Foot Locker closes

LIHUE — After over 30 years in operation, Foot Locker, a sportswear and footwear retailer in Kukui Grove Center, closed its doors March 18.

The closure of the Kauai location is one of 100 stores the Manhattan-based company plans to shut down this year, according to reports.

Foot Locker Kukui Grove was one of the center’s original tenants and employed about six before it closed.

The shift illustrates the way people are changing how they buy clothing. Shoppers aren’t just showrooming at stores and then buying the same items online if they can find better prices — it’s a more significant separation from the mall.

“I shop online because it’s easier for me. I usually visit Amazon and buy clothing and electronics. To me, I don’t fight the crowd. I save on gas,” said Waimea resident Leslie Ragocos. “Last year, I shopped for clothing and everything besides food.”

That is spelling big problems for mall chains like The Limited, which has shut all 250 of its stores, and Wet Seal, which filed for bankruptcy.

Department stores like Macy’s and J.C. Penney — anchors for the malls — are also closing stores. Sears Holdings Corp. has said there’s “substantial doubt” about its future, but believes its plan to turn around its business should reduce that risk. The number of “distressed” retailers — those with cash problems and poor credit profiles that are facing strong competition — is at the highest rate since 2009, says Moody’s Investor Service.

USA Today reported that discount footwear chain Payless ShoeSource may seek bankruptcy court protection and close as many as 500 stores.

When contacted by TGI, an employee at Payless ShoeSource in Lihue declined to comment.

“Retail is increasingly becoming boring,” said James Reinhart, CEO of the used-clothing marketplace thredUP. He says much of the merchandise at stores is homogenous, while online “each day there’s a whole new assortment.”

Department stores make regular announcements about the next way they’re going to win customers back, like offering more athletic-inspired clothes or adding tech areas. But they’re fighting a market in which people are already buying fewer clothes, spending online or at discounters when they do, and demanding more personal and convenient ways to buy.

“Whether you’re online or you sell (in-person), you gotta distinguish yourself from what everyone else are doing,” said Parker Price, Kapaa resident. “The foundation of what makes you different is making something that can’t be easily duplicated. That’s how we look at it.”

Brands like Stitch Fix and Bonobos offer curated selections based on people’s preferences, while companies like thredUP capitalize on shoppers’ increasing willingness to buy secondhand items from mall brands like J. Crew, Anthropologie and Athleta at big discounts. Deloitte estimates that the nation’s top 25 retailers have lost $200 billion to the smaller entrants to the market over the last five years.

“These internet-rooted businesses are connecting so well with consumers,” said Marshal Cohen, chief industry analyst at market research firm NPD Group Inc. “They’re offering personalization. They offer great value, quality service and a unique look. This is something that the apparel industry has been ignoring, but consumers are gravitating toward them. And they’re becoming a big threat.”

While U.S. clothing sales increased 3 percent overall to $218.7 billion last year, department stores and national mall-based chains saw a drop of 4 percent, says NPD. Discounters enjoyed a 1 percent increase, and off-price stores like T.J. Maxx and Ross saw sales rise 5 percent.

The Ross at Kukui Grove Center has been popular since it opened in late 2014.

Clothes are also a smaller part of people’s personal spending. In January 1990, Americans spent 5.2 percent of their overall expenditures on clothes and shoes. That compares with 3 percent in January 2017, according to an analysis by Michael P. Niemira, principal at The Retail Economist research firm. If demand held steady, Niemira says, there’d be an extra $255 billion spent.

Even so, retail space rose to 7.76 billion square feet in 2016 in 54 U.S. metropolitan areas — about six times per capita that of countries like Britain, the International Council of Shopping Centers said. Richard Hayne, CEO of Urban Outfitters, likens the retail industry to a housing bubble.

“We are seeing the results: doors shuttering and rents retreating,” Hayne said after the company reported disappointing fourth-quarter results. He expects the trend to continue, and says online shopping is only partially offsetting lower store sales.

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The Associated Press contributed to this story.

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