Mervyns, a California based retailer declared bankruptcy earlier this year and just announced that they were going to liquidate as they could not find a buyer or appropriate financing to continue. No doubt many will ascribe their demise to the credit crunch and recession. While the credit crunch may have been the final nail in the coffin, they did themselves in over several years.
Retailers, like any sustainable business, have to provide a value that customers need, want, and demand that they can’t get elsewhere. Many years ago when Mervyns was on the rise, they were a store that had become what Penny’s used to be, as Penny’s lost their way. As Penny’s recovered and Target became more focused, Mervyns lost its position and its apparent ability to execute. Customers drifted away and the results are as you might expect.
In this recession marginal companies will be pushed over the cliff. In retail, who’s next? I predict that Sears as a retailer may not make it through this downturn. Why? Simple, they have gone from great, to good, to bad to downright awful. In my book It’s Not Rocket Science: Using Marketing to Build a Sustainable Business, I tell a story from my youth of the terrific way Sears treated me in total alignment with their “Satisfaction Guaranteed or Your Money Back: credo. Unfortunately those days are long gone and Sears’ relevance as a retailer is following, and, I predict, their demise is not far behind.
I base this not only on observation of their continued deterioration but on a recent personal experience that assures I will not be their customer any longer and have to assume that I am not the only person who is seeing this total “about face” in Sears.
To make a very long story short, let me summarize by telling you that I bought a stackable washer and dryer combo about 20 months ago. During the warranty period Sears came out several times to fix the exact same problem with the washer. Now that the washer is out of warranty they are no longer willing to fix what appears to be a design defect without a charge. When asked why, they simply stated that I should have purchased the extended warranty. That’s what it’s for. My response is, I should purchased another brand of washer and dryer.
And that is what does company’s in.