2 Defunct Retailers Are Plotting Comebacks—Here’s Why One Is More Likely to Survive

Century 21 and department store Lord & Taylor are among the retailers that shut down in 2020 only to announce plans to reopen months later. Now, Lord & Taylor is back with a new website and Century 21 intends to open a store in South Korea this summer, with additional locations to follow in the U.S., including New York. They certainly aren’t the first struggling retailers to attempt comebacks. However, analysts say one is better poised for success now—and that it's the younger, smaller retailer. A good time for off-price retail One thing that bodes well for Century 21: It’s a good time for off-price retail. “Right now, everybody wants a deal,” said Jess Vadino, vp of ecommerce at Reprise Digital. Personal finance was top of mind for consumers going into 2021 and they are likely to still be frugal, according to research and advisory company Gartner. But whether they’re facing economic hardship or recovery, consumers generally want to shop. “They always have, they probably always will,” Vadino added. “And so I think for that, off-price retail is set really, really well.” Another good sign: Century 21 shoppers were distraught by news of its closing. “I think that brand affinity is something that's really very valuable,” said Sarah Marzano, senior principal analyst at Gartner for Marketers. Part of the reason for this affinity is that Century 21 distinguished itself—at least at one time—from other off-price retailers like TJ Maxx and Burlington. “They tend to have an assortment that skews a bit higher end, skews a bit more towards the luxury side, so I think they're differentiated from an assortment standpoint,” Marzano added. Two hurdles remain, however. One is modifying the in-store experience to meet consumer comfort levels post-pandemic. The other is somehow translating the in-store treasure hunt its customers love into ecommerce. “People love Century 21 because of walking into the store and walking into the basement and digging through racks,” Vadino said. “I think how they execute the experience is going to make or break them because it's not going to be what it used to be.” In addition, ecommerce was never really Century 21’s bag. “I think in 2019, their website was 14% of their overall sales. That's not enough,” she added. Nevertheless, an opportunity exists for Century 21 in returning to its roots and providing true luxury goods at a discount—instead of trying to compete more generally in the off-price market. “If they do it and they do it well, it will absolutely give them an advantage,” Vadino said. “I think if Century 21 stops watering it down and they go back to a super concentrated version of what they used to be, they'll be just fine because they will have this line of people waiting to walk in the doors.” Hurdles appealing to online shoppers Lord & Taylor, on the other hand, arguably faces bigger hurdles as it appeals to online shoppers. For one thing, its audience has always skewed older. “How are they going to appeal to [younger] people who are much more accustomed to flashier, sexier, newer-feeling, digitally-first brands?” Vadino asked. “Because they're so historic, they're such a brick-and-mortar shop.” In addition, the customers sad to see Lord & Taylor go are part of an older generation more reluctant to shop online for apparel—especially without an in-store option somewhere. Furthermore, unlike Century 21 and discounted luxury, Lord & Taylor doesn’t have an equally compelling value proposition. “What was Lord & Taylor's big value prop? It wasn't … you can get crazy discounts on designer goods,” Vadino said. “It’s you can get a fairly reliable, solid … product at any point in time of the year with a good sale from time to time.” To be fair, the retail industry is facing an unprecedented recovery period coming out of the pandemic, so no one knows for sure what’s going to happen. Historically, however, when department stores close up shop, big box competitors have quickly moved in on their customers. Now, whether Century 21, Lord & Taylor and other struggling retailers can stage legitimate comebacks depend on both how loved they were by their customers, as well as how much of “a void that still remains to be filled,” Marzano said. Lord & Taylor Is Back in New York—But There’s a Catch