Painted Tree Boutiques, a provider of brick-and-mortar space for independent vendors at its stores across the country, has permanently closed up shop, citing woes that have plagued retail this year.
The Little Rock, Arkansas-based chain, with roughly 60 locations, notified the small-business owners set up at its stores that it was closing down operations as of Tuesday. Painted Tree Boutiques is telling those vendors they need to remove their inventory from store premises by April 24.
The retailer is the latest addition to the list of chains with locations going dark. The year kicked off with several rounds of store closings announced, including of Macy's, Saks Fifth Avenue, Neiman Marcus, American Signature Furniture, Eddie Bauer and Francesca's. Then came footwear maker Allbirds, reporting in January that it was shutting all its remaining brick-and-mortar retail locations, followed by this week's news that it is making a surprising pivot to be an artificial intelligence compute infrastructure company, NewBird AI.
Painted Tree Boutiques, billing itself as "an Etsy marketplace and Pinterest catalog come to life," leased space and collected commissions from small businesses and artists in exchange for offering them a brick-and-mortar location to sell their wares. That way, these entrepreneurs — with their home decor and fashion and gift items — could have their own little retail spot in a marketplace under one roof without bearing the expense of operating a full-fledged store themselves.
The stores didn't generate the consistent traffic flow, repeat customers and treasure-hunting shopper behavior to make them a success.
Paint Tree Boutiques appears to be the only retailer that has attempted to scale and roll out that model — essentially subleasing small spaces to dozens of vendors — on a national rather than just a local basis, David Hinkle, co-founder and principal of The Outlet Resource Group, told CoStar News.
Painted Tree Boutiques didn't respond to an email on Wednesday from CoStar News seeking comment.
But a company spokesperson told WRAL News that "rising costs, shifting market conditions and the evolving nature of how people shop have presented challenges" to the retailer and led to the chain's shutdown. Those are the very same reasons that other companies have cited when they closed stores or filed for Chapter 11 bankruptcy protection.
Specialized retail model
Painted Tree Boutiques described its strategy on its website.
"With locations across the nation, Painted Tree Boutiques is home to hundreds of creative Shop Owners under one roof," the retailer said. "Our shop owners specialize in gifts, decor, fashion, and so much more. ... It's about supporting local entrepreneurs and giving the local community a treasure trove of delightful things. We're about all things lovely, inspiring, and stylish — just like you."
Painted Tree Boutiques was able to get traction and lease space at reasonable rents following a surge of big-box and "junior box" vacancies, according to Hinkle, referring to the availability of large retail spaces. On paper, the business model made sense for Painted Tree Boutiques because it required minimal labor, no risk regarding inventory and vendor-owned product, he said.
However, the stores didn't generate the consistent traffic flow, repeat customers and treasure-hunting shopper behavior to make them a success, Hinkle said.
On social media, Painted Tree Boutique vendors complained they have been abruptly left in the lurch, some paying rent for the next few months even though the stores are closed now.
One of those vendors, Threefold Grace of Little Rock, posted about the store closings on Facebook on Tuesday.
"I'm honestly still trying to process this," Threefold Grace said. "This morning we were notified that Painted Tree Boutiques is filing Chapter 7 bankruptcy and has shut down all operations effective immediately. That location made up about 90% of my business, so this is a major and unexpected shift. To say this is hard is an understatement."
However, the vendor said, it had several other locations open and had new ones planned.
In its missive to its vendor shop owners, Painted Tree Boutiques said it had made "the very difficult decision" to cease all business operations.
"We understand the impact this has on you and your business, and we are truly sorry," the retailer said. "We know many of you have invested significant time, energy, and resources into building your spaces at Painted Tree, and this is not the outcome any of us had hoped for."