Do you believe in life after legacy? That’s what brands like Lord & Taylor, Modell’s, and Sears are asking themselves after years of slumped sales that led them to a shared fate of bankruptcy. The pandemic proved a long-indicated trend: brick-and-mortar retailers cannot hedge their existence on foot traffic alone.
Brands with brick-and-mortar origins like Target and Walmart that embraced digital have survived and thrived in an omnichannel reality. Those that took too long and placed tradition above innovation aren’t just playing catchup — their next moves in ecommerce might be all they have left.
With so many attractive, digital-native brands on the rise, why would investors and entrepreneurs bother with dying legacy brands? The answer is something new DTC brands cannot quickly amass: these legacy brands have generations’ worth of consumer trust, with highly recognizable names, and existing strongholds in search & SEO.
When Lord & Taylor was recently listed in a bankruptcy auction, dying retail aggregator The Saadia Group confidently raised their paddle. Here’s a look at how Saadia, REV, and Transformco are trying to bring new life into fading logos with three distinct approaches.
Lord & Taylor’s new return policy: an e-commerce-only approach
The Saadia Group acquired Lord & Taylor and their parent brand, Le Tote, for $12M in October 2020. The brand officially liquidated all 38 stores in February 2021, and the most significant retained asset was a 200-year-old brand name that married consumer trust with nostalgia.
“We're deeply committed to continuing the rich legacy of the brand in a progressive way," said Jack Saadia, principal and co-founder of The Saadia Group. In press following the announcement, he highlighted that the store’s ecommerce operations were strong, with several hundred million in topline sales.
Hindered by the physical stores, however, growth was impossible. Under new ownership, Lord & Taylor will be exclusively digital. The Saadia Group plans to use the iconic name, an extensive email list, and business development & merchandising prowess to serve the brand’s loyal community in this more agile format.
The new ecommerce website launched in April 2021 with a focus on apparel, home goods and beauty, and will reportedly expand into accessories and footwear later this year.
What remains to be seen is if the brand can survive on an ecommerce strategy alone, without the in-store experience that distinguished the brand for centuries. Failure to differentiate Lord & Taylor’s ecommerce experience could lead to this being a last gasp for the bankrupt business.
Strength in numbers: from brick-and-mortar to bundled ecommerce brands
Saadia is not the only company pursuing liquidated legacy brands. Retail E-commerce Ventures (REV) has taken a louder approach to aggregating a portfolio of household brand names that went bankrupt due to the pandemic or a mishandling of their own storefronts. This includes Modell’s, Radio Shack, Pier 1, Linens ‘N Things, Stein Mart, and Dressbarn. It’s a who’s who of ‘90s shopping pavilions.
Dressbarn was the first seeming success story for REV. In 2018, it did $81 million in revenue. In 2019, it went bankrupt and closed all of its stores. As a digital-only relaunch, it reached a project $65 million annual run rate in 2020. Bringing its customers online without the drain of retail stores is almost assuredly a financial win.
“I think of a brand as a gravitational force field. The shopping center was a collection of brands. Together, they created a bigger gravitational force field that brought customers into a certain geographical — physical — location,” said REV Co-founder and CEO Alex Mehr.
Once REV acquires a brand’s intellectual property and remaining assets, they relaunch as ecommerce-only with a top-banner linking each site to the others in REV’s portfolio. Since these brands peaked in shopping centers, it’s fitting that they’ve found a second life in a reimagined walkway of shared digital traffic. Needless to say, a header banner has much lower operational overhead.
In a modern twist, REV reportedly plans to sell each brands’ products on Amazon and Walmart’s marketplaces – proving they’re not only looking to migrate online, but take advantage of the new opportunities that modern commerce presents. It won't be long before you'll be able to "go to Mo's" and visit RadioShack, all within the Amazon storefront.
You can try Sears: legacy brands that want to be more than another ecommerce store
Transformco is yet another holding company taking a different approach to an ecommerce resurgence by helping their brands find new lives online. As the holding company for Sears and Kmart, they’re not only shifting the once brick-and-mortar experience online, but creating robust digital marketplaces that welcome third-party sellers and compete in last-mile delivery.
The new Sears Marketplace, invites third-party sellers to list items on Sears’ website, with the option to be sold in stores based on performance. Kmart’s delivery for prescription will attempt to challenge last-mile pharmacy delivery giants like CVS and Walgreens by giving consumers more convenience and choice.
Rather than simply revitalizing old brands, Transformco is looking to Amazon and other modern players for functional inspiration on what services they can build on top of their existing, well-known brands.
Can a holding company use a dying brand — with little Millennial and Gen Z loyalty — compete with the Amazons and Walmarts of the world? It remains to be seen, but it's certainly one of the better approaches one can attempt to save a 129-year old company.
The battle continues: the future of ecommerce
While Lord & Taylor, Modell's, and Sears play catch-up, it's important to highlight the companies that are simultaneously leading the charge toward ecommerce’s next phase. Startups like Thrasio and Showfields are reimagining the future of online and offline shopping.
Rather than rehabilitating struggling brands, Thrasio pursues high-growth, highly-profitable Amazon products; they target and purchase small businesses that have $1 million in sales and hundreds of five star reviews. In turn, they offer the owners financial exits and put the businesses into their engine of growth + operationalization.
It seems to be working. Thrasio’s strategy to aggregate digitally-native Amazon FBA consumer product brands has led them to be the fastest startup to reach a $1B evaluation. Their portfolio includes products like TrailBuddy, an outdoor adventure gear supplier, Shiatsu, a home foot massager, and ThisWorx, a highly-acclaimed car vacuum.
If their names aren’t familiar to you — you’re not alone. But a quick search on Amazon in these categories rank these sellers at the top of their respective categories. That’s all that matters to Thrasio; they’re not looking for household names, just pure marketplace performance.
Then there’s Showfields, the New York-based retail venue. Digital-native brands are invited to rent short-term, small popup spaces within the Showfields store, offering a low-commitment way to demo and promote their products that are otherwise typically online-only.
Showfields proves that brick-and-mortar isn’t dead, but that the customer experience can be reimagined to fit the ever-changing needs of modern consumers. As Lord & Taylor, Modell’s, and Sears head online-only, one has to wonder if they’ll be back in stores again, only this time in experiences and formats inspired by the new world order.