Tuesday, May 27, 2014

Positive Feedback Loops at Distressed Clothing Retailers

A correspondent writes to followup on the story about poor merchandising at the Mall of America Sears store,

"Stores that sell clothing have the special problem that their merchandise comes in a large range of individually-different sizes. That means they have to constantly sort stacks or racks of clothing into neat categories so customers can find their own sizes. If cost-cutting leaves too few store clerks to tidy up after customers, it quickly becomes very difficult or impossible for customers to find their sizes. So they stop coming in.

Untidy piles of clothing are a sign of a bankruptcy feedback loop. Watch for these in clothing stores."


Anonymous said...

DSW is down over 27% right now.


What others stores are listed but are being overrun by new ecommerce challengers (such as Zappos in DSW's case) ?

CP said...