My mother worked at Lit's and my father at Gimbel's. They were two department stores, real Philadelphia institutions that were never going to be felled by any competitors. Inconceivable. Mom sold lingerie. Pop sold men's slacks, with a specialty in gabardines.
Most of you probably don't even know what a gabardine is. Many of you have never been to a Gimbel's or a Lit's. They died years ago, victims of better competitors that no one thought existed or would ever exist back then. Who could be better than Gimbel's or Lit's! They were kings.
So when I read these stories about Macy's (M) and Kohl's (KSS) last night, I just think Gimbel's and Lit's, and how there is no God-given right to retail, no matter how old or hallowed a name might be.
I grew up in retail. I remember going to store after store with Pop, who was hawking boxes and bags to retailers, hoping to sell them gift wrap or personalized name-plated shopping bags. Sales is tough. But what was he supposed to do? He went into that business, repping manufacturers like 3M (MMM) , International Paper, as well as the now-gone St. Regis and Champion and Climax paper companies, after Gimbel's let him go. Too much gabardine inventory, I guess. Can't ask him now.
We used to marvel that so many of his customers, these little mom-and-pop retailers, would go under right after he had advanced them credit to buy bags that were now worthless, because they had a defunct merchant's name emblazoned all over them.
Why did they go under? Back then it was because of the fabulous expansion of discounters like Woolworth's, Grant's, Korvette's and Kmart. The amazing big box bargain centers. All of those except Kmart are now done in by a better group of stores, namely Walmart (WMT) and Target (TGT) . Kmart stays in business because of it matters to a hedge fund manager that it do so.
So many back then got rolled. I can still tick them off: Jamesway and Caldor and Bradlee's and Ames, all household names that were destroyed by Walmart and Target, which right now, at this very moment, are themselves trying to stay relevant.
Now, not that we want to get all Sartre and Camus about Macy's and Kohl's, but don't we have to ask ourselves what is their raison d'etre, their reason for being? Sure, Macy's is the third largest online seller of its categories after Amazon and Walmart, as Terry Lundgren told our own Brian Sozzi in a great interview last night on TheStreet. But that doesn't pay the rent.
Kohl's does have some terrific bargains, especially in their branded merchandise. I wear it.
I've got sentimental value for both. Macy's gave me my first credit card. I made a killing in Kohl's stock when it was going from a good regional into a great national store chain. That's one of the reasons I always shopped there.
But when I read the stories last night, all I could think of was: "does anyone like going to these places?" Cause I sure don't.
It's clichéd, but I would rather just go to Amazon (AMZN) , or, frankly, to the boutique stores in the Short Hills Mall that cost a fortune, but they know my name and my wife's name and what she wants, and it makes life easier for me than Amazon because I don't screw it up.
There's still room for those ultra-specialty kinds of retailers, but that's because the 1% have to shop somewhere. Yep, they are only for the wealthy, because they charge a fortune for their goods and can get away with it.
Which brings me to a particular point about the mall. It's not that the mall is dead. It's that the mall's rent is too high to pay for all but those who have a particular price point where they are able to make a ton of money. For them, the mall is gravy.
Mass merchandise, even higher-end mass merchandise like that sold at Sak's or Neimans or Nordstrom (JWN) -- which is joining in the charnel house of retail today -- just doesn't cut it, in large part because if you know your size you can just buy it online from those stores or go to Amazon anyway. They don't pay the rent.
You can't go to Amazon when you are buying the finest in jewelry or fashion. At least not yet. Maybe the just-announced Manhattan store -- what a thumb in the eye of Macy's that is -- will have just that among a host of branded Amazon product.
I think that what's so amazing and sad about last night's disclosures is the speed with which this is all happening. Macy's had its best holiday season ever two years ago. Macy's had taken a huge dose of store-closing medicine, but it's looking like the 100-store reduction plan isn't enough.
The only winners there will be Action Alerts PLUS charity portfolio holding T.J. Maxx (TJX) and Ross Stores (ROST) , who will buy that merchandise from shuttered stores for pennies and sell it for dollars, undercutting even Amazon and making it worth leaving your house.
You know, I got to hand it to Pop. He saw all of this coming when Walmart started selling clothes for less than the smaller merchants could pay for them from the factory.
He stopped catering to his rapidly-dwindling mom-and-pop clients and started selling name-plated doggie bags to expensive restaurants made by the Chinese, because he knew that Philadelphians would never spend a lot of money on a meal and not want to take home the leftovers.
They were too cheap.
Now everyone's too cheap to shop at the mall and unless they live next to the mall -- I mean, literally next to it -- the mall's not convenient. Or, they are uber-wealthy and need to see the ultra-luxury wares in person before buying them...
So the only question to ask is that if Macy's and Kohl's, filled with smart people, haven't figured that out yet, then maybe it just can't be figured out. After all, isn't that what's really happening?
But then again, the mom and pop cavalry could never figure out what to do with those department store and discount tanks, and the poor tanks are right out in the open for the jet-powered Amazon to pick them off as they huddle, fearful, within the flimsy camouflage of the great American mall.
