Ana Mihaljevic

If Luxury Retailers Are Feeling The Economy Main Street Is Living It. Don't get excited; it takes time for all of this to filter through. The cost of operating a home is higher. That means interest rates are hitting mortgages and lines of credit. Therefore, less disposable incomes and a slower economy will still come. Interest rates will drop, but how much and how fast it will drop is yet to be determined. I still believe that this was all necessary; it may have been too aggressive, and consumers could have led the economy into a deeper slowdown than first thought. Retailers like Burberry (which replaced its CEO) and HUGO BOSS are already resetting their forecasts; if luxury is feeling it, Main Street is living it. That means retailing and other consumer spending, such as dining out, will take a hit, as many already are. #retailing #strategy #ceo #technology #Business #CanadianEconomy

7

1 Comment

Consolidation of the department store retail sector continues. This round at the premium level. Expect continued overall declines in a retail segment that is in dire need of real transformation to remain relevant long term. More of the same won’t cut it. #retail #departmentstores #wholesale #ecommerce

38

1 Comment

Thank you Inside Retail US for quoting International Association of Department Stores - IADS in their latest article on the Saks Fifth Avenue / Neiman Marcus Group mega merger (link in comments)! 🎯 On the global department stores stage, the US represent a very specific market (apart from its size), as most of the nationwide companies are public (maybe not for long anymore, as Nordstrom, for instance, is planning to go private). This means that they have to be transparent on their numbers, which are not-so-good for a wide variety of factors (the missed e-commerce train, the customers' disaffection for the malls where they are located, a low differentiation between each other, an ageing clientele, a wide variety of competing channels and formats, an oversupply of stores on a market with the highest number of retail sqm per capita...). The Saks Fifth Avenue merger with Neiman Marcus Group, orchestrated by Saks' owner, Hudson's Bay Company, is therefore not so surprising as the pie has shrunk over the past twenty years. 💥 It can be expected that this merger will be as much of a game-changer as the latest one that took place in 2005, when Federated (aka Macy's now) acquired May Department Stores for $17.2bn (for comparison, the current NM / SFA merger price tag is $2.65bn), ending a 20 year-long consolidation cycle that saw the disappearance of legendary US destination stores (such as Filene's, Kaufmann's, Marshall Field's, Foley's, the Bon Marché, Hecht's, Stern's...) which were rebranded Macy's or Bloomingdale's according to the locations. 🚚 The new entity created, Saks Global, aims at maximizing the synergies between the companies, since Neiman Marcus and Bergdorf Goodman (part of the Neiman Marcus group) are the undisputed leaders in luxury retail, while Saks Fifth Avenue has separated its stores from its e-commerce entity in 2021. However, while the leadership of the new company has been announced, the plans remain vague, since this merger remains to be approved by the Federal Trade Commission. Pro tip: more than layoffs and store closures, the location of the new offices will be the most interesting thing to watch. The reason is that Neiman Marcus and Saks Fifth Avenue are entirely different animals: the former, specialized in luxury, is one of the last operator in the US to operate in wholesale (which requires savoir-faire, ability to select, curate and sell) while Saks Fifth Avenue is concession-based, which is another job. The place where the bosses will gather will tell everything about the direction of the new entity: Dallas (NM's current headquarters) or NY (SFA)? Not convinced? Look at what happened to Boeing since they decided to leave Seattle for Chicago when they merged with McDonnell Douglas... Thank you Nicole Kirichanskaya for the cool article and what a pleasure to be quoted along the great Marie Driscoll, CFA!

37

3 Comments

Here are some interesting stories from the world of retail for Thursday, May 30: 👖 Shares of Abercrombie & Fitch Co. continued their record run after the apparel retailer reported another quarterly earnings beat and raised its sales growth outlook, amid continued strength in the Abercrombie brand. 🏀 DICK'S Sporting Goods kicked off the year with net sales of more than $3 billion in Q1, an increase of 6.2%. Comparable sales in the quarter grew 5.3%, on top of 3.6% growth the year prior. 🦅 American Eagle said it’s making gains in boosting profitability as it works to improve its product assortment and tweak operations. Still, its fiscal first-quarter sales came in weaker than Wall Street expected. 🐹 Chewy smashed earnings estimates for its fiscal first quarter on Wednesday, announced its first share buyback program and signaled a recovering pet market. 🌳 Dollar Tree Stores announced it has acquired leases for 170 of 99 Cents Only Stores stores out of bankruptcy in Arizona, California, Nevada and Texas. Dollar Tree will reopen these stores with its own products under its brand. 🥾 Dr. Martens plc has announced a swathe of cost-cutting plans, after the bootmaker’s bottom line was hit by plummeting demand in the US last year. The London-listed firm hopes to save up to £25m in the coming financial year. 🏥 Walgreens said it will slash prices on 1,300 items across its drugstores — the latest big retailer to enact discounts as consumers grow increasingly picky about where they shop in an era of stubbornly high inflation. 🐶 Petco names a new chief stores officer as the COO exits. The pet retailer said it eliminated its chief merchandising and supply chain officer role and named five people to its executive leadership team. 👟Italian luxury sneaker brand Golden Goose, which was valued at €1.3bn when acquired by Perimia in 2020, said on Thursday it aims to list on Milan's Euronext next month. 💵 Cash register outages and internal system failures at Walmart have led to widespread mispricing, with customers being overcharged for certain items. The technical issues on March 19th affected 1,600 stores. 🌭 Americans are now prepared to spend nearly $6 for a hot dog. The summertime classic has climbed in price by 7.1% during the past year, according to the latest government figures. 🍔 A top McDonald's executive on Wednesday decried poorly sourced reports that the fast-food giant has hiked its prices faster than inflation. He also noted that an $18 Big Mac meal is exception not the rule. 💳 Visa and Mastercard have agreed to pay $197m to resolve a class action by millions of consumers accusing the financial payment companies of keeping cash access fees artificially high. 🍪 Subway’s footlong cookie is back. Following a four-month long disappearance, Subway announced Wednesday the “triumphant return” of the oversized chocolate chip cookie. #retail #retailnews #economy #DailyRetailNews

76

6 Comments