Redfining Black Friday
Redefining Black Friday
It’s the day after Thanksgiving and retailers from sea to sea opened in the dark this morning as they usually do on Black Friday.
Only this year, it’s different.
We’ve been through downturns before, but this economic cycle is promising to be deeper and longer than anything most of us have seen in our lifetimes — worse than anything since the ’30s. And, unless their name is Walmart, retailers are running really scared. These are nervous times for everyone.
Black Friday has always been — symbolically, at least — the day when most retailers begin to turn a profit for the year. True or not, it’s by far the best day of the year for a bit of retail hype. What better images can there be than hundreds of sale-crazed shoppers lined up outside their stores of choice waiting for those doorbusters at 4 a.m. or 5 a.m.? Can it get any better?
Well, of course it can, but this year merchants are much more concerned with the other question: Can it get any worse? And, yes, of course it can.
Even Tiffany & Co., which in quarters past reassured us that the luxury market lives — that at least some of us could still afford to shop (so it couldn’t be that bad) — reported U.S. Q3 comp store declines of 14%. The N.Y. flagship store dropped 17%; and, as if it needed to be said, the Wall Street store saw a dip, too. The declines were “reflective of lower sales to lower market customers,” the company said. At least their challenged results haven’t affected their penchant for snootiness.
Worse, CFO James Fernandez is forecasting U.S. comp store declines of 25%-30% in Q4, with worldwide sales declining 13%-20%. Merchants everywhere should be hoping those don’t turn out to be market-leading numbers. Businesses are still contracting and closing; jobs are still being lost. Mortgages are still being foreclosed and credit markets at every level remain challenged. Recovery will be a long, slow, painful process.
In the news business, it’s axiomatic that bad news breaks after 5 p.m. on Friday. We’ve learned that every Friday can be a black Friday for someone. So, it was no particular surprise in the home textiles industry that Linens ’n Things filed for bankruptcy on Friday (May 2), then decided to give up and liquidate on Friday (Dec. 3).
To say that retailers of all stripes will be tested this year perhaps more than ever before would be understatement; the numbers will tell the story, as they always do. Will customers show up and spend? How much? How much margin will be lost as retailers walk the tightrope between driving sales and realizing profit?
And might a climate of anti-spending actually turn out to be added impetus toward the development of an online retail model? Forrester is predicting a 12% rise in online spending this season. For the last 15 years, or so, retailers themselves have been talking about just how overstored the country is. Could this be the seismic event that propels online retail to the forefront? Or will we simply lower our sights and learn to live with less consumption? Have the days of robust retail sales just faded?
How much pain the stores must endure will largely decide if we have to redefine Black Friday — and, if we must, just how black this day might become.—###
(P.S.— As this is written, the headline on CNBC is “Macy’s Up 6%” and “Macy’s Boosts Market.” Even more reliable (I had to say that), my mother-in-law reports that in New Jersey, the malls are “mobbed” with shoppers who do, indeed, seem to be buying. How much remains the question, but there may yet be a little sunshine.)
