Opinion / Jamie Waters
Stock exchange
Department stores and independent brands have a strained relationship. But with retail in disarray, could they form an alliance and hoist each other out of the red? According to recent reports, many big brands are planning to pull their products from department stores and other wholesale networks in the wake of the pandemic, to focus more on direct-to-consumer platforms where margins are healthier. This will hurt department stores but it also means that there will be more room on their shelves for smaller brands.
In theory it could be mutually beneficial. Some department stores, especially in Europe and Japan, are good at unearthing talent. Yet they’re often overly reliant on well-known brands that have solid customer bases – and, as a result, many of their shops look the same. If department stores were to champion small brands more effusively, they could establish distinctive points of view and stake their claim as places of discovery. At the same time there’s a very real risk that the pandemic will wipe out a generation of smaller brands. Some will be snapped up by conglomerates; many others will close. Department stores could represent a lifeline.
Small brands have historically been at the mercy of department stores, whose excessive sales, fast seasonal turnovers and often-generic merchandising can be deleterious. Now that brands’ backs are against the wall, they could be more willing to speak out for what they want. Likewise, department stores might be more amenable to embracing the significantly heightened risk that comes with stocking small brands over household names. It’s a gamble. But sometimes the best solutions are born from anguish.