Henri Bendel was one of the most successful retailers and set the norms for the luxury retail world, but the trade standards have changed since its first store appeared in New York. According to Les Wexner, Bendel has been closed to improve profitability for the L Brands as a whole and focus on larger brands that show higher performance and potential (Carleton, 2018). By closing Bendel, they wanted to strengthen the company’s position in the market and increase its exchange value.
Henri Bendel has been working at a loss for about two years. Its share in L Brands’ revenue was small, about $ 85 million per year out of $ 12.6 billion of the whole company’s revenue (Carleton, 2018). The decision to stop selling clothes and focus on private-label accessories and handbags contributed to its demise since it lost potential clients by refusing to sell other brands. Stores usually try to offer something new to attract visitors, for example, additional products or services.
In the past, becoming a large retailer meant having more square meters of retail space than competitors. Today, e-commerce giants achieve global dominance with few offices and warehouse space (Rupp, 2017). Retail brands must now explore new ways to expand their business. In Henri Bendel’s case, a transforming customer behavior, internal stagnancy, and the absence of differentiation have led to the closure of this world-known retailer (Berman et al., 2017). They had to compete in price, range, or service, as well as integrate online and offline trading, instead of concentrating only on their private brands. Thus, L Brands’ decided to increase the profit of the whole company as a result of the closure of the unprofitable store.
Henri Bendel has become a victim of the global breakdown of retail. The decline in consumer activity, the increase in costs, the inability to respond to modern challenges, and the rapid growth of online stores are the main reasons for mass closures. Today, customers prefer to search the web for a product, read reviews, check prices, and buy online. Retailers should consider carefully how to respond to new consumer challenges and take into account the importance of social media for business. They have to adapt to new customer behavior if they want to profit.
References
Berman, B., Evans, J. R., & Chatterjee P. (2017). Retail management: A strategic approach. (13th ed.). Pearson.
Carleton, E. (2018). Henri Bendel is closing after 123 years. Web.
Rupp, L., Coleman-Lochner, L., & Turner, N. (2017). America’s retailers are closing stores faster than ever. Bloomberg Online.