The term “retail apocalypse” doesn’t simply sprout up overnight, yet that’s the label circulating in the Australian retail industry. If you thought 2020 was the year of clarity, for 161 bricks-and-mortar retail stores, the line of sight has landed on collapse. Following a brutal flurry of retail closures in 2019, the New Year was anything but a fresh start for the retail industry. Only a fortnight into 2020 and several of the nation’s high-profile retailers have closed up shop.
Why the sudden epidemic in retail? Brick-and-mortar retailers are taking the brunt of this battle as the retail industry implodes at an expeditious rate. As international sellers infiltrate the online marketplace, few local consumers are making a stand and buying from Australian owned businesses. Furthermore, middle-tier retailers struggle to keep up with e-commerce stores. The retail climate is weak, competition is fierce, and a slew of brands are going under. The result is a lengthy list of Australian brands going bankrupt in 2020.
Adding to the shock of the outbreak; most of these retailers are large, multi-generational companies. And while these retailers enter administration to try and salvage the financial loss, bankruptcy is a wall narrowing by the day.
Can the Australian retail industry survive the storm of the retail apocalypse, or is the future exclusively online? Sadly, each business on this list of Australian brands to go bankrupt in 2020 all share a commonality; in one way or another, they’ve each been hit by the perfect storm.
First-quarter retail closures aren’t a new concept. In fact, most closures happen in January and February. Brands try to regain their footing during the holiday spike, only to lose ground with the new year. Yet 2019 and 2020 have commenced a startling slew of retail closures. What gives? How can well-established and high-profile businesses seemingly implode overnight? The truth is that it doesn’t happen overnight, but over a slow and long digression that inevitably leads to administration.
Once the company is upside down beyond salvation, administration is the last line of defence before bankruptcy. In other words, the company can either sell or sink. In both cases, it marks the end-of-the-line for the business.
This perfect storm hitting the Australian retail industry essentially boils down to four major issues:
Of course, there are outliers that defy these principles, but in general, all of the following brands attributed one of the above factors as the culprit to its closure. Without originality, excellent customer service, and an aggressive online strategy, many stores fail to bring in loyal customers and weather the storm. The result? A growing list of Aussie brands going bankrupt. Here’s the forecast for 2020, and it’s only February.
One of Australia’s major retailers, Harris Scarfe, has closed 21 stores. While the retailer hasn’t officially gone bankrupt, it’s positioned for receivership and ultimately, will be sold in 2020, marking the end of its 160-year run.
As of January, this major gaming retail store has closed the doors of 19 retail locations deemed unprofitable. While the company’s owner maintains that it will sustain past these closures, fiscal losses from 2019 weave a grim tale, and it’s only a matter of time before more locations fold.
The iconic fashion chain, Jeanswest, has closed 37 retail stores after entering administration in early January. Just three locations remain in NSW Central West, but for how long? Meanwhile, 263 staff members are jobless. Like many fashion brands at the mercy of the retail bloodbath, Jeanswest’s collapse is thanks to fierce online competition.
Sadly, 141 years of family business won’t save McWilliam’s Wines from closure. Despite spanning six-generations and being the sixth-largest wine retailer in the country, the future is anything but certain as the company enters administration and seeks a buyer.
Another fashion retailer to attribute its closure to a weak retail environment entered administration toward the end of 2019. Now, 530 staff members are without a job, leaving just 14 stores to retaliate against bankruptcy. The reason? A competitive retail environment and massive profit losses. Like Bardot, fashion retailers continue to discount drastically, meanwhile, online sales spike.
The Co-Op Bookshop and Curious Planet
After failing to find a buyer, a favourite for Australian students, the Co-Op Bookshop is officially facing collapse due to $15 million in book debts. To make matters worse, The Co-Op owns Curious Planet stores throughout the nation and (even after a sale campaign), will also close due to a lack of buyer interest. Online book retailer, Booktopia, purchased the Co-Op, marking the official countdown to the end.
Colette by Colette Hayman
Another Australian fashion retailer faces collapse after entering voluntary administration. Unfortunately, accessory chain Collete by Colette Hayman couldn’t survive the unwelcome retail environment.
Australian brands aren’t the only ones suffering from retail apocalypse. In fact, stores around the country are fleeing Australia due to the weak retail climate. BOSE, Kmart, Sizzler and Espirit are among the stores to close shop or shut down a handful of locations throughout the country.
Whilst the narrative consistently blames online competitors for the closures, some brands are choosing to adapt to the shopping environment, rather than collapse.
One fashion retailer may have closed its flagship store, but that doesn’t mean the brand faces bankruptcy. Men’s fashion retail company, Alex Perry, closed its stunning brick and mortar flagship in Sydney due to changes in the consumer shopping pattern. Instead of closing up shop for good, the retailer is focusing on the online space; the Alex Perry collection is listed in 100 online retailers globally.
Which brings up an important point: Can online sales salvage a company from bankruptcy? Perhaps, but it’ll take more than that to create an antidote to the retail apocalypse. Instead of relying solely on online sales, retailers need to reposition their brands with a fresh new angle. Furthermore, people crave a genuine shopping experience that should be seamless from the moment they enter a brick-and-mortar to the moment they check out. Even better? They decide to shop online and they’ll be greeted with the same level of customer-care they experienced in-store.
Sure, we can attribute the retail apocalypse to increased online shopping, an infiltration of international stores and a shifting buyer climate, but ultimately, the future of the retail industry hinges on adaptability. If retailers want to survive the perfect storm of 2020, they’ll have to face it head-on, rather than wait for it to pass.
In the meantime, consumers need to buy Australian if they want to keep their favourite brands in business.
Otherwise, no brand is immune to the retail apocalypse.
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