THIS YEAR DID NOT START WELL FOR BRICK-AND-MORTAR CHAINS.
In January, Pier 1 Imports announced it was closing up to 450 stores. Later that month, two other prominent retail brands—the high-end audio manufacturer Bose and the paper-goods chain Papyrus— reported their own significant closures. And yet, on the same day that Macy’s announced it was laying off 2,000 workers and closing 125 stores, I was arriving at the San Francisco offices of a startup called Le Tote…where a very different kind of thinking was going on.
Le Tote is not a brick-and-mortar business. It’s a fashion rental company. Users subscribe by the month and can rent and return (or buy) entire wardrobes. But last November, seemingly out of nowhere, this eight-year-old startup purchased the 194-year-old department store chain Lord & Taylor for $100 million. The move raised many serious questions, most of which boiled down to: What?!? In 2018 alone, Lord & Taylor lost more than $100 million. Why in the world would a digital firm want anything to do with a floundering mall cornerstone?
That’s why, when I sit down with Le Tote’s founders, Rakesh Tondon and Brett Northart, there seems to be only one question worth asking: “Are you crazy?”
“You’ve got to be contrarian,” Northart says jokingly. Tondon smiles and says, “That’s where the outsize returns are!”
Tondon and Northart are very much aware of the seeming incongruity. To a certain extent, they are even banking on it. Just in terms of press coverage, the Lord & Taylor purchase generated scads of headlines. That’s useful marketing buzz for a startup seeking to bolster its brand in an extremely competitive marketplace.
Denne historien er fra April - May 2020-utgaven av Entrepreneur.
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Denne historien er fra April - May 2020-utgaven av Entrepreneur.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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How Small Shops Take Big Risks - It's not easy for mom-and-pops to try something new, because they rarely have a safety net to fail.But there are ways to innovate cautiously-as one small business on our list, All My Heart tattoo studio, has found.
The Charlotte, North Carolina, studio is airy and suffused with natural light. In the reception area, there are modular chairs, midcentury couches, and a vase of fresh flowers on a Japanese-influenced cabinet. But the real surprise goes beyond aesthetics. All My Heart's owner, Graham Beech, isn't just playing with a new look; he's trying out a whole new business model. Historically, tattoo shops have wanted to control the clientele, and use the tattoo artist as kind of a cog in the wheel, Beech says. What's different about our business is that the client is the artist, and they have their own individual clients.
5 Ways to Multitask Your Fall - From a corporate office to working from the living room, Emmy Award winner Mario Armstrong has five new products designed to make putting in the hours more enjoyable.
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You Can Hire Like Netflix - The streaming platform built an incredible team with a strategy called
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Speedy Growth Killed My Startup - We seemed to be rocking it-lots of press, major partnerships. Then we learned the harsh consequences of overlooking our customers.
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How to Hire for the Future - Small businesses are struggling to find quality labor. So flip the conversation: Show workers how your business will set them up for opportunity.
Small businesses have a hiring problem. According to the July monthly jobs report from the National Federation of Independent Business (NFIB), 19% of small businesses rank the inability to find quality labor as the single most important issue facing their company, while 38% reported job openings they could not fill. Overall, 49% reported few or no qualified applicants for the positions they were trying to fill.
Three Pivots to $100 Million - How do you find a working business model? Do it like Rowan-a brand that reinvented itself many times before finally piercing the ear-piercing market
If you have a tween girl, you've probably heard of Rowan. It's the cool brand for piercings, where licensed nurses insert hypoallergenic studs into thousands of ears every day. With more than 500 employees, it's on track to have 65 stores and an annual run rate of $100 million in revenue this year.But in 2017, Rowan was just a fledgling startup with a great idea and a bad business model. It survived because founder Louisa Schneider was willing to pivot, and pivot, and pivot again, until its mission, profit, and market all clicked into place.
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HOW TO ASK FAMILY FOR MONEY
Your friends-and-family fundraising round doesn't have to be scary and awkward. Here's advice from one of the world's leading investors.
