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Death Of The Independent Sneaker Store

Date: July 02 2010

By: Sneaker Freaker

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Like embryonic research labs, the top tier indies were designed to carry the raddest product, to test the boundaries of cutting-edge design and directional taste as well as create an environment where brands could tap directly into the ‘early adopter’ market.

The ‘cool guy!’ The ‘tastemaker!’ I hate those terms but you hear them used a lot and in this case, they define the ‘trickle down’ effect where a mass of suburban kids with dollars to spend mimic and buy into the ‘cool guy’ steez at a slower rotation of the fashion cycle. The so-called science of modern marketing is based on this simple principle, which in itself is a variation of the car industry’s decades old devotion to racing – ‘Win on Sunday, sell on Monday!’ As we saw recently with GM, Chrysler and Ford, things change pretty fast and when they do, it doesn’t matter how big you are, you better make sure you’re the first in line at the bomb shelter.

Even the most casual sneaker enthusiast would be aware that in recent times, things have soured somewhat. Goodfoot, Provider, the 400, Our Spot, Nort NY, Ryouki and Footpatrol (amongst many others) were all well known stores in their respective local markets. Sadly, for various reasons I am not totally privy to, none of them are currently in operation. Recent history would suggest that other names will soon join that list. Some will go bankrupt, others will reinvent their equity into fresh spinoffs while some owners will simply decide that having a regular 9-2-5 has benefits, not the least of which is a stable income and a distinct lack of melodrama in their lives.

Six years ago we ran a story called ‘How to Open a Sneaker Store’ which has had over 500,000 readers online. Presumably, at least one or two kids that read the story did just that and I hope they made enough paper to justify the store fit-out, not to mention the blood, sweat and tears that they invested. The irony that we’re now documenting the demise of many that shared that dream is not lost on me. I’m personally devo-ed for the stores concerned, many of whom I would consider good friends – even if some of them like the bankrupt Provider still owe Sneaker Freaker plenty of cash!

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To write this off simply as a byproduct of the GFC is too simplistic.

The deeper malaise is a complex situation that is probably even a little heavy for some readers of this specialty magazine. In response I’ve tried to keep it simple and entertaining (you be the judge!) while offering a 360˚ viewpoint that represents the multiple players in this Shakespearian tale of lust, greed and envy. If you love sneakers, it also affects you, simply because it is clearly affecting the types of products that are being made, as well as where they are sold.

The internet is the one bugaboo that casts a huge shadow over everything that is happening. For all the positivity it brings, it also creates nightmares for both brands and stores during this period of adjustment. One of the most fundamental recent changes is that the strict controls over distribution that applied to retail stores for decades no longer seem to be in place, leading to discombobulation – a feeling that there’s too much product and it’s too freely available.

In an ideal world, everyone would be making coin, life would be rosy and the party would continue. Small stores have every right to defend their turf, but also need to be realistic about their place in the pecking order. Foot Locker, Finish Line and others at their level such as JD Sports in the UK are the engine-room of the sports industry economy. Let’s not forget, sneakers simply wouldn’t exist as we know them without their contribution to the bottom line. They pay the bills that pay the wages, research budgets, marketing and everything else that we as consumers take for granted. They are the most important players courtesy of their buying power and geographical reach.

Everything else can be considered icing on the cake, but as I’ll show, it’s a pretty basic cake without a fancy frosting on top.

The race to increase efficiency, to negate risk by playing it stone cold safe has led to a conservative ‘bummer’ that is plain to see.

Will this be a blip on the horizon? Is this the death of the ‘cool guy’ store or have we just bottomed out, with a rebound on the cards? Only time will tell.

This is not something I enjoyed writing and it’s probably not something you’ll enjoy reading as such, but it is what it is and it will make you think. There’s no point not mentioning the Silverback in the room anymore, this gorilla is too damn big and hairy chested.

Like it or not, this is where we are at in 2010. 

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At one level, the retail equation is simple. If stores can’t sell enough stuff, game over. Unless you’re Twitter with 150 million investment dollars in the bank, you can’t keep the doors open without revenue. Breaking square or even small profits can’t sustain life on Mars. Needless to say, no matter how much anyone loves sneakers, being in it ‘for the love’ won’t pay the bills, especially after several year’s daily grind take their toll. Still, passion is the reason why many got into the shoe game in the first place – they love their sneakers and still do (perhaps a little too much), despite the intemperate financial climate.

Hikmet Sugoer from Berlin’s Solebox is one of Europe’s leading retailers and the architect of much hype and German sneaker heat. “Nearly every year people are asking me, what I will do if trainers are becoming unpopular? Guess what? I will sell trainers.”

However, as Gee from Patta Amsterdam noted, “The strong will survive and the weaker will have to go. This doesn’t have to be a bad thing, it just means that everybody gotta be at the top of his game.” 

The impending sense of a ‘sorting out’ is inescapable and one which applies to all industries that can’t continuously adapt to uncontrollable variables. Trends now come and go at lightning speed. Hightops are in one moment and lame the next.

Warp speed is symbolised by Google, where businesses are made or lost on the basis of understanding exactly what kids are searching for, which can be analysed and broken down by the hour, let alone days and weeks.

Being in business is tough, even in the good times. 

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But the overall picture in the streetwear world is infinitely more complex than simply defining good and bad times. New York’s Classic Kicks has been around since 2002 and owner Nick Santora has seen it all. “You want to run a legit business in NYC with insurance and payroll and taxes? It’s nuts dude!”

Margins are another gripe. “People think we have 100% margins and must be rich! If only it were that easy!” said Nick from Apartment in Brisbane.

Frank Liew from Qubic & Quarters in Auckland thrives in one of the smallest markets in the world yet still travels relentlessly to hone his vision. “Independents were lucky to have been caught in a fast expanding trend and relied on ambient demand. There was little need to promote anything when people were banging on their door. No need to worry about sell-through, inventory levels, credit, margins and all the usual aspects of retail. It created a false sense of demand.” 

Money doesn’t grow on trees in other words – you better hustle if you wanna grab some. Mike from Packer Shoes in New Jersey is more concise. “Not everyone is the next Ralph Lifschitz!”

Randy Kleiner from the 400 in Denver closed his store recently. He found little understanding when crunch time came. “We had big plans, serious ambition, unlimited energy, great support and ample talent to pull it off.  We pushed hard and to this day believe that we did the best we could but ultimately, we did not have resources in place to push a young, specialized business through the stiffest economic period this generation will know.”

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Being small does have advantages. You can move fast, shoot from the hip and get stuff done that would take others months to plan by committee. On the negative side, small means you’re chronically under-resourced, both financially and in terms of human talent.

There’s only so much expansion you can achieve on a shoestring, and when you’re small, that’s all you have in the spreadsheet under marketing activity. Nick Santora knows, “It’s tough for independents to have a real marketing budget. Blogging should only be 10% of the plan.”  Unfortunately, blogging has been 90% of the plan for many stores. Clearly, it has not been enough to just open the doors and let the cash roll in.

It is also possible that many stores have realised that instead of being cocooned from the bigger picture, they are just as affected by external forces such as mortgage rates and the dire job market.

Volatile currency fluctuations are another huge wildcard. While prices in the US are usually half what they are in other countries, the weak English pound and US dollar have distorted the playing field to create both winners and losers.

Phil from the successful Laced store in Brisbane is all too aware how cheap it is to shop online in the US, at a time when the Aussie dollar is virtually equal to the Greenback. “Our customers know what they want and you can’t blame them for doing what they do. The more people getting into the culture, the better, but at the same time, people need to realise that showing support for their local stores will establish the scene in your city.”

A noble wish for sure, but not many kids are prepared to pay extra just to keep food on someone else’s table.

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Rents are another subject close to any retailer’s heart. In central London, it appears that it’s now almost impossible for independent stores to exist, let alone prosper. Covent Garden, Soho, even the once-affordable East End is now gentrified to the point of excluding all but the most well-backed operators. That means more of the same-o same-o on sale-o with clusters of blue-chip fashion names glued together in the same pattern.

Jay Gordon from Bodega in Boston also agrees. “We’re living in a world that is becoming one giant corporate logo... Support your local sneaker stores and skate shops because wherever you live, there’s a chain store waiting in the wings to fill the void.”

Seventeen years after he wrote The McDonaldization of Society, George Ritzer’s theory is even more relevant. Diversity is the key to the health of any eco-system and London seems to be the bellwether of a global epidemic.

Forty years ago, Carnaby Street was the epicentre of swinging London. Five years ago, it was a haven for stores selling punk and junk to continental tourists, excited by the unique UK flavor of this weirdly eclectic street. It had a youthful vibrancy, but it wasn’t cool either, certainly not by today’s streamlined standards. Today Carnaby Street has been ‘pedestrianised’ – it’s an immaculately paved street populated by concept stores that can be found anywhere in London, and the world for that matter.

Like many places it has lost any sense of having a unique identity.

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Independent stores are also good for a city’s creativity index. Musicians, painters, film makers, artisans, designers, dreamers and schemers... the cultural contribution of a small group of individuals to even a giant city can be immense.

Twenty years ago, a small London streetwear store known as Bond International sprung up on Newburgh Street, (incidentally just off Carnaby Street). With a slogan that read “For the one percenters who want it one hundred percent pure”, Bond introduced many firsts into the UK, including Stussy, Fuct, Giant, Obey, Pervert, Supreme, A Bathing Ape and Silas amongst others.

Surprisingly it was the park bench outside Bond that became the real institution, a meeting place of some of the most influential young people in London today. Anyone who sat on that bench to shoot the breeze would vouch for that. Sadly Bond now exists only as an online entity, an example of the deeper malaise that has touched all in the biz.

Whilst it is true nostalgia won’t pay the bills and landlords have every right to profit from their investment, the closure of stores like Bond at bricks-and-mortar level is a tangible loss that goes beyond mere access to Stussy.

The communal aspect they foster is important as a breeding ground for kids on the way up, many of whom become entrepreneurs themselves. Others join the staff at corporations where they are able to add fresh opinion and street know-how into the mix.

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The generation gap is also proving to be an incisive factor. Stores naturally mature along with their diminishing core audience. Learning how to put aside personal taste and connect to a younger, less ‘sneaker savvy’ customer is imperative – maintaining a leading edge at the same time is the challenge. Going ‘upmarket’ to a more mature vibe may impress the 30+ dudes, but it won’t bring tonnes of teens in the door if all you sell are Visvim and Redwing.

Frankly, Gen Y could care less for Gen X’s sentimental memories of vintage ‘sneaker hunting’ and other ‘ancient’ customs with no relevance to their digitally labyrinthine lives. Kids want uncomplicated fun! It’s a bitter pill, but one which all stores need to swallow – roll with the times or you’ll be the ‘old fossil’ stuck in the tar pit.

Throw the internet curveball into this discussion and the side effects are equally contagious. The music industry has felt this pain more than most. File sharing and plummeting sales have shown that once the digital floodgates open, everything changes.

Five years ago, most stores could only dream of ‘officially’ selling online as the big sneaker brands resisted the avalanche. Once it became an online free-for-all, many stores improved their bottom line by a percentage, but any gain was negated by internet-only retailers who seemingly have a huge overhead advantage.

It’s a futile exercise condemning the impact of technology in our consumer lives. It’s here and it’s never going away. As Natalie Massenet proved with net-a-porter.com, it’s the superfuture, even for notoriously controlling high-end labels. Every brand wants to sell more and you can’t argue with that as the bottom line. Let’s just say the internet makes good things better and multiplies the negatives as well.

Cold comfort if you’re the loser. 
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There is another contradiction at play. Many years ago I was of the view that only selling cool sneakers in NY, London and Tokyo was bullshit. Shouldn’t access to this awesomeness be widened up? Well, be careful what you wish for!

The ‘same’ stuff is now sold from Timbuktu to Reykjavik and it’s not surprising that an outbreak of ennui is the end result. Frank Liew agrees. If the product relates on a global scale, it should be available globally. However, I like the idea of not being able to access certain types of product so long as the story behind the product makes sense to do so and it’s not just some procedural distribution decision by some box ticker behind a desk who hasn’t considered what or who the product relates to” Good luck trying to work that out Frank! It’s an impossible equilibrium to achieve.

One thing is for sure. Travelling to megalopolis retail meccas like New York to buy cool gear is simply irrelevant nowadays. Stay right at home, talk your head off on Skype and use Paypal to pick up the tab.

A criticism that many indie stores propagated a sense of being ‘too cool for their own customer’ is one that has some substance. Having been on the end of it myself (I’m talking about you Clientele NYC!), this projection of superiority always intrigued me, especially when it came from one of the lamest stores I’d ever walked into (I’m talking about you Clientele NYC!).

It seemed to derive primarily from New York stores, where a certain amount of pride was taken in skewering their customer. I’ve seen shutters drawn, false sold-out responses to eager enquires and all sorts of shit pulled to make ‘unworthy’ kids wilt under the pressure. It became something of a notorious retail blood sport...

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To be fair, others like the hilariously brash Chris Vidal from Flight Club and latterly Alife, managed to make their raucous presence an essential and memorable part of the NY shopping experience. Last year I walked into the Supreme store in LA and nearly fell over when the counter-guy gave me a friendly hello. Good customer service will always win repeat business but you don’t always find it in the indie sphere.

Too busy blogging I guess.

When you haven’t got the luxury of being the hot-shit anymore, a snooty attitude looks dated fast. Frank Liew also noted, “There are people out there who believe this scene should be elitist in a cooler-than-thou type of way, but the true role of these people should be guidance, not segregation” Perhaps the superiority complex was and is part of a bigger conceit? Cool people don’t buy shit.

Just ask any store owner. And if you are a store that wants to trade in cool shit, what do you do when you’ve alienated an entire generation who suddenly don’t care about you or your reputation anymore?

Let’s think one predictable step further along in this process. What if there’s no more ‘cool guy’ stuff created by big brands to sell in ‘cool guy’ stores? What exactly, are the indies supposed to specialise in and what are we supposed to fiend after? GR?

If everything and everywhere starts to look the same, is it any wonder boredom sets in? Nick from Apartment echoes the sentiments of many I spoke to. “It’s not like two years ago when you could throw any combination on a sneaker and it would sell.”

Laced also agree. “When we were kids, shoes were a status symbol, if you had the new Nikes you were the shit...it’s just not like that anymore. It’s hard for customers to get excited about what’s being offered at the moment cause everyone’s seen it all before.”

Forget about spending big bucks on trend forecasting by numbers or the old chestnut of travelling to Japan to copy what kids are up to, watching what’s happening now means you’re yesterday’s news.

It’s a nightmare out there.

Mike Packer’s family has been in the shoe business for generations, giving him a uniquely historical foundation to comment. As the current head honcho of Packer Shoes in Teaneck, New Jersey, Mike has an interesting take on recent history. “Things today have the feel of the late 80s when the industry was stale. Up came the smaller companies which took market share, forced change and made a name for themselves – Reebok, FILA, Saucony, Etonic, Ellesse and Troop all nipped at the heels of the big boys. That in turn made the larger players re-evaluate themselves. We can see that happening more and more.”

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Being a publicly listed company brings pressure to generate consistent growth. Shareholders demand a return on their investment and the first principle of capitalist business must be followed. Growth may manifest itself in diversification or in all manner of business decisions, with both short term and long term goals as the objective.

Needless to say, brands also have marketing money to invest where they see value and strategic objectives that don’t always dovetail totally with the needs of small store owners.

Perhaps the strategy of playing to the ‘cool guy’ has waned amongst the biggest players of all?

Phil from Laced is aware their category no longer has the luxury of being seen to drive the business. “The chains get more attention from the major labels. We’re the underdog and a small percentage of their business. We could always do with more support, especially now.”

On the flipside, dealing with those small stores that order less and less but still want to retain exclusivity is a hassle that the big guns may no longer be prepared to accommodate. Outstanding accounts are also unlikely to create positive goodwill.

No wonder then that even a small outfit like FEIT would embark on an ambitious plan to become an internet-only brand. Check our interview with FEIT’s Tull Price in Issue 18 for his spin on this complex issue.

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So, where are we? Low foot-traffic, zero marketing, huge rent increases, saturation product availability... the list of mitigating factors against success grows, each compounding and multiplying the bleak outlook.

Gee from Patta however has the enviable confidence that comes from having a solid foundation. “I am not negative at the future at all. Actually this is the best time to come up with new creative ventures. Good ideas and creativity will always prevail.” 

Frank Liew also agrees. “Independent retail isn’t going anywhere. Sure, it might change, you might see certain names come and go, but for the most part it has to stay to give credibility to this culture in some way.”

Hopefully we have reached the nadir of the cycle. When the mushroom cloud has settled, it will be interesting to see what and who remain standing. As Frank from Boston’s Concepts store observed “You have to destroy to rebuild. This cycle can serve as a calibration. Big chains discovered our magic and forced companies to feed them specialty product. We will cultivate the ‘next and new’ and capture the bug in the jar again.”

Mike Packer has a practical suggestion. “Find the next Mars Blackmon to put the industry on its ear again!”

Like the skate industry that has ridden the crest of the wave and survived the inevitable wipeouts, the athletic footwear industry is adaptable and inherently creative. Life will surely go on. But without the independent store to attract the ‘one percenters’, life on the street definitely won’t be as interesting, nor as colourful.

Here’s a further, random thought. In ten years time, perhaps sneakers will be sold without any human interaction at all.

Maybe there won’t be ANY stores where you can hang out, rap with the staff about your girl’s love for Air Max and drop science on your vintage SBs.

Who knows, in 20 years time, perhaps sneakers will be teleported directly into your hands using subatomic ‘Soylent Green’ Flubber particles transmitted over your iPhone that reassemble themselves magically into bespoke foot covers. Weirder shit has surely happened.

Welcome to the future!

Woody
SNKR FRKR Ed.

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I would like to thank all the retailers who gave up their precious time to offer their opinions. If there is an upside to any discussion, perhaps our readers will have a renewed sense of pride in their local store! 

 

 

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