MICHEL MARTIN, HOST:
The auto industry may be celebrating, but 2015 was not a great year for every business. In a few minutes, we'll hear about several major companies that had troubles. One of the small businesses that had to make tough choices is CakeLove, a bakery in Washington, D.C.'s, historic U Street neighborhood. When it opened back in 2002, The Washington Post said it created a, quote, "baked good buzz years before people thought of standing in line for a cupcake," unquote. CakeLove's success turned owner Warren Brown into a celebrity foodie. By 2005, he was hosting his own show, "Sugar Rush," on the Food Network. At one point, his empire included seven stores and a cafe. But the last brick-and-mortar store is set to close at the end of the week. He's turning CakeLove into an online business. Recently, Brown shared his story with us, starting with what inspired him to open up shop.
WARREN BROWN: Baking was a New Year's resolution for me. And I was tickled that people were interested in buying the cakes, but my curiosity about baking and my passion for sharing it with people has never, you know, gone away.
MARTIN: Do you have any advice for people who are thinking about ending something or starting something? I mean, how do you know when it's time?
BROWN: I don't really think you're ever going to know it's time to have done something until you've already done it. When you're in the midst of it, it's very, very difficult to know, you know - is this actually it? My biggest advice to other people is, like, you're always going to be a little scared, nervous, frightened about going from the known to the unknown. There's not that much you can do to ameliorate that. Just kind of have to get used to it and recognize that if it's a solid plan, you should feel good about it.
MARTIN: Warren Brown is the owner of CakeLove, which is closing its last brick-and-mortar store in Washington, D.C., at the end of this month. And he's focusing now on his other businesses, including Cake in a Jar. Warren Brown, thanks so much for speaking with us, and happy new year to you.
BROWN: Thank you, Michel. Happy new year.
MARTIN: So let's turn now to some big companies that went through major changes in 2015 - retailers, including RadioShack, Office Depot, Staples, American Apparel and even Target have all announced closing stores over the past year. We called The Wall Street Journal's Suzanne Kapner in New York to find out why.
SUZANNE KAPNER: Well, we've see the shift in online shopping becoming even more pronounced. We've noticed that very much during this holiday season on Black Friday, the crowds at stores were noticeably thinner - same on Super Saturday. And you just see more and more people ordering gifts online, particularly during the holiday season. They don't want to fight the crowds at the mall. And retailers have just made it too easy for them, with free shipping, free returns, last-minute delivery guaranteed. So, you know, we really reached that tipping point where online is really starting to pressure the stores at the mall. And you're seeing, you know, those stores at the mall really offering these big, big discounts to try to get shoppers in their doors.
MARTIN: So brick-and-mortar stores are really the ones where this is showing up. That experience is really changing.
KAPNER: The experience is changing at the brick-and-mortar store. And retailers are trying to - they're trying to figure out ways to get you to make a visit, whether it is, like, an experience, like having a special event at the store. There are Origin stores that now have, like, these sinks, and they let you wash your hands and try the product. They have coffee bars. Uniqlo has Starbucks in its stores. They have couches, TVs. The retailers are trying to sort of make the shopping at their stores into an experience to give you a reason to visit.
MARTIN: Now, we just heard from a person who - you know, you'd think a bakery would be the ultimate kind of brick-and-mortar thing. You know, it's generally kind of an impulse purchase. You walk by. You smell it. It smells good. You're hungry. You go get your cupcake. And this person - the person we just spoke to, Warren Brown - said that he's actually moving to all online - that you can still order his goods, but he's going to deliver them online, or maybe they'll be available in stores. So haven't stores really contributed to this themselves by shifting a lot of their operations online?
KAPNER: Well, they've had no choice but to shift online. The way they've contributed to the problem is by over-expanding. Over the past decade or two, you've just seen these chains open dozens and dozens of stores. We have too many stores in this country. By one count, there's something like 23 square feet of gross leasable space for every person in the country. We don't need this many stores, and now as people buy more online, we certainly don't need as many stores. But that doesn't mean stores are going away. In fact, you see online retailers - retailers that started as e-commerce-only players like Bonobos and Warby Parker - they've actually started opening stores because what people are saying is the sweet spot is you want some combination of online and a physical experience.
MARTIN: So you're leading me to the last question I have. What does this mean for workers, and what does this mean for consumers?
KAPNER: Well, for workers, you know, the type of job openings have shifted. You've seen during this holiday season there was a big shortage in warehouse workers. Retailers are scrambling to find employees to fill their warehouse to stock, you know, to handle their logistics and their backend e-commerce operations. And they've been cutting back on the number of employees on the store floor, so the type of labor is shifting. And, you know, for consumers - consumers are really the big winners here because they have all the options now. I talked to a woman yesterday who - on Sunday, she ordered Christmas gifts without leaving her bed, so you can't really beat that as a shopper.
MARTIN: That's The Wall Street Journal's Suzanne Kapner with us from New York. Suzanne, thanks so much for speaking with us, and happy New Year to you.
KAPNER: Thanks. Happy New Year to you, too.
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