Perth family business Textile Traders says it is facing the sad reality of having to close its 11 bricks-and-mortar stores in 2018 and instead only sell online, after facing the “worst retail environment the business has experienced” in three decades.
The fabrics and homewares business, which launched in 1985, told its 30,000 strong Facebook following last Friday that the time had come to close its physical stores.
“The hardest part of the process will be saying goodbye to many long-term and loyal team members that have become like family. The business will work with and support team members during this transition period,” the company said.
The business was founded by Benny Rueben, his wife Judy and her parents in 1985, when the family saw an opportunity to bring a discount fabrics retailer to Western Australia. According to the company’s Facebook page, Benny and Judy’s son also joined the business in 2005.
By 1998, the company had 14 stores across Western Australia. The company’s website currently lists 11 stores still in operation, but the business says the best decision is to close up these bricks-and-mortar sites by August 2018.
In response to the news, customers described the decision as “a tragedy” and “devastating”.
“Fully understand the situation but extremely sad that we will have no other choice than spotlight,” one customer said in response.
In a statement provided to SmartCompany, Textile Traders said the decision came down to a need to move to a “more cost effective and nimble online model” in order to keep ahead of the “retail curve” in Western Australia.
“Customers are brand-focused — there’s no bad channel”
Textile Traders isn’t the first Australian retailer to mark online sales as a priority this year: in January, footwear retailer Diana Ferrari announced it would also close its bricks-and-mortar stores to focus on online and third party distribution.
Founder of the National Online Retail Association (NORA), Paul Greenberg, says it’s clear that an online-focused model is attractive to retailers in this climate.
“However, I am a bit worried that it [moving online only] is throwing the baby out with the bathwater. The quick answer is that retail is never a channel play, it’s a brand play,” he says.
While bricks-and-mortar overheads are significant, Greenberg says businesses should be careful to crunch the numbers and work out which sales model works for them before they follow the trend of other brands that are downsizing in order to focus on online channels.
“If your brand proposition is strong, then it’s strong. But if it’s week, one particular channel is not going to save you,” he says.
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“Customers are brand focused, so the channel solution is not going to save businesses. There is no ‘bad’ channel.”
However, Greenberg believes “inactivity” is the biggest killer of brands. This means independent retailers should always be reviewing how their sales channels are working for them, even if they don’t end up changing their strategy.
“I think the danger is that some businesses are just rabbits in the headlights,” he says.