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The End of Opening Ceremony Marks the End of Shopping As We Know It

Multi-brand stores no longer serve the purpose that they once did. Why do we need them now?
Opening Ceremony's original store on Howard Street in New York | Source: Instagram/@openingceremony
By
  • Lauren Sherman

NEW YORK, United States — Opening Ceremony, a seminal concept store, announced last week that it was closing its doors. It will remain alive in name: owners Carol Lim and Humberto Leon sold the trademark and intellectual property to brand-factory New Guards Group, where they will continue to design Opening Ceremony's in-house line and will maybe even open new stores in the future. But that original Howard Street location just north of Chinatown, the one that transformed a sleepy neighbourhood into fashion mecca, is not part of the plan.

Nostalgic types are mourning the loss: both to the city's increasingly homogeneous retail scene and to the fashion industry, which long relied on Opening Ceremony founders Carol Lim and Humberto Leon to do their legwork by scouting new and interesting talent first. Opening Ceremony was a cool kids' hangout. But it was more than that. It was, like Colette and Dover Street Market, a place to discover. Remember the "Where the Wild Things Are" collaboration with Spike Jonze? Or the launch of the Proenza Schouler's Target collection? Or the rise of Telfar, in which Opening Ceremony played a not-so-insignificant role by supporting and carrying the label early on? I do.

And yet, even if Opening Ceremony had managed to maintain its fashion-mecca status, its ending was almost inevitable, a reflection of the changes in the way people spend their money. It’s not that people don't continue to visit Howard Street. Walk by this Saturday, and you’ll see tons of kids — mostly tourists and students — passing through its doors.

The problem is that they’re not there to shop — at least in the traditional sense.

Concept stores — which promise curation, and a point of view — are becoming showrooms, especially in the US where price sensitivity is more intense. Stores can generate foot traffic, but they no longer own the entire customer journey from discovery to purchase. More often than not, the journey now begins online — on Instagram, or via Google search — and ends online, too, sometimes even with the consumer standing in a store dressing room, ordering the item they’re trying on via a website where it’s already marked down by 30 percent as part of an early-season sales promotion.

A unique experience may give consumers a reason to spend time in a store, but it doesn't undo the impact of the internet. An experience, no matter how great, will not save a retailer from missing out on purchases when an item is widely available elsewhere, and often for cheaper. For instance, restaurants or cafes embedded within a store may be an attraction, but they do not solve this underlying problem. And they're not always as successful as they may seem. Freds, said to be a bright spot for a pre-bankruptcy Barneys New York, generated just $5.4 million in the first half of 2018, down 2.6 percent from a year earlier, with EBITDA (earnings before interest, taxes, depreciation and amortisation) of just $300,000, according to an internal document I've reviewed. Freds may have convinced people to stop by Barneys, but it didn't protect the store from having to offer margin-killing discounts in order to remain competitive.

But it's only going to get harder for multi-brand retailers. Sarah Andelman, owner of Colette, which she closed in 2017, told BoF last year that the most famous of concept stores wouldn't have worked had it been open in the current retail climate.

"When we opened in 1997, you couldn't find brands such as Kiehl's, Reebok Fury, Casio G-shock in Paris and you couldn't find independent fashion magazines like i-D and The Face," she said. "Now you can get anything everywhere. Many brands are direct-to-consumer now and therefore don't need a store like Colette to meet their customers."

One proven way to escape this is by actually carrying products that shoppers can't purchase anywhere else. Stores that fit this profile are increasingly rare, although there are some. In Los Angeles, for instance, Noodle Stories on West 3rd Street sells brands that are near-impossible to find in the US, like Japanese label Arts&Science. Noodle Stories doesn't have a website, and its products don't go on sale until well into January, long after other stores are sweeping the bottom of the discount bin.

My favourite place to shop in New York, Maryam Nassir Zadeh, carries labels that play hard to get, including Cristaseya and Super Yaya, as well as every single piece from the owner’s vintage-inspired namesake collection. While her glove shoes and mules are widely available across the internet, no other store has every colour and style; and her three-piece and top-handle bags aren’t so easy to find outside of her cement-floor boutique, which remains somewhat hidden and clandestine on one of the few quiet streets left on the Lower East Side.

Brands that operate their own stores can be successful, too, because they are able to showcase a wider range of product, and even customise that product for each location. (At Hermès, for instance, store directors do the buying themselves, and there are often items made specially for specific stores.) Selling mostly direct also means having more control over when products go on sale. If you're selling things people want, and they have no other choice but to buy it from you, then there will be progress. But that's rarely the case, as most brands do not have the budget or infrastructure to build out such an expansive, well-executed retail network that also happens to make shopping in-store fun.

It's not that consumers aren't still seeking the thrill of shopping; it's just that it has become much, much harder for retailers to provide said thrill. Especially when stores aren't only competing with other stores, but also with other forms of entertainment. It's easy to buy something online in just a few moments. But eating at a restaurant, visiting an art gallery, getting a facial: these are all experiences that require you to show up in person and take the time.

One area of the apparel market that continues to attract — and sometimes excite — people is second-hand and off-price retail. They’re popular because you have no idea what you’re going to get when you step foot inside a vintage boutique or a TJ Maxx; there are no guarantees. They still offer the thrill — and low prices, too.

How can the stores that survive Opening Ceremony and Barneys regain that feeling? They might not be able to. The only solution might be to flip the equation. Instead of relying on sales of apparel and accessories to be the major sales driver, perhaps the experience should be the core of the business, with the fashion serving as an accoutrement.

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