When Miami-based Retail e-Commerce Ventures (REV) recently announced that it purchased the remains of twice-bankrupt RadioShack, it wasn’t some one-off strategy to acquire distressed assets for pennies on the dollar. Instead, it was the latest move in a business model that the company has long followed.
It’s a plan the company describes as “transforming well-known, distressed retail brands into eCommerce success stories.” The RadioShack play marks at least the sixth time REV has attempted that just this year alone.
“The RadioShack brands have resonated with consumers for nearly 100 years, and we are confident RadioShack’s relaunch as a cutting-edge eCommerce company will amplify the awareness of this iconic brand internationally,” Retail e-Commerce Ventures CEO Alex Mehr said in announcing the acquisition.
REV Executive Chairman Tai Lopez stressed RadioShack’s sales potential as a well-known global brand.
“Our approach builds off the existing strength of extraordinary brands such as RadioShack and supports our mission of transforming these beloved entities into internet-first companies,” Lopez said, pointing to the electronics retailer’s existing operations in the United States, Canada, India, Australia, Europe and China.
Snapping up Fallen Retail Brands
The scale and global scope of REV’s RadioShack revamp might mark its largest deal yet, but it’s in no way the company’s first such move. So far this year, REV has taken steps to inject its advertising and eCommerce expertise into several other fallen retail angels, including Pier 1, DressBarn, Linens ‘n Things and Modell’s Sporting Goods.
In fact, a report produced last month by CB Insights, the research arm of commercial real estate giant CBRE (Coldwell Banker Richard Ellis) listed 117 bankrupt chain stores it said had succumbed to COVID-19’s “retail apocalypse.” Companies that have filed for Chapter 11 during the pandemic have included Sears, JCPenney, Neiman Marcus, J. Crew, Lord & Taylor, Steinmart and Tailored Brands, which owns Men’s Wearhouse and Jos. A. Bank.
While each individual retail bankruptcy carries a unique mix of indebtedness, high rent exposure, sluggish sales and missed trends, their collective demise is truly a reflection of the unprecedented impact of the global pandemic.
Most of the distressed brands will likely emerge from bankruptcy or even continue to operate throughout the Chapter 11 process. But almost all of them will do so in a scaled-back capacity as they retool operations, then gradually try to scale up the results.
Re-Inventing for Online
One thing that has been undeniable about life amid the coronavirus is that it’s fueled a surge in online shopping, delivery and other curbside modalities that can replace or minimize the need to go into a store.
While most major retailers have been able to adapt their existing online channels to accommodate that new demand, a few notable standouts have stuck with their commitment to the brick-and-mortar experience.
One such holdout had been TJX Cos., the parent company of over 4,000 T.J. Maxx, Marshalls and HomeGoods stores. But TJX announced last week that it was making a complete U-turn on eCommerce for HomeGoods, its home furnishings chain.
“To both leverage our strength in the home category and capitalize on our market share growth opportunities, we are pleased to share that we plan to rollout eCommerce on HomeGoods.com later next year,” TJX CEO Ernie Herrman announced while releasing the company’s third-quarter results.
In the meantime, other former retail icons have yet to make it back to the mainstream. For example, Toys R Us currently operates just two retail stores – one in New Jersey and another in Texas – while sourcing current orders through Amazon.
It’s Not Just About Retailers
But it’s not just once-classic retailers that are reinventing themselves by returning to their old roots and reputations. Nearly a dozen old liquor brands are trying to make comebacks, and so is an old-line transportation company.
Earlier this month, trucking and logistics operator YRC Worldwide – the successor to the famous Yellow freight company announced a rebranding plan that includes the re-emergence of its nearly 100-year-old name.
“Yellow is the right brand, and it’s the right time to modernize our existing holding company brand in conjunction with our enterprise transformation,” said YRC CEO Darren Hawkins.