The changing face of retail
Is there a brick-and-mortar retail apocalypse upon us?

By Dave Fidlin - Special to Conley Media

Feb. 5, 2019

 A shopper leaves Kmart in Oconomowoc on Saturday. The store is having a closing sale,
offering 20 to 60 percent off items.
Katherine Michalets/Conley Media

If you’ve kept a watchful eye on retail-related headlines this past year, the headlines can seem ominous — particularly for traditional brick-and-mortar retailers.

The growing list of shuttering stores has even brought a phrase into our cultural vernacular: the retail apocalypse.

Last year claimed the lives of two big-box chains — Toys R Us and Bon Stores Inc., parent company of Boston Store — each one-time goliaths of the industry. There have been talks of trying to resuscitate both storied brands, but firm plans have yet to crystallize.

We’re only a month into 2019, and there has been plenty of buzz about the fate of a number of other regional and national retailers that could leave more hollowed-out, emptied storefronts as the year continues to unfold.

This week, the ultimate fate of deeply-rooted department store chains Sears and Kmart could be decided in bankruptcy court as a judge decides if former Sears Holdings Corp. CEO Eddie Lampert’s bid to continue operating 425 stores across the U.S. is sufficient.

Regardless of what happens in bankruptcy court, the judge’s decision will have no further impact on our immediate area. The last full-line Sears store closed at Brookfield Square nearly a year ago; a lone store in Madison is the last store standing in this state.

Journalist and retail history enthusiast recently purchased a Kmart blue light special
pole as the Cudahy store was closing.
Dave Fidlin/Special to Conley Media

The same goes for Kmart — where the blue light special became a part of our cultural lexicon. The one-time discount behemoth, which was the nation’s No. 2 retailer (behind only Sears) throughout the 1970s and 1980s, closed its longtime Cudahy store Jan. 27, and the Oconomowoc location is set to close its doors next month. Five locations remain in scattered areas of the state.

And then there’s Shopko — which, like Kmart, got its start in 1962 (alongside heavyweights Target and Walmart). The financial cracks of this Green Bay-headquartered chain began showing late last year and reached a breaking point last month as the company filed for bankruptcy, hopeful to reorganize around a stronger base of stores.

Whatever becomes of Shopko, its absence also will be felt locally. Stores in Grafton, Sussex and West Bend are in the process of winding down operations and will be closing in the months ahead.

Other retailers with smaller footprints are also facing possible extinction or a reduced footprint. This is especially true of mall-based retailers.

Among the examples are women’s clothier Charlotte Russe, which announced Monday it is filing for bankruptcy, shuttering nearly 100 stores, including ones at Brookfield Square and in the Bayshore Town Center in Glendale.

Last month, children’s clothier Gymboree announced plans to close all of its namesake stores, leaving yet another vacancy within Brookfield Square and Southridge Mall in Greendale. There’s also reports of specialty retailer Things Remembered closing stores as it struggles to keep pace with changes in the marketplace.

Dave Fidlin
Dave Fidlin/Special to Conley Media

All of this news — especially the post mortems — is enough to make the 1980s-era Toys R Us kid embedded within me cry in the name of nostalgia.

So, what gives? Are we entering an age where online shopping has toppled traditional brick-and-mortar retail? Does Amazon receive all of the credit for this recent series of store closures?

Yes and no.

While Amazon has made inroads in a number of areas — retail being just one of them — the company still commands a relatively small piece of the overall retail pie. According to analytics provider One Click Retail, Amazon holds about 4 percent of the U.S. retail sales and 44 percent of all online activity.

Statista, another analytics firm, estimates 11.1 percent of this year’s retail activity in the U.S. will take place online.

So, Amazon and the Internet are playing a role in the erosion of the brick and mortar landscape, but they haven’t toppled it.

In reality, many of today’s struggling retailers face several characteristics. In some instances, leadership has been credited with not evolving with changing consumer tastes.

In other cases, private equity has been criticized for not putting enough investment into store operations — or placing a heavy debt-load onto the retailer’s capital structure. This scenario was especially true of Toys R Us, which was lumbering with $5 billion in debt when it filed for bankruptcy in fall 2017.

I remain bullish on the future of brick-and-mortar retail, and there is plenty of reason to have optimism as we scan the area.

Town of Brookfield’s 2year-old mixed-use development The Corners continues to grow with an ongoing roster of new tenants, while West Bend’s Main Street thoroughfare has grown, netting such retailers as Meijer. And Grafton’s Interstate 43 corridor has thrived in the past decade-plus after village leaders shifted their focus on where the community’s main commercial hub should be concentrated.

The times they might be a-changing, but that doesn’t mean we will stop stepping foot into retail stores anytime soon.

(Dave Fidlin is a freelance journalist and a retail history enthusiast. He is the proud owner of a flashing Kmart blue light, which he purchased during a fixture sale before the Cudahy store closed.)