Why Are So Many Stores Closing?

Perhaps you’re wondering why soooo many chain store retailers are closing sooooo many stores, especially after what has been hailed as a gonzo holiday season. To be sure, after every New Year retailers have always pruned deadbeat locations. But the numbers going into the trash bin of history are dizzying. More than 9,000 store units closed last year. A higher number is predicted for 2020 (https://moneywise.com/a/chains-closing-the-most-stores-in-2020).

The names coming off marquees across the country include some venerable labels: Sears, Kmart, Macy’s, Forever 21, Pier 1 Imports, Gap, Chico’s, Bed Bath & Beyond. Why is the contraction reaching unparalleled heights? Though each chain has its own problems, there are common threads that have unraveled throughout the retail industry.

Start with the fact that in the United States we are overstored (forgive me for not providing actual statistics, but after 32 years covering the retail industry as an editor and publisher of Chain Store Age I am taking retirement privilege and just providing trend analysis. You’ll have to trust I know what I am talking about).

How did we get overstored? No retailer thinks their store is not desired by voracious consumers. So when real estate developers pitched less than A+ locations they signed on the bottom line, sometimes induced to do so as the price of landing a truly A+ spot in a different coveted shopping venue owned or operated by the same developer. The developers, of course, needed those tenants to get their construction loans. Thus, it is no wonder that stores in secondary market are closing and with them secondary market shopping centers.

Everyone wants to blame Amazon and other Internet retailers and before them Walmart, Target, Home Depot and an assortment of big box retailers. Yes, they all contributed to the blacking out of storefronts on Main Streets and in strip centers. They killed off lots of independent merchants and weaker chain stores. As for Internet retailing, it still accounts for just about 15% of all sales.

So what’s behind the tsunami of store closings? Lousy merchandising choices, for one. For apparel and fashion home goods stores, if the wrong stuff is put up for sale customers will stay away in droves. As rents and labor costs are high, the combination with the cost of goods put retailers in a swimming pool of red ink.

Many chain stores have high levels of debt because private equity firms bought them by leveraging retail assets, mostly their leases or the land they owned for their stores, warehouses and distribution centers. When sales fail to meet budget expectations debt payments cannot be met. Suppliers refrain from selling them merchandise because if a company files for Chapter XI bankruptcy protection the law allows creditors to claw back all payments made in the prior 90 days. Suppliers fear being paid pennies on the dollar for their products. That’s why the first clue of a pending bankruptcy filing is insufficient product on shelves or clothing racks.

Failure to keep abreast of state of the art technology and distribution efficiencies are more harbingers of doom. Often it’s because companies did not have the cash flow to make the necessary investments. It’s a melting snowball effect in a red hot competitive industry driven by shoppers who demand instant gratification.

Let’s not overlook the polarization of our population. Not our political divide. The economic bifurcation. The fastest growing retail formats are dollar stores and food discounters like Aldi and Lidl, both European imports, that cater to families on tight budgets. Companies that serve middle income consumers are being squeezed.

Being a high end retailer doesn’t guarantee success. Barneys New York failed because of the aforementioned heavy debt load strapped on it by private equity owners. Toys “R” Us, which knocked off almost all toy competitors, succumbed as well from its private equity debt load. Toys “R” Us was never the price leader. It based its success on being in stock on the most wanted toys. When Walmart and Target matched Toys “R” Us on inventory management the game was lost. Walmart and Target had many more stores than Toys “R” Us in most markets, making it more convenient for shoppers to find what they wanted in their stores. Location, location, location. Three keys to success. Or failure.

Can you still make it in retailing? A resounding, emphatic, YES! Required are merchandise tailored to a specific audience; systems that provide seamless customer fulfillment and support; dedicated, driven staff from the top down; sufficient capital, and even more capital; savvy marketing including an Internet presence; and those historical three keys—location, location, location.

Successful retailers make customers their unpaid promoters. Think Trader Joe’s or The Container Store. A successful retailer would be missed if it closed its doors, missed not because it was nearby or a long time presence in a community, but rather because it brought excitement and fulfillment to the often mundane task of buying and selling everyday goods and services plus the occasional frills that make shopping essential and enjoyable.

If Sears and Kmart Closed, Would You Care?

Perhaps if you’ve been paying attention to news unrelated to Hurricane Michael or new Supreme Court justice Brett Kavanaugh or the baseball playoffs or the 1,300 point plummet of the Dow Jones Industrial Average Wednesday/Thursday, perhaps you read or heard a story about the possibility venerable, no longer venerated, Sears and stepsister retailer Kmart may file for Chapter 11 bankruptcy protection as early as next Monday.  

Chapter 11 is not a death sentence. It is a reorganization tool meant to provide management with the time and financial freedom to resurrect a dilapidated business. Macy’s passed through Chapter 11. So did Best Buy. Plenty of other retailers, on the other hand, went from Chapter 11 into Chapter 7—liquidation. 

For more than 40 years I have been tracking the misfortunes, and occasional fortunes, of Sears and Kmart as they strived for relevance as societal and competitive realities evolved around them. (Once antagonists, Sears and Kmart became stepsisters as part of financier Eddie Lampert’s design to turn them around, or at least turn a profit for himself, by selling off their assets, including real estate and brands such as Craftsman.)

For 30 of those 40 years as editor and publisher of Chain Store Age, I met with the consecutive line of chairmen and chief executive officers of Sears and Kmart. Each sincerely believed his formula (it was always a he, never a she) contained the magic potion to resurrect a flailing business (that’s not a typo, I meant flailing). Perhaps, if Walmart and Home Depot and Amazon had not been imagined Sears and Kmart might have had a chance. But retailing is an industry that rewards innovation, particularly as it applies to efficient distribution. From better locations to quicker dissemination of products from manufacturer to store shelf to, especially in Amazon’s case, a consumer’s home, competitors outdistanced Sears and Kmart in their ability to meet consumer expectations.  

Sears was built with the mythology of the “Father Knows Best” family in mind. Even its one time diversification strategies—Allstate Insurance and the Discover card—reinforced the fulfillment of household needs. 

Kmart sought to capitalize on a growing middle class seeking cheap consumer goods in convenient self-service stores. 

But if the lady or teenage girl of the house needed something stylish to wear, Sears and Kmart were the last places they would shop. A department store or specialty store or Kohl’s fit the bill. Maybe even Target.  

If the man of the house was going to work on a home improvement project he turned to a local home center retailer, that is, before Home Depot or Lowe’s swallowed up their customers, as well. Electronics sales went to Best Buy. Toys to Toys “R” Us—the Sears Christmas Wish Book succumbed long before Toys “R” Us did. 

Kids could be dressed in Sears or Kmart clothing. Until, that is, they were old enough to voice their own apparel preferences. 

Will Sears and Kmart be salvaged or scuttled? Ask yourself these questions: When was the last time you shopped Sears or Kmart? If one or both stores disappeared, would you notice? Would you miss them?

For most of my professional life Sears and Kmart represented major portions of the copy that flowed through my editor’s desk. I walked their stores across the country. I shopped their stores. As recently as two weeks ago I bought some supplies in Kmart. 

Apart from the yawning gap closing the White Plains Sears and Kmart would have on their respective shopping centers, I cannot say I would miss them. I’d experience some personal nostalgia, but, no, I could not say I would miss them.

Retailing in the Age of Amazon Will Not be Devoid of Human Contact

By now you probably heard or read about Amazon’s pending purchase of Whole Foods Markets, what business analysts are projecting as the tipping point in a retail revolution that may well transform consumer transactions into experiences almost devoid of human interaction. With your smart phone you will be able to circumvent dealing with store personnel, they say, resulting in massive layoffs of workers at the lowest rung of the labor force, many who are unskilled, or elderly, or handicapped, or immigrants with tenuous English language skills, or combinations of the above (https://nyti.ms/2sAPV2D).

Analysts point to the the example of Amazon Go, an experimental store for its Seattle employees. Customers scan their phones upon entering, sensors remotely monitor what they put into their shopping baskets, and exit without the need to stop at a checkout stand and interact with a cashier for their purchases to be charged to their accounts.  

It reminds me of a technology I witnessed back in 1990 at my first EuroShop exhibition of store equipment and technology in Dusseldorf, Germany. A shopping cart haphazardly loaded with products was wheeled through a box the size of a compact refrigerator. Presto, all the items were scanned and ready to be taken home by the customer. So here we are more than a quarter of a century later, nowhere near the promise of yesterday, much like the flying cars we expected to be riding had we believed the future as portrayed in color newspaper inserts of the 1950s and 1960s. Heck, we haven’t even been able to create the flying hover board Marty McFly rode in 1989’s Back to the Future Part II set in 2015. Our earthbound hover boards are fire hazards.

But I digress. The point is, despite Moore’s Law and its corollaries to the rapid adoption of technologies, we are decades away from widespread implementation of Amazon’s futurescan. For several reasons.

Not everyone who enters a store buys something. Not everyone wants their whereabouts and their identities known and cached in some unknown database à la Minority Report. Civil libertarians would have a field day if such technology becomes ubiquitous, implemented without the authorized consent of the public.

Perhaps most socially and culturally relevant, eliminating the human factor in retailing would exacerbate the bifurcation of society already underway. While smart phones are ubiquitous in most neighborhoods, checking accounts and credit/debit cards are not. 

Three times a week I drive into Manhattan along Fifth Avenue, from 142nd Street in Harlem to 98th Street, one of the tonier sections of New York. From 110 Street, where Central Park begins, to 98th Street, Fresh Direct trucks double park as drivers deliver groceries to the wealthy. Above Central Park, over nearly three years I have yet to see a Fresh Direct truck servicing the population.

When visiting a supermarket, I opt for self-scanning in Stop & Shop. Except, not all Stop & Shops in my sphere of buying offer self-scanning. Stores in less desirable neighborhoods do not. Hmmm. I don’t really need to wonder why.

At upscale stores, such as Trader Joe’s, where friendly, knowledgeable service, along with exclusive products, are differentiators, I cannot foresee management abandoning their unique service proposition. 

Stacy Torres, an assistant professor of sociology at the University at Albany, provides real-life examples of why robots replacing humans has its drawbacks as long as we remain social animals: https://nyti.ms/2tVmHbT

The most dynamic growth retailers are deep discounters in food and general merchandise. While Trader Joe’s concentrates on the upscale market, its sister company, Aldi, aims low. It is a German-based no-frills, generic low-priced grocer sweeping across our country. So is Lidl, another German discount grocer with aggressive U.S. expansion plans.

Dollar stores, among them Dollar General and Dollar Tree, though the former is not a true dollar store purveyor as its price points are not restricted to 100 pennies, are the growth vehicles of challenged America. They serve a class of customer that will always be handled by store personnel.

Just imagine going into a Home Depot or Lowe’s. Not that it’s easy to find someone to help you right now, but it is doubtful they will do away with sales floor assistance. Cashiers? Sure, they’ve already eliminated many. But don’t expect to be walking into cavernous buildings barren of staff. The same can be said for electronics stores.

For sure, apparel and department stores are prime candidates for downsized labor costs as long as technology inhibits five-finger discounting from destroying a retailer’s bottom line. Consumer affinity for off-price apparel stores amply demonstrates that help is not necessary on the selling floor. Even Macy’s is now finally embarking on a Backstage off-price concept in an attempt to prolong its corporate lifespan, having let Nordstrom Rack and Saks’ Off Fifth enter the battle with Marshalls, T.J. Maxx and Ross Stores decades ago. 

It has been noted that even as store-based personnel are vanishing the number of warehouse staff is multiplying. Amazon, if not already there, is the number one apparel retailer, with all sales coming from its warehouses or those of its vendors. The reduction of apparel outlets will continue. 

Some retail innovations take years, even decades, to catch on. Thirty-six years ago a retail industry guru named Alton F. Doody decided he had preached enough. During his illustrious career he had counseled such groundbreaking retailers as Walmart and Target, but now he wanted to test an idea for a store of the future: Investment Clothiers. It was a concept where men and women could try on samples of suits, jackets and pants, then leave empty-handed with the knowledge that their selection would be pulled from a warehouse and ready for pickup or delivery the next day. 

Doody chose Cleveland, where I interviewed him, as one of his test markets. Cleveland, after all, was a very corporate city back then. Lots of men and women needed affordable business wear. Alas, the experiment failed.

Doody was decades ahead of his time judging by the positive results enjoyed by Bonobos, a menswear retailer just purchased by Walmart. Begun as an Internet retailer, Bonobos has opened dozens of stores where goods are showcased, customers are measured and fitted, but product is shipped at a later date.

If you’re old enough you might remember a hot concept of the late 1970s and early 1980s—the catalog showroom. Sales from companies like Service Merchandise, Best Products and Luria’s ranked among the top 100 retailers. They displayed hard goods in showrooms, fulfilling customer desires on the spot from extensive behind-the-wall warehouses. 

Okay, sometimes, often actually during high traffic periods, the wait for your purchase to be pulled off the back room shelves was exasperatingly long. And small showrooms meant fewer model options could be offered compared to those available at a traditional discount store. So it was not surprising the catalog showroom concept disappeared when Walmarts and Targets, not to mention Kmarts, appeared at virtually every crossroad. 

What all this means is retailing is among the most evolutionary of enterprises. As The New York Times related in two articles on April 15 (https://nyti.ms/2oJWGwQ and https://nyti.ms/2odz8xo), retailing is evolving faster than perhaps in any previous time. It is too early to seriously consider mass retailing on a robotic scale, but there surely will come a time when a segment, too soon to say how small or large, will accept automated, non human service. I just don’t see its widespread implementation during my transactional lifetime.

Rain or Shine, Donald J. Trump Takes Control Friday

As surely as the sun will rise Friday morning (though rain is in the midday forecast for Washington, D.C.), Donald J. Trump will be sworn in as the 45th president of the United States of America at noon.

Under Trump’s presidency we’re going to see if the government can be run as a business or like a business. There’s a difference. 

To be run as a business requires a balanced budget (even a surplus), which means tough decisions on how revenues are raised and appropriated. The last president to produce a surplus was Bill Clinton. Generally speaking, Republican dogma has called for lower taxes tied to reduced expenditure allocations to social welfare programs. The GOP also advocates diluted, if not eliminated,  protections for consumers, workers, the environment, civil liberties and voting rights.

To run the government like a business implies leeway in strict adherence to capitalism, layering in programs to help the less fortunate and vulnerable. As President Franklin Delano Roosevelt said in his second inaugural address in 1937, “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.”

A few months prior, in the acceptance speech for his renomination, FDR said, “Better the occasional faults of a government that lives in a spirit of charity than the consistent omissions of a government frozen in the ice of its own indifference.” 

Those are compelling thoughts during a time when health care coverage for 20 million people hangs in the balance, when environmental regulations may be stripped away in the name of creating a better business climate, and social service initiatives, such as Medicare and Medicaid, may be severely cut back because Republicans have never been supporters of FDR’s New Deal or Lyndon Baines Johnson’s Great Society programs.

Trump can claim he saved jobs at Carrier (700 or 1,100 depending on whom you believe) and 700 more at Ford, both rescues the result of pressuring those companies to jettison projected job relocations to plants in Mexico. Whether you like Trump or not, you’ve got to be happy for those who will continue to receive paychecks.

But Trump’s bully pulpit to end globalization that kills American jobs, coupled with his determination to Make America Great Again, ignores seismic changes occurring throughout the national and international economies. As much as he might want us to return to a simpler time, progress—the future—will not be stopped.

Take, for example, what is happening in the retail industry. More and more sales are transpiring over the Internet. The industry has known for decades that it is overstored. Macy’s is but one of many chains that will shutter stores. It will close 100 of its 730 units and lay off 10,000 workers. Their jobs are not going south or to some other exotic locale. The jobs are lost to cyberspace. 

King-of-electronic-retailing Amazon says it will hire 100,000 workers, an impressive sum, but hardly as many as the workers at brick and mortar retailers dislocated by the emergence of electronic retailing. 

Retailing is like the taxi/limousine field affected by Uber and Lyft, like the hotel business assaulted by Airbnb, like the newspaper business devastated first by Craig’s List and then by Web news sites, real and fake—it is being intermediated by technology. No amount of jawboning or handwringing will slow the inevitable adaptation of our  economy. 

Going forward we are also going to see how thick is the Trump straw that stirs the drink, or if Mitch McConnell and Paul Ryan, in concert or separately, can sway Republican control of the government. Trump’s stated views on a replacement for Obamacare, for example, differ markedly from Ryan’s and McConnell’s. 

In addition, we will wait to see which John McCain will show up for what probably is his last term in the Senate. Will it be the maverick straight shooter who charmed the electorate in the mid-2000s, or the sycophantic senator who clutched Trump’s coattails to win reelection last year?

It’s politics as usual down in the swamp. After campaigning he would drain the swamp Trump is the head of a muck mired in self-aggrandizement, ethical challenges and broken campaign promises. 

Throughout his campaign he railed against the influence of Wall Street and specifically Goldman Sachs. Yet since the election he has proposed filling three key financial spots with men affiliated with Goldman Sachs and is in favor of reducing constraints on the financial community. 

Politics will color our interpretation of events during the next four years. But hard facts will provide an objective report card on Trump’s vow to “make America great again.”

Trump will be judged on the state of the country and the world in 2020, so here are markers, financial and global, we should check in September 2020 against September 2016, with specific attention to results in the four swing states that chose him over Hillary Clinton—Michigan, Wisconsin, Pennsylvania and Ohio:

*Annual domestic economic growth rate

*Size of national debt

*Size of annual deficit 

*Size of trade imbalance

*Small business growth rate overall 

*Small business growth rates in Michigan, Wisconsin, Pennsylvania and Ohio

*Level of Dow Jones Industrial Averages 

*Unemployment rate overall

*Unemployment rates in Michigan, Wisconsin, Pennsylvania and Ohio

*Black/African-American unemployment rate overall

*Black/African-American unemployment rate (16-19 year olds)

*Labor force participation rate overall

*Labor force participation rate among Black/Afro-Americans

*Jobs created last four years nationally

*Civilian jobs in Michigan, Wisconsin, Pennsylvania and Ohio

*Number of manufacturing jobs nationally

*Number of manufacturing jobs Michigan, Wisconsin, Pennsylvania and Ohio

*Average weekly earnings manufacturing jobs

*Number of construction jobs nationally

*Number of construction jobs Michigan, Wisconsin, Pennsylvania and Ohio

*Average weekly earnings construction jobs

*Number of mining/logging/oil/gas jobs nationally

*Number of mining/logging/oil/gas jobs Michigan, Wisconsin, Pennsylvania and Ohio

*Average weekly earnings mining/logging/oil/gas jobs

*Number of federal government jobs

*Number of government jobs nationally

*Number of uninsured for health care

*Average tax bill for middle class family

*Average national price of gallon of regular gasoline

*Inflation rate

*30 year mortgage rate

*Number of homicides

*Number of hate crimes

*Number of people living in poverty

*Number of military personnel in Iraq, Syria, Afghanistan, Germany, Japan, South Korea

*Status of wars in Syria, Iraq, Afghanistan

*Status of Iran nuclear deal

*Level of imports from China

*Status of North Korea

*Status of Israel-Palestinian conflict

*Number of police officers killed nationally

*Number of minorities killed by police

Four years is a long time to wait for results. But they need not be filled with cowering. If you want to see how Trump and his advisors, particularly Kellyanne Conway, can be handled politely but appropriately, watch how Seth Meyers interviewed her last week. It’s a seminar in solid interviewing/reporting all journalists and TV/radio talk show hosts should study and learn from: https://youtu.be/U_dv5qAsJMU

That said, there is reason to not be comfortable after 12:01 pm Friday. Take the time to read Politico’s roundtable discussion with three of Trump’s biographers about what to expect from the new president: http://www.politico.com/magazine/story/2017/01/trump-biographers-presidency-legitimate-214655

If you made it through the depths of that article, you might not be criticized for believing this is a time to worry and fret. But do not despair. For encouragement read David Leonhardt’s analysis of President Obama’s impact and the difficulty Republicans will have in trying to knock down his legacy: https://nyti.ms/2jAji0t

Beyond that, take heart in Orphan Annie’s ballad to FDR: “The sun will come out tomorrow …”

Summertime Catch-up Post

Summertime and the living is easy, especially when you go more than a week between blog postings. So consider this entry a catch-up for several themes that have rested comfortably within my grey matter …

Summer is a time when journalists resurrect tried and true story lines—where to find the best lobster rolls, the best books for the beach, the best roller coaster ride, and my personal favorite, how old codgers like me learn to swim. Here’s The New York Times version of the last topic: http://nyti.ms/2blnX03.

Swimming isn’t my problem. Staying afloat while treading water is. I can swim for as long as one breadth takes me. In a race with our 37 year old ex-lifeguard son Dan the other day, I was barely a half-body behind him when my lungs gave out midway across the length of the pool. I felt pretty good about my accomplishment considering it was my first time swimming in more than a year. 

I was bouyed (pun intended) by the knowledge I didn’t have to worry about treading water as the pool, at its deepest, was a mere five feet. I think all pool depths should be limited to five feet. It would encourage more non-swimming adults to get into the water with their children and grandchildren. Yes, five feet is too shallow to dive into, but that’s a small inconvenience when considering the positive effect families frolicking in the water would enjoy. And keep in mind that most lap pools are only about four feet deep. If it’s good enough for lap pool enthusiasts it should be good enough for all. 

By the way, I heard on NPR the other week that according to the Red Cross, 54% of Americans could not pass a swim test. Being in this majority is not one of my proud accomplishments. …

Baby Bombers: The young New York Yankees, nicknamed the Baby Bombers, especially Gary Sanchez, have made watching the team fun again. I know many of you aren’t interested in sports, so I won’t elaborate on why I am excited about the rest of this season and coming years of Yankee baseball. …

Are you tired of reading about Donald Trump? As a reader, so am I. As I writer, well, he does make it easy to come up with new story angles. The other day, for example, I was sorting through clothing to be donated and came across, I shamefully admit, a new, white dress shirt bearing the Donald J. Trump brand. It was still in its protective plastic packaging. I must have bought it more than 10 years ago, from Marshalls. Into the discard pile it went. (By the way, Macy’s recently jettisoned Trump-licensed shirts and ties from its merchandise mix after some of his inflammatory remarks.) …

Larry Wilmore no longer has the Nightly Show on Comedy Central to opine on Trump and other election and social news, but in case you missed one of his last commentaries, here’s one I agree with: “Donald Trump is an existential threat to America not because of Islamic terror or even Russia or Iran but rather because he undermines all of our values as a nation.” 

Personalizing the News: Autobahn Driving, GOP Stubbornness, A New Pope and Penney Problems

Under snowy conditions Tuesday in Germany, about 100 vehicles crashed on an autobahn near Frankfurt. No doubt, the snow contributed to the massive crack-up. But I also have no doubt the pattern of German driving contributed, as well.

During my first trip to Germany, in 1996 to attend the EuroShop conference in Dusseldorf, I was invited by the team from Boston Retail to tour some stores. They had rented a car, a large Mercedes sedan, with a driver. I sat in the middle of the rear seat with an unobstructed view of the speedometer. German cars measure speed in kilometers per hour. It’s a simple computation to convert the number into miles per hour. Simply multiply it by 60%. 

When the speedometer needled its way toward 160, I could barely contain my anxiety as I also had an unobstructed view of the traffic in front of us, which at that moment was no more than two car lengths ahead. It wasn’t that our driver was a tailgating daredevil. Every driver on the autobahn was spaced the same one to two car lengths behind the car he was trailing. To travel less than 96 miles per hour would endanger all. 

Of course, that means when a car slows down, because of snow, fog or some other reason, there is a chain reaction should any one vehicle not brake to the precise slower speed. Large pile-ups are common in Germany.

All for Naught? Why do we bother holding elections if the party that loses just regurgitates the same garbage that cost them the election? I’m talking about the Republican budget proposal that would slash Obamacare, transform Medicare and reduce other social services programs without asking any more in taxes from the wealthy. It’s the same hogwash that voters repudiated in the last election just four months ago.

Since losing the presidential election to Barack Obama and seeing their ranks in the House and Senate shrink, Republicans have shown little if any inclination to change their national message and appeal. Their only salvation for the moment is their hammerlock on state governments where they have gerrymandered congressional districts into safe GOP seats, safe, that is, if their candidates hew to the hard right to avoid a Tea Party primary. 

Doubtful we will get a legislative branch of government in the short term that will function to the welfare and benefit of the country rather than the partisan aggrandizement of each congressman.

For Old-Time Vatican Watchers Only: As I listened to CBS News correspondent Allen Pizzey report from Rome over the last several days, I was nostalgic for the hushed, clipped tones of Winston Burdett, the network’s Papal eyes, ears and voice during the 1950s and 1960s. His weathered look gave his Vatican reports a certain ancient authenticity, not that Pizzey’s reporting hasn’t been crisp and informative. (BTW, did you know Burdett was a self-confessed spy for the Soviet Union? Rather than throw him under the bus, Edward R. Murrow had him transferred to CBS’ Rome bureau.)

No need to guess about this—with the election of Francis I Tuesday we will be subjected to a stream of articles on the significance of his elevation from archbishop of Buenos Aires to the 265th successor to Peter as the bishop of Rome. Cardinal Jorge Mario Bergoglio is the first pontiff to be elected from the New World, though he has roots in the Old. Before he was born 76 years ago, his parents emigrated to Argentina from Italy.  

In 2005, Cardinal Bergoglio was the runner-up to Cardinal Ratzinger’s election as Pope Benedict XVI. Yet he was not considered a front-runner this time. As he was chosen on the fifth ballot, perhaps he was a compromise candidate, someone who, in Pizzey’s words, while not a fan of the embattled, scandal-plagued Roman Curia, nevertheless is seen as an ultra-conservative and ultra-orthodox cleric not likely to shake up church dogma on such issues as abortion (which many in Argentina favor, according to Elaine Cobbe of CBS) or celibacy for priests. 

The new pope is said to be a humble Jesuit who lives simply and rides the subway to work. Though the trappings of his new office will require lifestyle changes, his emphasis on eradicating poverty and helping the indigent and less fortunate could have political repercussions in the United States where Republican efforts to limit or eliminate programs to help the poor would undercut his mission.

It was speculated the College of Cardinals would choose someone younger. After all, Francis I is only two years shy of  Benedict’s age when he ascended to the papacy. What’s more, he has only one lung. In his appearance before the crowds in St. Peter’s Square, he appeared restrained, barely cracking a smile. Perhaps exuberance is not appropriate at such a solemn occasion, but as the leader of 1.2 billion Catholics beset by numerous ecclesiastical and administrative issues (some would say scandals), Francis I will have to show more energy than he did from the balcony of St. Peter’s.

In the theater world, second acts are among the hardest to pull off. Third acts, almost impossible.

It’s that way in retailing, too; no less a luminary than Gordon Segal, founder of Crate & Barrel said, “Retailing is theater.” Few retail executives have been able to replicate success after success after success at different companies. 

Ron Johnson, the beleaguered CEO of J.C. Penney, is finding that out the hard way. After a notable career as a vice president of merchandising at Target, Johnson stunned the retail world with his evocation of retail nirvana—he developed the Apple Retail Stores. Apple stores boast among the highest sales per square foot in the industry. While almost all other mall stores can be empty on any given weekday, Apple’s are a beehive of activity. 

For sure, Apple products are key attractions. But equally magnetic have been the store design, the attention to detail and customer service, particularly the Genius Bar Johnson pioneered at the back of each location.

It was inevitable Johnson’s success would lead to his recruitment. Penney, though, is a far cry from Apple. Its products don’t have the cache of Apple’s. Apple concentrates on one category of merchandise. Penney is multi-dimensional, which means its messaging is dispersed across many areas, to many different types of customers. Its stores are way larger. Penney’s store staff are not brand proselytizers the way Apple’s are. Apple almost never ran sales; customers came into the stores because they wanted to. Penney had to rely on sales to generate traffic. When Johnson tried to change that by going to an everyday low price strategy, they stopped coming. (Johnson’s disappointment in that tactic is not unique—Food Lion recently pulled its “no sales” platform, as well.) When Johnson came to Apple, he had a supportive leader in Steve Jobs. They worked off a tabula rasa to create a unique store experience. At Penney, Johnson had to work with 100 years of heritage, arteriosclerosis and all. 

Johnson’s latest misstep is his apparent disregard for an exclusive contract between Macy’s and Martha Stewart. He seemed to encourage placement of Martha Stewart products in Penney stores, the result of which has been embarrassing revelations during a Macy’s lawsuit contesting the Stewart-Penney alliance. I won’t go so far as retail analyst Walter Loeb who suggested “this could be a fatal blow to J.C. Penney.” But I do believe it could signal the end of Johnson’s leadership of Penney. His tenure is not helped by the company’s performance in the fiscal year ended February 1: year over year sales dropped by $4.27 billion; the company lost $985 million compared to a loss of $152 million the year before. Share price tumbled by 60%; 2,200 workers were laid off last week.