Tuesday, May 22, 2007

Moving down by moving up

I've always been deeply suspicious of retailers who say they're going to fix things by moving up-market. I am particularly puzzled by retailers who are doing well in a lower market who then try to move up-market. Why?, I wonder.

I posted on this last fall in regard to Kohl's:
Why is it that stores have this craving to move "up-market"? I have always suspected that it's because the execs are embarrassed to be running a store where they and their friends wouldn't be caught dead shopping.

But then I'm a cynic.
So of course I was pleased to see some corroboration in this item from Forbes, Retailers Upscale Move Spurns Customers":

To attract wealthier customers Wal-Mart has added upscale clothing and home lines, alienating its base, says Grom. “I think Wal-Mart going upscale was a very big mistake,” he says. “Is it value? Is it upper end? I don’t think the customer really knows.”

Wal-Mart is pulling some of its designer merchandise from some stores:

Wal-Mart Stores Inc.'s designer line by Mark Eisen has been pulled from several hundred of the more than 3,000 U.S. stores that carried it, the Wall Street Journal said on its Web site.

Wal-Mart brought in Eisen, a former AnnTaylor Stores Corp. design executive, a year ago for its George line of women's clothing, the paper reported.

The move comes as Wal-Mart looks to clear out stocks of unsold clothing, the Journal said.

I'm beginning to wonder with Wal-Mart whether they are just in a bit of a slump, or if they have contracted the dreaded Sears Disease, the symptoms of which are repeated changes in strategy, the shuffling of top executives, and a long, slow decline into irrelevance.

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