Steve Wybo: Retail’s Burning Question: Trouble for Specialty Retailers? – WWD
WWD features Steve Wybo in it’s article titled, “Retail’s Burning Question: Do recent American Apparel and Quicksilver bankruptcies portend trouble at specialty stores?”
Regarding consumer behavior and response to brands, Steve Wybo, senior managing director at Conway MacKenzie, where he specializes in insolvency and bankruptcy matters, M&As, turnarounds and crisis management, said it is now more common “for retailers targeting Millennials to lose market share quickly,” citing troubles at Abercrombie & Fitch and the Gap Inc., among others.
“Due to availability of social media and e-commerce, trends change quickly and young consumers have the ability to quickly change buying preferences,” Wybo said. “Quiksilver funded a risky pivot strategy — going from summer wear and growing into winter wear — through debt, and when the strategy failed, it couldn’t service its debt load.” Wybo said when companies such as Apple Inc. and Microsoft launch new businesses or technologies, it’s done with “little to no debt.”
“Another major error was that Quiksilver attempted to go direct to the consumers to retain more of the margin, but alienated its distribution channels,” Wybo said. “In specialty/trendy retail products, the retail brick-and-mortar stores are especially important as compared to commodity or everyday wear (jeans, for example). Quiksilver may have picked up some margin in the interim, but lost significant top-line volume and revenue as a result of this strategy.”