The Decline of Lucky Brand Dungarees. What Happened? 10 Marketing Tips

The Decline of Lucky Brand Dungarees. What Happened? 10 Marketing Tips

The denim retailer Lucky Brand Dungarees recently filed for bankruptcy, joining a growing list of retailers that have suffered the same fate as a result of the coronavirus pandemic, as is discussed in detail over at runrex.com and guttulus.com. This completes a spectacular decline for a company that was among the most popular in the 1990s and early noughties. So, what happened to Lucky Brand Dungarees? Well, this article will look to highlight 10 factors that contributed to their decline with the hope that you will take out several marketing tips that will help you avoid going down the same road.

The decline of the American mall

At its pomp, Lucky Brand Dungarees reaped the reward of its strong association with malls, back then when going to the mall was cool and mall foot traffic was at an all-time high. However, in recent years, as is discussed over at runrex.com, malls have become less and less popular, with more and more shoppers opting to chase better deals online. It is no longer cool to go to the mall and hang out all day or to shop at the mall, and this is yet another thing that has led to the company’s decline, as per the gurus over at guttulus.com. This is because this has contributed to a reduction in foot traffic, leading to a decline in sales.

Changing customer tastes

In recent years, the company started to lose its luster and ended up falling out of favor with customers as it couldn’t keep up with their changing tastes. The denim designs that made them such a staple in the 1990s and the early noughties had become a thing of the past, with consumers looking for different designs as far as their denim is concerned, as is discussed over at runrex.com. The company began being viewed as being from the past, which is another factor that contributed to their decline.

Cost of production

Lucky Brand Dungarees was known as an American brand for Americans, manufacturing their denim in the U.S. However, while this was one of their main selling points it was also one of their weaknesses, as the had to grapple with the high cost of manufacturing in the U.S. Thus meant that they were unable to compete with the low prices offered by competitors due to their high production costs, as discussed over at guttulus.com, and is yet another factor that contributed to their decline as they not only had to grapple with high production costs but couldn’t offer competitive prices as a result also.

The shift of some of their manufacturing overseas

When the company brought in Gap veteran David DeMattei as CEO in 2010, one of the changes he made was to shift some of the company’s denim manufacturing overseas to counter the high production costs as outlined above and discussed over at runrex.com. However, this also damaged the company which had a reputation of being an American-made company. The backlash that came with this saw a huge chunk of their loyal customers depart, which is another factor that can be attributed to their decline and eventual filing of bankruptcy.

Massive debt due to being taken over by a private equity firm

As is discussed in detail over at guttulus.com, one of the trends we have seen recently is companies filing for bankruptcy after taking over crushing debt following a takeover by a private equity firm. This is the same fate that befell Lucky Brand Dungarees, which was taken over by the private equity firm, Leonard Green & Partners in 2013, taking on massive debt as a result. In the end, the high levels of debt proved to be too much for them, with the coronavirus pandemic only making things worse for them.

The growth of online retail

For a company that was heavily reliant on its brick-and-mortar stores, the growth of online retail was another factor that contributed massively to their decline. As per the subject matter experts over at runrex.com, this is because more and more of their prospective customers preferred shopping online due to the convenience as well as the fact that prices were lower. The company was slow to react and jump on the e-commerce bandwagon, which also proved to be another catastrophic mistake.

Too many stores

With over 200 stores in the U.S, the company also in the end had too many stores, which is another factor that contributed to their decline. This is because, as discussed over at guttulus.com, this led to a situation where payment of rent and operation costs, as far as their stores are concerned, was a big problem for them, particularly since most of their stores are located in prime locations where rent is high, as well as the fact that they were all tied up on long-term leases.

Too many underperforming stores

To compound things, not only did they have too many stores, but the majority of their stores were underperforming badly; which is no surprise given that most of them were located in shopping malls, as covered in detail over at runrex.com. This meant that the company was unable to make enough sales to offset the costs that came with keeping these stores operating, and with a majority of them doing badly, it was only a matter of time before they had to file for bankruptcy.

Limited liquidity

The company also over the years was dogged by issues regarding liquidity, which came to a head as a result of the coronavirus leading to their filing of bankruptcy as discussed over at guttulus.com. Their limited liquidity made it harder and harder for them to get new inventory from vendors, with some key vendors being worried enough to require them to pay for inventory on delivery as they were afraid that they won’t be paid. This put the company under a lot of financial pressure, and it is another factor that contributed to their decline.

A move in consumer spending away from apparel

In recent times, as the gurus over at runrex.com will tell you, there has been a notable shift in consumer spending away from apparel to other sectors such as home appliances and technology. People are now more likely to spend money to improve their homes rather than their closets. People are also spending money on gadgets such as smartphones and laptops, which has also led to the apparel retail sector taking a beating. This is one of the factors that has led to Lucky Brand Dungaree’s decline and eventual filing of bankruptcy.

As always, if you are looking for more information on this and other related topics, as well as more marketing tips, then the subject matter experts over at runrex.com and guttulus.com have you covered.