One of Los Angeles’ biggest retail closure stories of the year came and went, perhaps just the way a public relations firm might like it.
Fred Segal’s seemingly swift end came with the usual reflective headlines about the “end of an era,” in addition to quick one-liners succinctly stating the obvious: the 63-year-old boutique retailer has closed.
Los Angeles Times, Women’s Wear Daily and Business of Fashion made the quick attempts to cover the news of the next day or, in some cases, two days after the fact. Never mind the bones of the brand had been largely picked over in the months leading up to its final breath, after steep discounting on designer and Fred Segal-branded product for weeks straight. There were also the quiet closures one by one of stores the brand celebrated not long and legacy media were all too happy to cover.
First, it was the Santa Monica store on Montana Avenue. Then it was the Marin Country Mart and then The Shops at Sportsmen’s Lodge in Studio City.
Each store opening had been covered with much fanfare after the news was fed to legacy media reporters. The closures? Not at all.
So, perhaps not shockingly, the stories on the closures seemed to come too late for the vendors who saw their lines marked down and employees now out of jobs, including those who had hopped on board believing in the ambitious plans of parent companies who continually fed reporters lines of wanting to scale an iconic business.
Few questioned the merits of the ownership and the executive teams installed to run the business each time the Fred Segal license traded hands.
Perhaps telling was what Global Icons – the most recent licensee – CEO Jeff Lotman told the Los Angeles Times last week when a reporter came calling about the closed doors: “Everything just fell apart [after Covid], and then I sort of had to become a retailer, which is not what I planned to do. I knew nothing about retail.”
In 2019, at the time Global Icons’ acquisition of its first-ever brand, Lotman boldly stated the retail industry’s headwinds were relegated to those whose businesses are “boring.”
Lotman went on to tell the Times his strategy was to focus on branded product, lamenting that the brand never capitalized on its own equity.
“That’s really what we needed to develop to make this thing work,” Lotman told the newspaper.
Global Icons is a licensing company, which looks for logos with brand equity and enlists factories to stick them on blanks – from T-shirts to water bottles – to then sell. The danger is rapid category expansion without awareness of the potential for brand dilution.
The strategy can work if executed thoughtfully. Otherwise, it can be filled with landmines.
Licensing is a different skill set from being a merchant and understanding what makes the local consumer tick, what’s happening in the broader world that influences buying behavior, how to execute product exclusives and maintaining strong vendor relationships.
Lotman hit the nail on the head when he added, “Retail is hard and being a multi-brand retailer is even harder.”
It’s too bad that wasn’t acknowledged prior to the brand trading hands.
For More on Fred Segal:
Fred Segal Exits LA After Closing Sunset, Malibu Stores
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