Photo by Tim Mossholder on unsplash
July 4, 2024
What Went Wrong for Bob’s Stores?
Bob’s Stores, a retail chain known for affordable apparel and footwear, is shutting down all of its locations due to financial struggles. The company has begun liquidation sales, offering significant discounts on merchandise and store fixtures. Customers can use gift cards and make exchanges at one of its 21 locations until July 14. This closure is part of a broader trend of retail shutdowns in 2024, driven by a wave of bankruptcies and the impact of inflation on consumer spending.
At the turn of the century, Bob’s began experiencing significant financial difficulties. These struggles continued, leading to multiple bankruptcy filings and changes in ownership. The latest bankruptcy has forced the company to liquidate, marking the end of an era for the beloved chain.
The closure of Bob’s Stores is part of a broader trend affecting its parent company, GoDigital Media Group. Eastern Mountain Sports (EMS), a sister retailer, also announced store closures and plans to vacate its Connecticut headquarters last month. Both retailers have been unable to overcome the financial hurdles posed by the current economic climate.
Dave Barton, president of Bob’s Stores, expressed regret over the decision to liquidate. “Bob’s has been a stalwart of our local communities for nearly 70 years, and we know our customers remember us as having been there for major moments in their lives,” he said in a statement. “We remain grateful to our vendors, suppliers, customers and employees for all of their support over the years.”
After being founded in 1954 as a single store, the retail chain expanded over the decades to include three dozen locations across Connecticut, Massachusetts, New Hampshire, New Jersey, New York, and Rhode Island. Despite its regional success, Bob’s Stores faced persistent financial challenges, culminating in four bankruptcy proceedings and five ownership changes.
In May 2022, GoDigital Media Group acquired Bob’s Stores and EMS for $70 million, setting the stage for a significant transformation of both brands. Known for its media and technology ventures, GoDigital aimed to integrate Bob’s Stores into its ecosystem, leveraging its community presence and expanding market reach.
Bob’s Stores, which has been a staple in the Northeast for decades, embarked on a comprehensive rebranding campaign following the acquisition. This campaign, which was set to launch this past spring, was designed to highlight Bob’s role in important life moments, reinforcing its commitment to affordability and quality. By appealing to a broad customer base through various life stages, Bob’s Stores aimed to strengthen its ties with the communities it served.
One of the key strategies GoDigital implemented was the integration of EMS stores into new and remodeled Bob’s locations. This innovative approach provided customers with a wider array of products under one roof, enhancing convenience and driving foot traffic. The integration not only improved the shopping experience but also capitalized on the strengths of both brands.
Expansion was a critical component of GoDigital’s growth strategy. This included opening new stores and enhancing the online shopping experience. The EMS website had already received significant upgrades, with similar enhancements planned for Bob’s online presence. These upgrades aimed to create a seamless shopping experience that extended beyond physical stores, incorporating useful content such as reviews, blog posts, and how-to guides. This digital transformation was designed to meet the evolving needs of customers and keep the brands competitive in the modern retail landscape.
GoDigital also planned to launch a public-facing rewards program for both Bob’s and EMS in 2024 to reward loyal customers and attract new ones. Customer engagement was at the forefront of GoDigital’s strategy, recognizing the importance of building lasting relationships with consumers.
Product innovation was another critical area of focus. At the end of 2023, EMS introduced the ‘67 Heritage Line, a new product line featuring sustainable materials and responsible sourcing. This initiative reflected GoDigital’s commitment to quality and sustainability, appealing to environmentally conscious consumers. By focusing on innovative products and sustainable practices, EMS aimed to attract a new generation of outdoor enthusiasts.
Though all of Bob’s Stores are closing, the future of EMS and its over two dozen locations remains unclear. It filed for Chapter 11 on June 18, and it is reportedly planning to liquidate some assets as part of its bankruptcy proceedings.
Discussion Questions
Considering the efforts by GoDigital Media Group to integrate and reposition Bob’s Stores and EMS within its portfolio, what strategic oversights or market dynamics might have hindered their ability to achieve long-term viability and profitability?
In the context of changing consumer behaviors and economic conditions, how could retail chains like Bob’s Stores better navigate financial challenges and sustain their operations amidst fluctuating market conditions?
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Poor Bob’s Stores has an extremely checkered history. TJX bought it out of bankruptcy in 2003 (interestingly Dick’s also wanted to buy it at the time). TJX didn’t do much with it and found it rather superfluous to the business as it continued to chalk up losses. So, they sold it to private equity just five years later. Here Bob’s continued to bump along the bottom. It was restructured, re-sold, and went through bankruptcy before being sold to Frasers Group, which then sold it to current owner GoDigital Media. This constant passing around of the business has meant it has never really had a very clear strategy or focused management, which has been an issue. The biggest problem is that Bob’s is a very small chain and does not have the economies of scale to compete. As it is at the value end of the market it has also suffered from a pullback in consumer spending.
The restructuring plans, including the layoff of over 150 (??) employees and the closure of ten stores across the two brands were not enough (of anything) to save Bob’s Stores. The retailer need a much better thought out plan, an adjustment to the model, and a new approach to marketing. Not enough happened and now they are leaving the landscape of sporting goods retailers.
In general, brick-and-mortar retailers are experiencing difficulties, but those selling sporting goods have been particularly affected. Food and essential clothing have been the items most often purchased by families most affected by inflation, rather than non-essential items such as sporting goods.
Sports retailers actually benefitted from the pandemic, but failed to institute strategies to build on that momentum when the pandemic was over. Db
The downfall of Bob’s Stores has been a slow burn, over two decades in the making and should come as a surprise to no one.
The dynamics of the apparel and footwear sectors require successful brands to have deep pockets, focused, committed and resilient ownership/management and the ability to pivot with shifting consumer tastes. Unfortunately, these traits were not a part of the Bob’s DNA, and so they find themselves at this last chapter in their history.
So, after acquisition they decide to rebrand. Why? I see no market indicators that would lead to that decision, which leads me to believe that if they had not been acquired maybe things would have turned out differently. Or not-this could also be a case of not keeping up with your customers.
From a customer’s perspective (I have been), the store failed to draw enough traffic. The reasons are: an understaffed store, signage not enough to facilitate navigating and finding the product of choice, associates marginally interested in doing their job, not enough depth of sizes and colors (in-stock position), and an unattractive environment. If one found what one wanted, the prices were good.
This is a sad story that was probably written in the early 2000s. It is difficult to take a retailer through one bankruptcy, but four? I suspect the acquirers/sellers made money by the turnover. Was Bob just a plaything in the financial game playing? I suspect once the stores are closed Bob’s will be quickly forgotten.
Bob’s Stores had a challenge many mid-market retailers have: Not large enough for enterprise efficiencies, but too large to have the nimbleness of smaller retailers… and retail software used by midmarket retailers often exacerbates these problems by either being painfully deficient or far too expensive.