Many retailers die in a sort of death by-a-thousand paper cuts way. You would think that sales moving online would be the key reason that many brick-and-mortar chains fail, but it's not as simple as that.
In many cases, customers still make big purchases at their favorite retailer in a store. You may, for example, go buy an Xbox or PlayStation at the local GameStop. It's what happens after that causes the problems.
Related: Popular beauty retailer closing, ending all operations
There's no actual reason for you to go back to GameStop to buy games, accessories, or anything else. You can order all of those items on Amazon.
So, in this scenario, the physical store got the lower-margin big-ticket-item sale, but not the higher-margin sales that go with that purchase. The store may not lose a huge percentage of its sales, but it ends up getting hit hardest on products that make the chain the most money.
There are ways to combat this. Barnes & Noble, for example, knows that many customers browse its stores in order to find books to then purchase digitally, almost certainly from Amazon (AMZN) .
More bankruptcy:
The bookseller, however, does make a high margin when you eat or drink in its cafe or buy a small item on your way out. Sure, you just looked at books, but books sell at a pretty low margin while Barnes & Noble makes over 50% on the Godiva sampler you bought on a whim.
Image source: Guitar Center
Sam Ash faced a tough road
Sam Ash has been struggling for years. The chain closed half its stores in March. The challenge for the company, which has been run since its founding in 1924 by the Ash family, is that online sales have siphoned off little chunks of its business that made the overall operation possible.
The chain does have a website, but it built its business around welcoming people into physical locations.
Related: Costco makes a key membership change members won't like
"Our motto is Come in And Play. Yes, we'd love you to buy but more importantly, we want you to have an experience. Music and musicianship is thrilling and exciting, and were just happy to a special part of that journey," the chain shared on its website. "Visit any Sam Ash Music Store at any time and you're guaranteed to see somebody making music. Playing the incredible selection of instruments is not only allowed, it's encouraged."
That helped the company build a vibrant musical community, but those days are coming to an end.
Sam Ash closing all locations
The partial shutdown was not enough to save Sam Ash. It's closing down all of its stores and going-out-of-business sales have begun.
"It is with a heavy heart that we announce that effective May 2nd 2024, all Sam Ash Music Store locations will begin store closing sales," the company shared.
Items purchased after May 1 cannot be returned.
"This unfortunate news also presents a fantastic opportunity for great deals across our premium selection of musical instruments & pro sound equipment. We will also be offering specials on samash.com during this time. Thank you for allowing us to serve musicians like you for 100 years," the Ash family, which signed the note, posted.
Want the latest cruise news and deals? Sign up for the Come Cruise With Me newsletter.
The company has not shared a closing date nor has it filed for bankruptcy. Multiple reports shared that the company had been trying to find a buyer in order to keep its operations going.
Related: Veteran fund manager picks favorite stocks for 2024
