of men's clothing store Chess King in 1993. Merry Go Round filed for bankruptcy in 1994, and by 1996 began shutting down all of its stores.
3. Gadzooks
by Retail Rewind, Sept. 26, 2021.
Based in Dallas, the specialty retailer opened its first store in 1983 and was known for its casual clothing, accessories, and shoes for men and women. It was also known for placing a Volkswagen Beetle in every store to fit with the late-'60s vibe and carried brands like Dr. Martens, XOXO and Calvin Klein.
In about six years, the company more than doubled its store footprint from 183 to over 400, and ultimately moved its focus solely to women's apparel.
The company filed for bankruptcy three years after its rapid store expansion. At the time of the filing, CEO Jerry Szczepanski said, "We regret that this action was necessary after so many years of successful results, but our transition to an all-girl format now requires us to concentrate our resources on the continuing improvement of our concept."
Then, in February 2005, Gadzooks announced that it was being acquired by Forever 21, which included all of its operating assets and its 243 stores. At the time of the deal, Forever 21 was achieving $640 million in annual sales.
4. The Limited
Mall retailer The Limited helped define casual fashion and workwear in the '80s and '90s.
The retailer was the brainchild of Les Wexner of L Brands fame, who founded the company in 1963, and even sold apparel at the first Limited store. By the mid-1990s the company had over 700 locations and spinoffs: Express and Limited Too. It also had sister brands in Abercrombie & Fitch, Lerner New York and Lane Bryant.
The Limited's offerings changed over the years as Wexner shifted focus and eventually sold off some of his brands. By 2007, The Limited was sold to Sun Capital, who invested $50 million and arranged a $75 million credit facility. A decade later the company would close all of its stores and move online. That same year The Limited became an exclusive apparel line to Belk department stores.
5. Sharper Image
There was always a chance you could entice a friend or family member to go to the mall by promising to stop by Sharper Image. (It was always about those massage chairs, right?)
Founded in 1977, the retailer was known for its weird and fun collection of gadgets, especially its Ionic Breeze air purifier. In 2008 the company filed for Chapter 11 bankruptcy and liquidated its 180-plus store footprint after sales slipped. In an interview with Inc., founder Richard Thalheimer explained that Apple started taking over as the cool place to try out tech in the mall. "We were lulled into a period of complacency because of the success of the Ionic Breeze," he told the publication.
The company relaunched in 2010, and its website and Sharper Image catalog — both of which are still around — are owned and operated by private equity firm Camelot Venture Group. In a separate deal, ThreeSixty Group bought the rights to make branded products under the Sharper Image name for $100 million in 2016, which can be found in Target, Macy's, Bed Bath & Beyond, and at its website and catalog.
6. Sam Goody
What better way to hang out at a mall than to look through a bunch of albums? Or make that tapes? Or make that CDs?
Sam Goody was a staple of mall life for decades. Founded in 1951 by Sam "Goody" Gutowitz, the original location was a record store in New York City. Much of Gutowitz's sales were done via mail order catalog for discount prices. Gutowitz later established a chain of record stores, but in 1959 creditors took over the company as a means to collect $2.4 million in debt.
Over the next few decades the company changed hands, and eventually was acquired by The Musicland Group. In the early 2000s, Best Buy purchased Musicland for nearly $700 million, only to sell it a few years later to private equity firm Sun Capital Partners. The company filed for bankruptcy in 2006 and has since closed most of its stores, though two still exist.
7. Wet Seal
Teen retailer Wet Seal was launched in 1962 by founder Lorne Huycke and was known for its trendy, Southern California apparel.
By the mid-'90s the retailer purchased Contempo Casuals for $1 million in stock from Neiman Marcus Group. In 1998, the company launched the Arden B brand.
In 2014, Wet Seal announced that it was closing its Arden B brand, which, at the time, operated 54 mall-based stores. Those locations transitioned to Wet Seal and Wet Seal Plus stores.
"We are making progress against our strategic plan to enhance Wet Seal's product, merchandising, customer engagement and overall store performance, as well as drive growth in our e-commerce business," CEO John Goodman said in a statement at the time. "Importantly, our transition strategy for Arden B accelerates our opportunity to expand in the growing junior plus market."
By 2015, the retailer had lost over $150 million in the two years prior and defaulted on $27 million in senior convertible notes. That same year the retailer closed a majority of its stores and within weeks filed for Chapter 11 bankruptcy protection. Within three months, private equity firm Versa Capital Management acquired the company for $7.5 million in cash for unsecured creditors and $10 million in exit financing, as well as an agreement to take over a $20 million bankruptcy financing commitment from B. Riley and pay a $625,000 breakup fee.
The tide turned again in 2017 for the retailer when it filed for bankruptcy for the second time in only 25 months. Another company, Gordon Brothers, bought it with a $3 million bid at its bankruptcy auction.
The retailer currently has an online operation, but doesn't operate any physical stores.
via https://www.aiupnow.com
Kaarin Vembar, Khareem Sudlow
