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Early Adopters: Who needs Those…
As technology spreads faster and product cycles get shorter, late
adopters are an increasingly numerous and influential consumer
group
IPhones, Tablets and FitBits are examples of technology late
adopters are slow to embrace. WSJ's Charlie Wells joins Lunch
Break with Tanya Rivero and discusses reasons why they wait
to buy new gadgets and how companies market to them. Photo:
iStock/Cindy Singleton
By
Charlie Wells
Updated Jan. 26, 2016 4:49 p.m. ET
Dustin Schinn still isn’t sure if he wants an iPhone. He once
gave a friend cash to order an Uber for him because he still
hasn’t downloaded the car-service app. A friend recently tried
to get him onto Tinder, the mobile dating service, but had to
install an app called Dater, because Mr. Schinn is still using a
Blackberry.
Mr. Schinn, a 27-year-old Washington, D.C., resident, is a late
adopter. And he’s proud of it.
“People make fun of me,” Mr. Schinn says. “But I often don’t
feel the need for these new technologies...They require you to
sort of constantly adapt to something new, and I often feel this
is just unnecessary.”
Many people are late adopters or know one. When it comes to
technological adoption, as much as 16% of the population is
considered to be in the “laggard” category, with another 34%
encompassing a “late majority,” according to a landmark 1962
study about the spread of new ideas and technology by the late
University of New Mexico professor Everett Rogers. His
theories have since been widely applied to everything from
laptop computers to mobile phones.
Technical definitions of the term “late adopter” vary. Loosely
speaking, it is a person who buys a product or service after half
of a population has done so. Late adopters tend to share certain
characteristics: They are skeptical of marketing and tend to
point out differences between advertised claims and the actual
product. They often value a product’s core attributes, ignoring
the bells and whistles intended to upsell the latest model. They
may not try something new until weeks, months or even years
after the crowd has moved on.
The Paths of Late Adopters (scroll down to continue
reading)
From left: Dustin Schinn; Ryan Fissel; Tnder; Uber
A 19th century French sociologist, Gabriel Tarde, explored how
technologies spread as a result of imitation of the elite. In his
day, late adopters were pigeon-holed as less educated, from a
lower social class and with less purchasing power than
innovators and early adopters. Terry Clark, professor of
sociology at the University of Chicago who has written on
Tarde, says technological and societal changes mean that
today’s late adopters exist in all income, educational and social
groups.
Ryan Fissel, a 35-year-old Columbus, Ohio, resident, is a late
adopter; he tried Uber for the first time last year. He says he
doesn’t really have financial reasons for waiting for the latest
Hollywood releases to come to the Redbox DVD-rental before
seeing them. It’s just that he likes to do his research. With an
academic background in the humanities, Mr. Fissel says he
enjoys methodically researching films and what the critics have
to say—which he often doesn’t have time to do while the
movies are still at the megaplex. “The last movie I saw in
theaters was ‘The Hangover: Part II,’ ” he says. That was in
2011.
What separates late adopters and early adopters is that they each
perceive products and services through a different lens, says
Sara Jahanmir, a doctoral researcher at the Nova School of
Business and Economics in Lisbon and a research affiliate of
the Massachusetts Institute of Technology. Early adopters may
have an emotional response to the release of a new product or
service—and line up to buy the latest iPhone or Xbox. “It takes
a lot of time to change late adopters. But once they’ve done all
that research, and once they are convinced about a product, they
are going to stay for a long time.”
That happened to Wes Platt, a 49-year-old Durham, N.C.,
videogame designer who says he is a “serial” late adopter. He
mocked Facebookfor a long time before joining. He’s new to
Spotify, having been a loyal iTunes listener for years. His father
was the one who finally got him to join Twitter.
When he first heard about Fitbit wearable fitness trackers, Mr.
Platt remained true to form, even as his friends were posting
their Fitbit step counts on social media. “At first, I thought it
was sort of ridiculous—a little too Big Brother-y for me,” Mr.
Platt says.
But he cracked when he saw a need: His wife wanted him to get
fit, and he began to see how automating the process of tracking
exercise could help him do more. Now, the couple and their
friends compete in daily and weekly Fitbit challenges. For his
birthday last year, Mr. Platt upgraded from the clip-on model to
the wrist-based device.
Late adopters can seem more conspicuous than ever in a world
where product cycles are speeding up for everything from
phones to refrigerators. “Innovation has pushed up the adoption
curve,” says Grant McCracken, a cultural anthropologist who
has done behavioral research on Netflixviewers. There are so
many things to adopt now, he says, “a lot of people have
effectively bowed out of the innovation game.”
Late adopters are emerging as an untapped marketing force,
with important things to tell companies about the role new
products should play. Because they tend to be highly critical,
late adopters can be useful to companies perfecting their wares.
In a 2015 study published in the Journal of Engineering and
Technology Management, Ms. Jahanmir and a co-author
outlined their “Lag-User Method,” a seven-step process for
cultivating product ideas from late adopters.
Late adopters tend to want simple, cost-effective products
focused on specific uses, the researchers found. By listening to
late adopters of the old version of a product, developers can
create a new version that is quicker to be adopted.
Blake Rector, a Portland, Ore., graduate student, waited until
this past Christmas to buy his first smartphone. Over the years,
as friends and family transitioned to larger devices with Internet
access, the 33-year-old says he cherished his standard
Samsungflip phone.
For the most part, he got along fine, he thought. His tiny phone
was unobtrusive in his pocket, the battery lasted four days on a
single charge, and he didn’t have all those distractions in his
busy academic schedule.
But Mr. Rector felt the pang of adopting late in a world
dominated by mobile Internet. With his wife scheduled to return
home from a two-week trip to Africa, Mr. Rector and his flip
phone headed to the airport. Hours passed, and he didn’t hear
his wife. He began to worry but wasn’t able to find out much
about his wife’s flight status.
“Everyone just expected that I would have a smartphone,” he
says. “I tried the people at the ticket counter and they just
expected I could look it up myself.”
He ended up asking a flight attendant who was taking a break in
a coffee shop if he could borrow a few bytes of data. Only after
looking up flight details on the stranger’s smartphone did he
realize that he had come to the airport a day early.
END
Link to video on article titled “Early Adopters, Who Needs
Those…”
http://on.wsj.com/1S98geo
Beyond Bankruptcy: How Failed Stores Come Back Online
Fashion brands are finding that there is life after liquidation—
but only if they act fast… (scroll down to continue reading)
BCBG Max Azria, which filed for bankruptcy in February, this
week completed the sale of its wholesale and e-commerce
operations to Global Brands Group Holding. Photo: Richard B.
Levine/Zuma Press
By
Erica E. Phillips and
Stephanie Gleason
Aug. 4, 2017 7:00 a.m. ET
Bankrupt fashion labels are finding that there is life after
liquidation—but only if resurrection happens quickly.
Investors snapped up Wet Seal, American Apparel and The
Limited, betting fickle consumers who long ago stopped visiting
their shops would flock to new online-only storefronts.
Companies like Onestop Internet Inc., which handles orders for
dozens of websites out of a warehouse in Compton, Calif., make
it easier for former brick-and-mortar chains to transition to
online-only fashion labels.
Selling apparel online can be less costly, according to Onestop.
For a pair of premium jeans, for example, the cost of fulfillment
operations, technology systems, shipping and free returns is less
per item than brick-and-mortar costs including rent, payroll and
distribution, the company says.
But a successful transition requires racing against the clock. A
once-hot brand like American Apparel can fetch tens of millions
of dollars in a bankruptcy auction, but its value quickly drops
after stores close. New owners must rush to line up new
designers and manufacturers, and set up distribution networks
geared toward shipping to homes before shoppers move on.
(scroll down to continue reading)
“There needs to be a sense of urgency,” said Ramez Toubassy,
president of the brands division at Gordon Brothers Group, a
retail investor and liquidator.
Gordon Brothers purchased Wet Seal for $3 million in March,
the same month that the teen retailer sold its inventory and
closed the last of its stores, and is now working to restart Wet
Seal’s manufacturing. It aims to open an online store in the fall.
With so many retailers in decline, a handful of firms have
emerged that specialize in transforming failed brick-and-mortar
chains into online stores.
Private-equity firm Sycamore Partners in 2014 hired Newmine
LLC to relaunch Coldwater Creek, a fashion brand that had
closed that year but retained a following among middle-aged
women. Clothes were available for sale online four months later
after a “fast-paced, SWAT-team-like” effort, said Newmine
Chief Executive Navjit Bhasin.
After a liquidation, “all that’s left is the brand name and the
customer following,” Mr. Bhasin said. “If it takes 2½ years to
revive, the customer is gone.”
Behind the scenes, logistics experts must ensure that the brand
can deliver like an e-commerce outfit. That can mean
transforming a legacy retailer’s warehouses—often set up to
deliver large amounts of merchandise to stores—to more nimble
operations where workers can pick out individual garments and
pack them for shipping, then get them delivered quickly to
customers’ homes. Arranging the fastest shipping methods and
negotiating lower rates with United Parcel Service Inc. and
FedEx Corp. is key.
Onestop will handle orders for BCBG Max Azria Group LLC,
which filed for bankruptcy in February and this week completed
the sale of its wholesale and e-commerce operations to Global
Brands Group Holding Ltd. for $23 million. Marquee Brands
LLC is paying $106 million for BCBG’s intellectual property
assets.
Brand owners “need to extract the value of the intellectual
property [but] they don’t want to have to worry about customer
service, digital marketing and web developers,” said Daniel
Brewster, a senior vice president at Onestop.
American Apparel’s new owners are planning the brand’s
online-only future even as its liquidation is under way.
Canadian T-shirt wholesaler Gildan Activewear Inc., which paid
$88 million for the brand name and some manufacturing
equipment, is aiming to relaunch American Apparel this
summer—though the brand’s website currently is just a landing
page.
Gildan opened an office in Los Angeles, hiring a few American
Apparel marketers to keep the brand on “life support,” as Garry
Bell, Gildan’s vice president of marketing and communications,
put it. The company has already revived American Apparel’s
wholesale business, lining up suppliers for a “Made in the USA”
line and a less expensive one to be manufactured in South
America.
“It’s really important for us to do that as quickly as we can,”
Mr. Bell said.
Sycamore, which owns Coldwater Creek, paid $27 million for
Limited Stores Co. after the retailer closed all 250 of its mall-
based stores, temporarily shut down its online shop and filed for
bankruptcy protection in January. A spokesman for Sycamore
declined to comment, though the company said in February that
it “plans to reintroduce the brand to the marketplace at a later
date.”
Authentic Brands and Gordon Brothers teamed up with a pair of
mall owners, Simon Property Group and General Growth
Properties Inc., to invest $243.3 million to acquire Aéropostale
Inc. after the brand filed for bankruptcy protection. The move
will keep the brand available in more than 400 North American
stores.
Other failing mall chains are still working out how to stay alive.
Abercrombie & Fitch Co. tried to sell itself but those efforts
recently stalled, leaving the apparel retailer to continue trying
to right its business on its own. True Religion Apparel Inc.
launched a bankruptcy turnaround effort in July, but says it
plans to keep many stores up and running through the process.
Even a smooth relaunch is no guarantee of a comeback.
Linens ’n’ Things has passed between three owners since it
filed for bankruptcy protection in 2008. The home-goods
chain’s current owner, Sequential Brands, reported $155.5
million in revenue last year across all of its businesses,
compared with $2.7 billion for Linens ‘n’ Things alone in 2005.
Systemax , a business-to-business electronics company, bought
Circuit City’s assets in 2009 and folded it into its direct
business before selling off the brand last year.
Companies that buy brands after liquidation often see moving
online as a temporary fix.
Gordon Brothers’ Mr. Toubassy said he aims for Wet Seal to be
sold in department stores. And Authentic Brands, which bought
Juicy Couture for $195 million in 2013, sells the brand’s
merchandise in department stores and boutiques as well as
online.
“I don’t think that you can buy a brand today and just go
strictly online,” said Jamie Salter, chief executive at Authentic
Brands, which also owns lingerie seller Frederick’s of
Hollywood. “When you can touch and feel the brand inside the
stores, when you can see it, it gives it that heartbeat.”
Corrections & Amplifications
Onestop Internet Inc. will start handling orders for BCBG Max
Azria Group LLC in 2018. An earlier version of this article
incorrectly said Onestop already was handling orders for BCBG.
End
Beyond Bankruptcy: How Failed Stores Come Back Online
By Erica E. Phillips and Stephanie Gleason | Aug 05, 2017
TOPICS: Bankruptcy, Brand Management, Business Models,
Costs, E-Commerce
SUMMARY: You may recognize some of the brands in this
article. One thing they have in common is that their companies
went bankrupt and closed stores, but the brand lives on.
Bankruptcy might mean the end of a company, but not the end
of a brand. There is value to a recognized brand even if the
business model for selling it was not a success. Selling apparel
online costs less, although it is also interesting to note
differences in the kinds of costs as shown in the diagram "A
Leg Up". A brand from a bankrupt company in the retail
clothing industry has value, but that value depreciates as time
passes if e-commerce sales do not begin quickly. Transitioning
to entirely online sales has challenges that include lining up
new designers and manufacturers and setting up distribution
networks for ship-to-home sales. Companies that buy brands
after bankruptcy view online only sales as a short-term solution.
The goal is to return brands to department stores and boutiques.
CLASSROOM APPLICATION: The story of bankrupt brands
that hope to find new life as e-commerce companies helps show
the value of brands and innovative ways to transform them after
bankruptcy. Although initial efforts involve creating online-
only brands, the long-term plan is to return them to retail stores.
The long list of brands includes many familiar ones that have
recognition with consumers; Wet Seal, BCBG Max Azria,
American Apparel, Coldwater Creek and The Limited. These are
brands that had brand-specific stores and those locations all
closed because of bankruptcy. The online-only value of the
brands exists if they can quickly begin selling via e-commerce.
As time passes after stores close and before e-commerce sales
begin, the value of the brand declines. The diagram "A Leg Up"
is way for students to understand and compare e-commerce
costs with those of brick-and-mortar stores. There are categories
of expenses in each not matched by the other distribution
channel, but the biggest number to note is the $27 in store
payroll not matched in e-commerce. The diagram can be the
foundation of a lengthy discussion about the differences in these
two business models.
QUESTIONS: (Scroll down to see questions…)
1. Which brands, if any, did you recognize any in the story?
What similarities and differences are there with these brands?
2. List the breakdown of costs for offline (retail store) sales of a
pair of jeans and compare these costs to the costs for a pair of
jeans sold only online.
3. List the challenges new owners of brands face as they try to
transform the brand to e-commerce (selling online only).
4. In your opinion, do you think the long-term goal of selling
brands in retail stores is realistic? Why or why not?
5. Why does the value of a brand drop quickly after bankruptcy?
End
Marketing: Forget Early Adopters, These People Like to be Late
by: Charlie Wells
Jan 27, 2016
TOPICS: Marketing
SUMMARY: Not everyone is standing in line for the latest
iPhone outside the Apple store. Some consumers are late
adopters and resist buying the latest version of technology. The
key idea for companies is that this group can provide insights to
help create products that are more quickly adopted in the future.
They may be late to adopt a technology, but once they do they
stay.
CLASSROOM APPLICATION: Most are familiar with phrase
"early adopters" which makes this story interesting because of
its focus on late adopters. This term could be used to describe
16% of the population with another 34% in the laggard
category. Late adopters are skeptical about marketing and value
the core attributes of products. The good news for companies is
that once they are convinced about a product, they will stay for
a long time. Late adopters can be useful to companies because
they can provide product ideas. Understanding what drives late
adopters can lead to new versions of products that will be more
quickly adopted. The examples from the article provide insight
into what motivates late adopters to finally try new products.
QUESTIONS:
1. Define the following terms: late adopter, early adopter and
late majority. Which category describes you?
2. Compare and contrast the decision process for early as
compared to late adopters.
3. Use the examples from the article to discuss how late
adopters eventually move on to new products.
4. Discuss the "Lag-User Method" and how it might help
companies tap the potential of later adopters.
END

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Early Adopters Who needs Those…As technology spreads faster and.docx

  • 1. Early Adopters: Who needs Those… As technology spreads faster and product cycles get shorter, late adopters are an increasingly numerous and influential consumer group IPhones, Tablets and FitBits are examples of technology late adopters are slow to embrace. WSJ's Charlie Wells joins Lunch Break with Tanya Rivero and discusses reasons why they wait to buy new gadgets and how companies market to them. Photo: iStock/Cindy Singleton By Charlie Wells Updated Jan. 26, 2016 4:49 p.m. ET Dustin Schinn still isn’t sure if he wants an iPhone. He once gave a friend cash to order an Uber for him because he still hasn’t downloaded the car-service app. A friend recently tried to get him onto Tinder, the mobile dating service, but had to install an app called Dater, because Mr. Schinn is still using a Blackberry. Mr. Schinn, a 27-year-old Washington, D.C., resident, is a late adopter. And he’s proud of it. “People make fun of me,” Mr. Schinn says. “But I often don’t feel the need for these new technologies...They require you to sort of constantly adapt to something new, and I often feel this is just unnecessary.” Many people are late adopters or know one. When it comes to technological adoption, as much as 16% of the population is considered to be in the “laggard” category, with another 34% encompassing a “late majority,” according to a landmark 1962 study about the spread of new ideas and technology by the late University of New Mexico professor Everett Rogers. His theories have since been widely applied to everything from laptop computers to mobile phones. Technical definitions of the term “late adopter” vary. Loosely speaking, it is a person who buys a product or service after half
  • 2. of a population has done so. Late adopters tend to share certain characteristics: They are skeptical of marketing and tend to point out differences between advertised claims and the actual product. They often value a product’s core attributes, ignoring the bells and whistles intended to upsell the latest model. They may not try something new until weeks, months or even years after the crowd has moved on. The Paths of Late Adopters (scroll down to continue reading) From left: Dustin Schinn; Ryan Fissel; Tnder; Uber A 19th century French sociologist, Gabriel Tarde, explored how technologies spread as a result of imitation of the elite. In his day, late adopters were pigeon-holed as less educated, from a lower social class and with less purchasing power than innovators and early adopters. Terry Clark, professor of sociology at the University of Chicago who has written on Tarde, says technological and societal changes mean that today’s late adopters exist in all income, educational and social groups. Ryan Fissel, a 35-year-old Columbus, Ohio, resident, is a late adopter; he tried Uber for the first time last year. He says he doesn’t really have financial reasons for waiting for the latest Hollywood releases to come to the Redbox DVD-rental before seeing them. It’s just that he likes to do his research. With an academic background in the humanities, Mr. Fissel says he enjoys methodically researching films and what the critics have to say—which he often doesn’t have time to do while the movies are still at the megaplex. “The last movie I saw in theaters was ‘The Hangover: Part II,’ ” he says. That was in 2011. What separates late adopters and early adopters is that they each perceive products and services through a different lens, says Sara Jahanmir, a doctoral researcher at the Nova School of Business and Economics in Lisbon and a research affiliate of the Massachusetts Institute of Technology. Early adopters may
  • 3. have an emotional response to the release of a new product or service—and line up to buy the latest iPhone or Xbox. “It takes a lot of time to change late adopters. But once they’ve done all that research, and once they are convinced about a product, they are going to stay for a long time.” That happened to Wes Platt, a 49-year-old Durham, N.C., videogame designer who says he is a “serial” late adopter. He mocked Facebookfor a long time before joining. He’s new to Spotify, having been a loyal iTunes listener for years. His father was the one who finally got him to join Twitter. When he first heard about Fitbit wearable fitness trackers, Mr. Platt remained true to form, even as his friends were posting their Fitbit step counts on social media. “At first, I thought it was sort of ridiculous—a little too Big Brother-y for me,” Mr. Platt says. But he cracked when he saw a need: His wife wanted him to get fit, and he began to see how automating the process of tracking exercise could help him do more. Now, the couple and their friends compete in daily and weekly Fitbit challenges. For his birthday last year, Mr. Platt upgraded from the clip-on model to the wrist-based device. Late adopters can seem more conspicuous than ever in a world where product cycles are speeding up for everything from phones to refrigerators. “Innovation has pushed up the adoption curve,” says Grant McCracken, a cultural anthropologist who has done behavioral research on Netflixviewers. There are so many things to adopt now, he says, “a lot of people have effectively bowed out of the innovation game.” Late adopters are emerging as an untapped marketing force, with important things to tell companies about the role new products should play. Because they tend to be highly critical, late adopters can be useful to companies perfecting their wares. In a 2015 study published in the Journal of Engineering and Technology Management, Ms. Jahanmir and a co-author outlined their “Lag-User Method,” a seven-step process for cultivating product ideas from late adopters.
  • 4. Late adopters tend to want simple, cost-effective products focused on specific uses, the researchers found. By listening to late adopters of the old version of a product, developers can create a new version that is quicker to be adopted. Blake Rector, a Portland, Ore., graduate student, waited until this past Christmas to buy his first smartphone. Over the years, as friends and family transitioned to larger devices with Internet access, the 33-year-old says he cherished his standard Samsungflip phone. For the most part, he got along fine, he thought. His tiny phone was unobtrusive in his pocket, the battery lasted four days on a single charge, and he didn’t have all those distractions in his busy academic schedule. But Mr. Rector felt the pang of adopting late in a world dominated by mobile Internet. With his wife scheduled to return home from a two-week trip to Africa, Mr. Rector and his flip phone headed to the airport. Hours passed, and he didn’t hear his wife. He began to worry but wasn’t able to find out much about his wife’s flight status. “Everyone just expected that I would have a smartphone,” he says. “I tried the people at the ticket counter and they just expected I could look it up myself.” He ended up asking a flight attendant who was taking a break in a coffee shop if he could borrow a few bytes of data. Only after looking up flight details on the stranger’s smartphone did he realize that he had come to the airport a day early. END Link to video on article titled “Early Adopters, Who Needs Those…” http://on.wsj.com/1S98geo Beyond Bankruptcy: How Failed Stores Come Back Online Fashion brands are finding that there is life after liquidation— but only if they act fast… (scroll down to continue reading)
  • 5. BCBG Max Azria, which filed for bankruptcy in February, this week completed the sale of its wholesale and e-commerce operations to Global Brands Group Holding. Photo: Richard B. Levine/Zuma Press By Erica E. Phillips and Stephanie Gleason Aug. 4, 2017 7:00 a.m. ET Bankrupt fashion labels are finding that there is life after liquidation—but only if resurrection happens quickly. Investors snapped up Wet Seal, American Apparel and The Limited, betting fickle consumers who long ago stopped visiting their shops would flock to new online-only storefronts. Companies like Onestop Internet Inc., which handles orders for dozens of websites out of a warehouse in Compton, Calif., make it easier for former brick-and-mortar chains to transition to online-only fashion labels. Selling apparel online can be less costly, according to Onestop. For a pair of premium jeans, for example, the cost of fulfillment operations, technology systems, shipping and free returns is less per item than brick-and-mortar costs including rent, payroll and distribution, the company says. But a successful transition requires racing against the clock. A once-hot brand like American Apparel can fetch tens of millions of dollars in a bankruptcy auction, but its value quickly drops after stores close. New owners must rush to line up new designers and manufacturers, and set up distribution networks geared toward shipping to homes before shoppers move on. (scroll down to continue reading) “There needs to be a sense of urgency,” said Ramez Toubassy, president of the brands division at Gordon Brothers Group, a retail investor and liquidator. Gordon Brothers purchased Wet Seal for $3 million in March,
  • 6. the same month that the teen retailer sold its inventory and closed the last of its stores, and is now working to restart Wet Seal’s manufacturing. It aims to open an online store in the fall. With so many retailers in decline, a handful of firms have emerged that specialize in transforming failed brick-and-mortar chains into online stores. Private-equity firm Sycamore Partners in 2014 hired Newmine LLC to relaunch Coldwater Creek, a fashion brand that had closed that year but retained a following among middle-aged women. Clothes were available for sale online four months later after a “fast-paced, SWAT-team-like” effort, said Newmine Chief Executive Navjit Bhasin. After a liquidation, “all that’s left is the brand name and the customer following,” Mr. Bhasin said. “If it takes 2½ years to revive, the customer is gone.” Behind the scenes, logistics experts must ensure that the brand can deliver like an e-commerce outfit. That can mean transforming a legacy retailer’s warehouses—often set up to deliver large amounts of merchandise to stores—to more nimble operations where workers can pick out individual garments and pack them for shipping, then get them delivered quickly to customers’ homes. Arranging the fastest shipping methods and negotiating lower rates with United Parcel Service Inc. and FedEx Corp. is key. Onestop will handle orders for BCBG Max Azria Group LLC, which filed for bankruptcy in February and this week completed the sale of its wholesale and e-commerce operations to Global Brands Group Holding Ltd. for $23 million. Marquee Brands LLC is paying $106 million for BCBG’s intellectual property assets. Brand owners “need to extract the value of the intellectual property [but] they don’t want to have to worry about customer service, digital marketing and web developers,” said Daniel Brewster, a senior vice president at Onestop. American Apparel’s new owners are planning the brand’s online-only future even as its liquidation is under way.
  • 7. Canadian T-shirt wholesaler Gildan Activewear Inc., which paid $88 million for the brand name and some manufacturing equipment, is aiming to relaunch American Apparel this summer—though the brand’s website currently is just a landing page. Gildan opened an office in Los Angeles, hiring a few American Apparel marketers to keep the brand on “life support,” as Garry Bell, Gildan’s vice president of marketing and communications, put it. The company has already revived American Apparel’s wholesale business, lining up suppliers for a “Made in the USA” line and a less expensive one to be manufactured in South America. “It’s really important for us to do that as quickly as we can,” Mr. Bell said. Sycamore, which owns Coldwater Creek, paid $27 million for Limited Stores Co. after the retailer closed all 250 of its mall- based stores, temporarily shut down its online shop and filed for bankruptcy protection in January. A spokesman for Sycamore declined to comment, though the company said in February that it “plans to reintroduce the brand to the marketplace at a later date.” Authentic Brands and Gordon Brothers teamed up with a pair of mall owners, Simon Property Group and General Growth Properties Inc., to invest $243.3 million to acquire Aéropostale Inc. after the brand filed for bankruptcy protection. The move will keep the brand available in more than 400 North American stores. Other failing mall chains are still working out how to stay alive. Abercrombie & Fitch Co. tried to sell itself but those efforts recently stalled, leaving the apparel retailer to continue trying to right its business on its own. True Religion Apparel Inc. launched a bankruptcy turnaround effort in July, but says it plans to keep many stores up and running through the process. Even a smooth relaunch is no guarantee of a comeback. Linens ’n’ Things has passed between three owners since it filed for bankruptcy protection in 2008. The home-goods
  • 8. chain’s current owner, Sequential Brands, reported $155.5 million in revenue last year across all of its businesses, compared with $2.7 billion for Linens ‘n’ Things alone in 2005. Systemax , a business-to-business electronics company, bought Circuit City’s assets in 2009 and folded it into its direct business before selling off the brand last year. Companies that buy brands after liquidation often see moving online as a temporary fix. Gordon Brothers’ Mr. Toubassy said he aims for Wet Seal to be sold in department stores. And Authentic Brands, which bought Juicy Couture for $195 million in 2013, sells the brand’s merchandise in department stores and boutiques as well as online. “I don’t think that you can buy a brand today and just go strictly online,” said Jamie Salter, chief executive at Authentic Brands, which also owns lingerie seller Frederick’s of Hollywood. “When you can touch and feel the brand inside the stores, when you can see it, it gives it that heartbeat.” Corrections & Amplifications Onestop Internet Inc. will start handling orders for BCBG Max Azria Group LLC in 2018. An earlier version of this article incorrectly said Onestop already was handling orders for BCBG. End Beyond Bankruptcy: How Failed Stores Come Back Online By Erica E. Phillips and Stephanie Gleason | Aug 05, 2017 TOPICS: Bankruptcy, Brand Management, Business Models, Costs, E-Commerce SUMMARY: You may recognize some of the brands in this article. One thing they have in common is that their companies went bankrupt and closed stores, but the brand lives on. Bankruptcy might mean the end of a company, but not the end of a brand. There is value to a recognized brand even if the business model for selling it was not a success. Selling apparel online costs less, although it is also interesting to note
  • 9. differences in the kinds of costs as shown in the diagram "A Leg Up". A brand from a bankrupt company in the retail clothing industry has value, but that value depreciates as time passes if e-commerce sales do not begin quickly. Transitioning to entirely online sales has challenges that include lining up new designers and manufacturers and setting up distribution networks for ship-to-home sales. Companies that buy brands after bankruptcy view online only sales as a short-term solution. The goal is to return brands to department stores and boutiques. CLASSROOM APPLICATION: The story of bankrupt brands that hope to find new life as e-commerce companies helps show the value of brands and innovative ways to transform them after bankruptcy. Although initial efforts involve creating online- only brands, the long-term plan is to return them to retail stores. The long list of brands includes many familiar ones that have recognition with consumers; Wet Seal, BCBG Max Azria, American Apparel, Coldwater Creek and The Limited. These are brands that had brand-specific stores and those locations all closed because of bankruptcy. The online-only value of the brands exists if they can quickly begin selling via e-commerce. As time passes after stores close and before e-commerce sales begin, the value of the brand declines. The diagram "A Leg Up" is way for students to understand and compare e-commerce costs with those of brick-and-mortar stores. There are categories of expenses in each not matched by the other distribution channel, but the biggest number to note is the $27 in store payroll not matched in e-commerce. The diagram can be the foundation of a lengthy discussion about the differences in these two business models. QUESTIONS: (Scroll down to see questions…) 1. Which brands, if any, did you recognize any in the story? What similarities and differences are there with these brands? 2. List the breakdown of costs for offline (retail store) sales of a pair of jeans and compare these costs to the costs for a pair of
  • 10. jeans sold only online. 3. List the challenges new owners of brands face as they try to transform the brand to e-commerce (selling online only). 4. In your opinion, do you think the long-term goal of selling brands in retail stores is realistic? Why or why not? 5. Why does the value of a brand drop quickly after bankruptcy? End Marketing: Forget Early Adopters, These People Like to be Late by: Charlie Wells Jan 27, 2016 TOPICS: Marketing SUMMARY: Not everyone is standing in line for the latest iPhone outside the Apple store. Some consumers are late adopters and resist buying the latest version of technology. The key idea for companies is that this group can provide insights to help create products that are more quickly adopted in the future. They may be late to adopt a technology, but once they do they stay. CLASSROOM APPLICATION: Most are familiar with phrase "early adopters" which makes this story interesting because of its focus on late adopters. This term could be used to describe 16% of the population with another 34% in the laggard category. Late adopters are skeptical about marketing and value the core attributes of products. The good news for companies is that once they are convinced about a product, they will stay for
  • 11. a long time. Late adopters can be useful to companies because they can provide product ideas. Understanding what drives late adopters can lead to new versions of products that will be more quickly adopted. The examples from the article provide insight into what motivates late adopters to finally try new products. QUESTIONS: 1. Define the following terms: late adopter, early adopter and late majority. Which category describes you? 2. Compare and contrast the decision process for early as compared to late adopters. 3. Use the examples from the article to discuss how late adopters eventually move on to new products. 4. Discuss the "Lag-User Method" and how it might help companies tap the potential of later adopters. END