7 Reasons Fashion Retailers Are Going Out of Style 

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By Hadari Oshri

You may have heard of retail fashion companies going out of business or filing for bankruptcy, but do you know why?

I grew up in Israel and all the clothes my mother bought me were in boring, muted colors. When I was in sixth grade, I decided to take a secret job washing dishes and saved up enough money to buy a new outfit, head to toe. When I walked into class wearing a bright cardigan with light blue slacks and fresh white pumps, the whole class stopped. I smiled from ear to ear. I looked great and I felt even greater! This was the moment I knew that my life’s passion was fashion.

Fast forward 15 years. I moved to America and opened seven fashion retail stores, including some in the most sought out locations. But I ended up getting rid of them all.


Because I saw the writing on the wall.

Now my stores are online and my brand sells all around the world. The future of fashion is not in retail stores. Here are seven reasons why you should stay far from brick and mortar.

The Wheel Is Gone

As an industry, not much has changed in 70 years. Styles come and go but the core day-to-day business has stayed the same. For generations, people in the business of fashion simply did the same thing that their family had done. There was no need to re-invent the wheel.

But now, there is no wheel. Technology and consumer buying behavior are shaking the fashion industry to its core.

Ever heard of a company called Uber? They started to get attention as they disrupted the transportation industry. Few people thought that it could become the biggest private company in the world. They took an outdated idea and made a new concept that was unheard of 10 years ago. Airbnb has been doing the same to the hotel industry. You simply can’t rely anymore on how things were done.

Off Point With Price Points

People will make purchases without giving them much thought if items are between around $19.99 to $24.99. This is why retailers like Zuley and Stich Fix (which just went public) have been so successful. They are priced right. Retail stores still stock a variety of price points in hopes of selling more products to a wider group of customers, but those customers are not buying the higher priced items.

The Economy of Loyalty

The numbers just don’t work out anymore. The internet has leveled the playing field, and the store with the most physical locations no longer wins. The companies that are strategic with their online marketing have a larger reach than the biggest chain of stores found across the country in empty malls.

In the last year, BCBG, Nasty Gal and Payless went bankrupt. Nasty Gal was reportedly spending excessive amounts on advertising and marketing to acquire each new customer, most whom never became loyal. ModCloth was bought out by Walmart, which was looking for a fresh new line for a hardcore millennial audience. ModCloth customers were not happy about this sellout and many turned away from the brand.

Window Shopping Is Real

When I go to stores, I find fun pieces, then head to the dressing room. But I usually leave the store empty-handed. Consumers still like to see, feel and try on clothes, but we just don’t like to pay full price. Millennials who are internet savvy know that they can walk into a store, find something they like, then pull out their phone and find the same piece or something similar online for cheaper.

Celebrity Nation

Trends and styles set by Kardashians age with the reality stars. You have to come to terms with the fact that we live in a world where anyone can become a celebrity. The next Kardashian is not at your retail store. They are on Instagram garnering millions of followers and setting their own trends that the fashion industry will have to catch up to. Online stores can better tune in to bloggers, YouTubers, Instagram models and social influencers as the trends unfold.

The Shopping Experience Is Expensive

The malls are out of vogue with the millennials and older generations are spending less time browsing in department stores and spending more time sipping coffee with friends. Time is money, and going shopping takes a lot of time. The idea of traffic, finding a parking spot and walking the lengths of a mall are not as appealing or convenient as searching, scrolling and swiping on your phone.

I needed new leggings the other day. And instead of going to the Victoria Secret in Santa Monica, I got them on Amazon.

The Burden of Making Returns

A barrier to online shopping used to be the challenges of returning purchased items if they didn’t fit. Online retailers have solved that problem, and shoppers are more and more confident about the purchase process because of the ease in returning items that they purchase.

Retail stores are at a major disadvantage because customers have to make a trip back to the store to return items. I don’t know about you, but sometimes it takes me forever to find the time to get back to a store and return something. The internet retailers are simply doing a better job.

Fashion is more than clothes, designs and seasonal colors. It is a full industry that has changed and will continue to change. Though much speculation surrounds what the changes will be, there is no denying that one of the biggest changes is the death of traditional retail stores.

So what happens next?

Now comes the time for fashion industry to grow, change and evolve.


Hadari Oshri is CEO of Xehar.com, a fashion tech company for curvy millennials with a focus on community and empowering women through building confidence.