Thursday, November 3, 2011

Basements, Bars and Bad Days

So the end is here for Filene's Basement. Of course, like Borders, Filene's Basement has been lurching toward extinction for years. In the wake of the Campeau Collapse of two big department store firms, Filene's Basement -- the first basement store run as a separate unit by a department store, known for years as Filene's Automatic Bargain Basement -- was spun off as a separate company from Filene's, the Boston  store. The thought was that Filene's Basement had a national reputation for bargains and kookiness -- there were always tales of women stripping down to their undergarments in the middle of the store to try on bridal dresses -- that would make it a low-price leader. But Filene's Basement without Filene's never got past being marginal, stores opening and closing, strategies coming and going.

It goes down with its current owner, Syms, which for many years was a similar "automatic" store -- size tags were by color, for example -- that emphasized low price with limited service at a time when the department stores were doing away with their Subway Stores. Part of the problem seems to be that no one could replace Sy Syms, including his daughter. Part is blamed in this story on Bank of America. (Why not? No one likes them at the moment.) But it is also noted that Syms (and Filene's Basement) were prominent before off-price online sites, before Neiman's and Saks ran their own off-price stores, before places like Tanger outlet centers.

Schumpeterians might want to call it all "creative destruction," but sometimes destruction is just destruction. The term "creative destruction" strikes me as the flip side of the belief that "change is good" -- because change is progress. Sometimes change is just change. Something replaces what was there and we come to adapt to it and no matter what it is, some people will really like it, and so we say "it's progress." But sometimes, it's just different, neither better nor worse. If Nordstrom fights a Filene's Basement or Syms by opening  Nordstrom Rack, if people buy clothes online instead of phoning in an order (or mailing in a coupon) from a printed catalogue, you probably have some saving in costs, but really neither better or worse. It's just change and not particularly creative, except in a very limited sense of the term.

The town in which I live -- one of 22 "dry" towns in New Jersey -- will vote next week on whether to allow liquor in a question whose advocates state limits licenses to Moorestown Mall, which has fallen on hard times. The mall owner promises major renovations. As Michael Lisicky notes in "Gimbels Has It!," Moorestown Mall -- one of the country's earliest enclosed malls -- was always a second-tier mall, established because Strawbridge & Clothier would not allow any other Philadelphia department stores to join it at Cherry Hill Mall in the early 1960s, when the perception of South Jersey was changing to "affluent suburb" from "tomato fields." Lit Bros. was already in downtown Camden, so John Wanamaker and Gimbel Bros. went to Moorestown as their alternative to Cherry Hill. After the Great Macyization, both malls ended up with Macy's; Cherry Hill has Penney's and Nordstrom, Moorestown has Sears and Lord & Taylor, but Cherry Hill has clearly become "downtown South Jersey" and Moorestown seems to be sliding into dead-mall status.

Last night we listened to a conference call held by the mall's owner (which also owns Cherry Hill) on its effort to have liquor licenses allowed in Moorestown for the mall. Many people fear that somehow this will allow bars on our cute Main Street; others think part of Moorestown's perceived exclusivity comes from  a lack of liquor. Most of the people on the call spoke in support, but one asked, instead of getting, say, McCormick's & Schmick's, can't you bring in more department-store anchors? The owner essentially responded with, what department stores would those be? Any number of dead malls are a result of malls having been overbuilt because Smith & Son went into Mall A and Jones & Bro. went into Mall B. As department stores declined, one mall became the "new downtown" and the other faded, because both had the same national stores and the only reason both had been built was because Smith didn't want Jones in his mall. Throw in off-price, catalog, online and ... boom. Noncreative destruction.

The answer to "why fine dining?" is that fine dining can't be replicated on the Internet or sent to outlet centers in the middle of the Pine Barrens. Fine dining can't be downloaded or streamed. You have to go there to have it. Once you're there, maybe you'll buy something else. Even if you don't, you'll see the mall as an upscale experience rather than one step above Wal-Mart. Our restaurant critic wrote this week about how celebrity chefs have become our current stars. Certainly they come into our homes on TV the same as other stars, but the reason for their fame -- their food -- is not something that can be supplied On Demand, and thus we gain cachet from having been there or at least knowing about it. Fine dining is the opera of our times, hedonistic and fattening though it may be, because it can't be replicated on the Internet. Its exclusivity is less open to devaluation. When everything is everywhere, it has no particular value.

Which is part of the problem facing newspapers, which used to have some level of snob value because if you read them you knew more than the next guy who didn't read them. Now news is everywhere and at every time and knowing it gives you no advantage, so why pay for it? About which I can only point to the decision of my former employer Booth Newspapers to cut home delivery of four papers in Michigan to three big insert days and say: How sad. Who would have dreamed that economically bereft, blue-collar Michigan would become the test kitchen for moving all readers online? On the other hand, why not? If print newspapers are going to be, as a story about Minneapolis described them, a "premium product," and you have a state that seems unlikely to be able to afford premium products, what do you lose by dumping them? You're losing already. I remember the Grand Rapids Press when it was a daily giant in terms of number of pages -- like the Columbus Dispatch, it so dominated its region that you had to advertise in it. I see it at my brother-in-law's house and it looks like a small-town daily in terms of size. So why not force everyone to take the e-edition or just read it three times a week? If you lose half your readers as a result, you're probably making even more money. And like Syms, we seem to already have passed the era when people would moan about the loss. But creative destruction? Nah. Just destruction. Better? It might be. But it might not. In the end, though, we'll tell ourselves it is, because it makes life livable to think so.


Mae Travels said...

I'm not sure the absentee owners really had such a great idea when they shut down the Ann Arbor News -- they've laid off a lot of the skeleton staff they "rehired" when they destroyed the old-style paper, and I really wonder if they would have made more money if they had just let it die a slow death. Further -- other local web journals are competing vigorously. Here's an article that resonates with your blog post:

I'm not an especially good witness since I only subscribed to the Ann Arbor News for a few months in the nearly 40 years when I could have done so, and now I read it more for free online than I ever did before.

Davisull said...

Ann Arbor didn't just present an onlive-savvy population to the Newhouses. There was the cutback in home delivery by the Detroit papers, forcing ads into three days a week for all the papers linked to the Detroit economy; the fact that Ann Arbor increasingly is a suburban community in Detroit instead of an outlying town, and when that sort of identity shift happens the local paper is weakened; the high number of apartments in Ann Arbor (many apartments won't let newspaper delivery get inside); the general malaise of Southeast Lower Michigan. And Ann Arbor city also had a population that, while vitally interested in the cultural and neighborhood-identity politics of a college town, really had no interest in what was happening in Superior Township or the everyday workings of the Washtenaw County board. Those are the sort of stories that alt-weeklies traditionally have emphasized because they didn't feel an obligation to report "what happened yesterday."

But still, you only do things as radically as they are being done by Booth if you feel that it doesn't really matter if you're wrong, the property is marginal. I think, with absolutely nothing to back me up except watching Syracuse, New Orleans, Birmingham and other Advance markets, that the Newhouses have decided that Booth -- which, it must be remembered, was bought by the Newhouses to obtain Parade magazine and not because they ever really wanted to own the Jackson Citizen Patriot -- has no real upside and thus can serve as a test for their other markets where decisions like these might be more risky.

Newhouse has tended to set its dot-coms up as separate units; what we have here is the dot-com taking over the newspaper. Usually the newspaper takes over the dot-com. Perhaps they want to see if that model will work. Also because Booth has always operated as a separate unit, subsuming it to seems like part of its statewide orientation. If there was no Booth, if Grand Rapids and Flint and Saginaw had just been papers Newhouse owned, I doubt this would be playing out the way it is. There would have been more turf to defend.