I suppose you could say that just about any industry is brutal for the players involved. The restaurant business, for example, is extremely tough to break into, as the rate of success for a new restaurant is extremely low.

Another industry that comes to mind is the retail industry, especially in apparel. Much of the blame falls on the retailers themselves as many of them have failed to adapt to changing consumer patterns, stubbornly holding on to old business models and brand meaning.

The customers are walking away.

The customers are walking away.

With that in mind, it comes as no surprise that American Apparel will file for bankruptcy today, coming off declining sales numbers that have put the retailer’s existence in jeopardy. It lost $134 million in just the last three months, a fourth straight quarterly drop.

The American Apparel bankruptcy is not a surprise because, even though American Apparel has suffered some bad PR recently with its now-fired founder being shown the door after allegations of inappropriate behavior, American Apparel just doesn’t mean anything within the retail space.

Bankruptcy will be coming to other retailers.

This is a common problem with retailers as their meanings simply blend from one into another. Instinctively, few of us understand the difference between, for example, American Apparel and H&M. You could go down the list of retailers and come up with the same equation: As brands, the meaning just comes down to hip clothes for hip youth. Where’s the differentiation in that?

Recently, Stealing Share did a study of the retail apparel market and much of what I’ve written here is further explained in it. We concluded that retailers must own something that its competition does not. And few do.

The American Apparel bankruptcy is just the start. More and more retailers, especially those in retail who depend on shoppers coming to the mall, will find themselves facing bankruptcy and wondering why their sales are dropping.

Retailers need to own something that actually gets shoppers to choose them, rather than just clicking on Amazon. Which is what they are doing right now.

Share This