I've made it no secret that I'm a huge Kardashians fan and an admirer of Kim as an entrepreneur. Just watch her interview with (a very smitten) Steve Forbes at the magazine's 2017 Forbes Women Summit and you'll appreciate just how much of a branding and marketing genius she is. But this week's decision to close her family's Dash clothing store chain was - sorry Kim - a big mistake…and a lazy stumble.
I love buying all my clothes at Dash so of course I'm disappointed. Just kidding. I'm more of a Target guy. But Dash, which was started by the sisters back in 2006 right before their reality show (and popularity) exploded was intended to be a way for the family to capitalize off their already growing brand name. Unfortunately, things didn't work out as planned.
The stores always seemed to struggle, particularly of late. As recently as 2016 an episode of Keeping Up With the Kardashians featured a disappointing visit by Kim's sister Kourtney to the store's New York City location where she declared that the store was like walking back into time. The location was eventually closed.
The sisters in 2017 continue to squabble over what to do with the store's remaining locations and tired brand. Then the plotline got buried amidst all the other goings-on with Kanye, the Paris robbery, the pregnancies, Rob, Black Chyna and of course my favorite character on all of TV - King Disick. Really? You're not watching this show?
Fast forward to 2018 and the announcement this week that the sisters would be closing their remaining two locations. Some blame it on the country's "retail apocalypse" that's shuttering so many stores and malls (thanks Amazon). Others say it was poor management. Or maybe it's just because Kim - like her sisters - is branching out with her own clothing and lifestyle brands and the two stores were just an immaterial distraction in their global empire. I'm sure all of these reasons played a part in the decision.
I agree that it's always good to cut the cord and move on from an unprofitable (or in the Kardashians' case, distracting) business. I just think it's a bad business decision to close Dash and walk away. Why? They could’ve really made a profit by selling the chain. Not now. But in just a couple of years. No one I know who's successful in business just shuts down their business, unless someone dies or there are absolutely no other alternatives. The Kardashians had relatively inexpensive options to package this asset into something of value.
With a nominal amount of effort, Kim and the clan could've featured the store more on their show and online. They could've invested a little more and even hired an outsider to refresh its inventory and brand. They could have cleaned up its operations and brought in a few decent managers. The Kardashian name is powerful (Kim has 110 million followers on Instagram alone and yes I follow her and yes as I write this it sounds very creepy and it is but I draw the line at Kylie and Kendall, OK?) and could’ve been used to Dash’s advantage.
With an audience this large, the Kardashians could have easily withstood the so-called "retail apocalypse." Their strategy should have been to increase the store's value over just a two-year period of time and then sell half of it to another retailing, big brand "partner" with deep pockets with an option to let go of the remaining half at some time in the future. That way Kim and her mom Kris (back off on that woman Kanye, OK? I’m warning you!) could have kept control over their valuable brand at least in the short term while maximizing their exit. Instead, they just got lazy.
So that's the lesson for any business owner looking to exit: don't be lazy about it. In most cases if you take a long term point of view with an aim to sell you can give yourself time to build up value in your business so you don't have to let it die. Clean the place up. Bring in a decent manager or two. Replace the old equipment. Upgrade your technology. Package your business to sell.
I know the Kardashians have a lot going on. We all do. But none of this would've taken that much effort and they would've walked away not only with a lot more cash in the bank but winners in the public eye. This week they look defeated and no one wants to be associated with a defeated brand. C'mon Kim, you got lazy! That's not you!