What: Klarna reported its first quarterly profit in four years, signalling a potential stock market listing.

Why it is important: The potential stock market listing indicates a growth in the "buy now, pay later" fintech sector.

The company achieved a net profit of SKr90mn in Q3 2023, compared to a SKr2.1bn loss the previous year, with revenue increasing by 30% to SKr6bn. Klarna also reduced its credit losses by almost half, thanks to improvements in its underwriting models.

As part of its journey towards an eventual IPO, Klarna established a UK holding company alongside its Swedish banking license. The company has not yet decided on the specific location and timing of the listing.

Klarna's CEO, Sebastian Siemiatkowski, expressed satisfaction with the Q3 profit and emphasized the company's readiness for an IPO, once market conditions improve. Klarna's potential London listing would boost the London Stock Exchange Group.

Klarna studies ‘eventual IPO’ after first profit in 4 years

What: Saks had to close its King of Prussia mall store, a prominant location, due to failing to pay the rent.

Why it is important: While Covid is blamed for such difficulties, it shows SFA’s willingness to scale down even if its reputation is at stake

Saks is facing a rental dispute at one of its stores in King of Prussia, a major shopping destination on the East Coast of the United States.

The store's landlord, DDRTC Overlook at King of Prussia, a subsidiary of Ohio-based real estate investment firm Site Centers Corp, has filed a lawsuit against Saks & Co for USD 1.4 million in unpaid rent.

King of Prussia is home to one of the largest shopping malls in the U.S., featuring luxury brands like Gucci and Louis Vuitton. Saks has been leasing a 3,863 square meter space since December 2016 with an annual base rent of approximately USD 1,052 million, excluding additional charges.

The store, which was warned multiple times about the unpaid rent, attempted to terminate its lease that runs until 2025 but was rejected by the landlord. The complaint was filed on June 21, and while the court date is not yet set, the Saks store in question appears to be closed according to Saks' website.

Saks Fifth Avenue closes King of Prussia store for failing to pay the rent

What: The AI talent market in 2023 is highly competitive with top graduates and specialists demanding salaries up to $400K and above.

Why it is important: These salaries reflect the urgent demand for AI expertise in various industries.

The AI talent market in 2023 is extremely competitive, with PhD graduates in data science and machine learning earning up to $400k right out of university, and top executives making over $1m. This surge in demand and high salaries are driven by companies' urgent need to integrate AI into their strategies, especially after the impact of technologies like ChatGPT.

There's a particular demand for AI product leaders and machine learning specialists, with some opting for high-paying, short-term "SWAT team" projects. This trend reflects the growing importance and investment in AI across various industries.

The market for top AI talent in 2023 is hot

What: Flannels has taken over a flagship store on London's Oxford Street and introduced a new category called Flannels Home.

Why it is important: The Flannels campaign and flagship takeover, along with the introduction of Flannels Home, are important as they showcase the brand's ability to adapt and expand its offerings to cater to the youth market, while also creating an immersive and vibrant shopping experience.

The store takeover involves transforming Flannels X into a shoppable house party, showcasing youth-led fashion and beauty brands. Visitors can explore different sections, such as the Lounge, Garden, Bedroom, and Boudoir, featuring various fashion collaborations and curated selections. The store also includes a bar and a beauty section with makeup and haircare offerings. Additionally, Flannels Home offers a curated collection of designer homeware brands.

Flannels reveals campaign and flagship takeover, plus homewares debut

What: According to a study by Cushman & Wakefield, New York's Fifth Avenue remains the most expensive shopping street in the world.

Why it is important: The ranking of the world's most expensive shopping streets is important as it provides insights into global retail trends, economic competitiveness, and prime retail locations.

The top 10 ranking of the most expensive shopping streets has remained unchanged this year. Milan's Via Monte Napoleone has moved up to second place due to a significant 20% increase in retail rents. Hong Kong's Tsim Sha Tsui Street has only seen a 4% increase in rental value since 2022. New Bond Street in London holds the fourth position, and the Champs-Elysées in Paris ranks fifth with rents remaining the same as in 2022.

France holds half of the top 10 positions in Europe, primarily due to the Parisian luxury arteries, which have seen increased activity.

Fifth Avenue in New York remains the most expensive shopping street in the world

What: E-commerce sales in the United States are projected to surpass $1.1 trillion in 2023, displaying substantial growth compared to the $1 trillion recorded in 2022, as per the Department of Commerce

Why it is important: Despite a 7% growth rate in 2023, it represents the slowest expansion since the 2009 recession. The current e-commerce landscape is 14% above the theoretical trendline based on pre-pandemic forecasts, according to Marketplace Pulse's analysis.

The pandemic-induced surge in e-commerce is gradually declining, suggesting a potential alignment with the trendline in the coming years. While industry giants like Amazon, Walmart, Shein, and Temu have outperformed the 7% growth rate, smaller players may have experienced negative growth.

E-commerce has remained relatively stagnant as a percentage of total retail in recent years but continues to grow in absolute terms. In the past, the growth rate of e-commerce averaged around 14-15%, with acceleration and subsequent deceleration during the pandemic. The observed 7% growth rate in 2023 is seen as a possible bottom, with expectations of future acceleration to 9-10% in the coming years, highlighting the ongoing upward trajectory of e-commerce.

U.S. online sales to exceed 1.1 trillion dollars in 2023 

What: Marks & Spencer has been granted approval by the High Court to proceed with a judicial review over the rejection of its Marble Arch store redevelopment project.

Why it is important: The outcome of the judicial review for M&S's Marble Arch store redevelopment will determine if the rejection decision can be overturned and pave the way for the transformation of the site into a modern, sustainable building. The review is expected to take place next year, and M&S will need to prove that there was an error in the government's decision-making process.

The proposed redevelopment involved demolishing the Art Deco building and constructing a new one, but concerns were raised about potential harm to nearby landmarks and the scheme's carbon footprint. M&S CEO Stuart Machin expressed his disappointment with the decision and stated that the refurbishment of the existing store was not possible. However, he remains determined to secure a better future for the Marble Arch location and its community.

Marks & Spencer gets approved to legally challenge Marble Arch redevelopment rejection

What: Social network TikTok, after having forayed into social commerce, is adding new features such as product authentication.

Why it is important: By including new features they reinforce their central place in the younger generations’ lives and raise the bar higher for other more traditional retailers, unable to follow their price point strategy.

TikTok has partnered with luxury goods verification service Real Authentication to ensure the authenticity of used handbags sold on its U.S. platform, TikTok Shop. Merchants are required to get their handbags verified by Real Authentication, which uses a proprietary Smart Database scan technology to detect counterfeits. Once verified, sellers can list these bags on TikTok Shop, including the authenticity certificate. This move comes after the September launch of TikTok Shop in the U.S., aiming to boost buyer and seller confidence in the resale luxury market. Real Authentication also authenticates other items like clothing, jewelry, and shoes. This initiative follows similar steps by other major retailers, like Fashionphile and eBay, to offer verified luxury secondhand goods.

TikTok to offer authenticated handbags

What: According to a report by Cushman & Wakefield, fashion brands made up over 40% of retail floor space across Europe in the first half of 2023.

Why it is important: This report provides valuable insights into current leasing trends and consumer preferences, guiding strategic decisions for retail expansion and experiential offerings.

This trend was especially pronounced in larger retail spaces. The food and beverage sector was also active, making up 17% of transactions. Health and beauty brands, especially premium ones, doubled their space transactions compared to the previous year. The majority of deals were for smaller units, with over 80% being less than 6,500 square feet.

The report also notes a growing consumer demand for experiential and cultural retail experiences, with examples like the Paradox Museum and automotive showrooms. This trend is expected to continue, with entertainment-based brands and electric car companies expanding their retail presence in Europe.

Fashion and beauty brands are leading the race for physical retail space in Europe 

What: Kohl’s reported a decline in net income for the quarter ending October 28.

Why it is important:  Kohl's decline in net income and sales reflects the current performance of the company and its impact on the retail industry.

Their net income fell to USD 59 million, beating expectations of 35 cents per diluted share. Operating income was USD 157 million, down from USD 200 million the previous year. Net sales decreased by 5.2%  year-over-year to USD 3.8 billion, with comparable sales down 5.5 percent. Kohl's raised its forecast for diluted earnings per share for the year to USD 2.30 to USD 2.70, excluding any non-recurring charges, and adjusted the sales forecast to a decrease of 2.8 to 4 percent

The company highlighted strong performance in Sephora and growth in home and gifting initiatives. Kohl's also made strategic investments in stores to improve performance, and it predicted that Sephora would become a USD 2 billion business at Kohl's by 2025.

Kohl’s posts Q3 declines

What: The Saks Luxury Pulse survey found that 75% of luxury shoppers plan to spend the same or more on their holiday shopping this year, similar to last year's numbers.

Why it is important: The findings of the Saks Pulse survey reveal the holiday shopping intentions of luxury consumers which allows businesses in the luxury sector to tailor their strategies and marketing efforts accordingly.

57% of luxury consumers plan to spend the same or more on luxury goods in the next three months, with a slight decline among those earning USD 200,000 or more. More shoppers are planning to wait until after Thanksgiving to start their holiday shopping, with a 10% increase compared to last year. 64% of shoppers plan to do most of their shopping online, representing a 15% increase from the previous year.

Although economic concerns persist, 64% of luxury shoppers still feel optimistic about their own finances and there is a slight increase in the willingness of luxury consumers to pay full price for their purchases.

Luxury consumers also plan to spend 46% of their holiday budget on themselves, with Millennials more likely to adopt this trend.

Saks Luxury Pulse survey finds that most luxe shoppers will spend the same or more 

What: Lotte, Shinsegae, and Hyundai have been fined by the Fair Trade Commission (FTC) in South Korea for unfairly passing marketing costs onto their store tenants without prior notice.

Why it is important: The fines highlight the significance of protecting tenants' rights and preventing retail operators from unfairly shifting marketing costs onto their store tenants.

The fines totalled KRW 648 million won (USD 420,230). This is the first time the FTC has uncovered such an illegal act between outlet operators and store tenants. Lotte Shopping received the highest fine of KRW 337 million. Shinsegae Simon and Hyundai Department Store were fined KRW 140 million and KRW 120 million, respectively. The outlet operators shifted a total of KRW 588 million in costs to tenants during special sales promotion events between 2019 and 2020. The FTC plans to increase monitoring of major retail players to protect tenants' rights.

Lotte, Shinsegae, Hyundai fined for unfairly shifting marketing costs to tenants

What: IKEA and Lego are defying the decline of physical stores by investing in their brick-and-mortar presence while also prioritizing e-commerce.

Why it is important: Both companies believe that customers still value the experience of visiting a store and want to see and touch the products. Ikea has opened 60 stores in the past year, many of them in city centres rather than suburbs, aiming to attract customers for smaller purchases. Similarly, Lego has tripled the number of its stores under the leadership of its CEO, Niels Christiansen.

Both Ikea and Lego view stores as more than just places to sell products, but also as a means to connect with consumers and strengthen brand loyalty. Additionally, the retailers have found creative ways to leverage their existing stores, using them as fulfillment centers for online shopping.

Ikea and Lego bet big on the future of the store

What: Decathlon is set to open a new branch in RemsPark Waiblingen on December 7th.

Why it is important: With this new branch, Decathlon aims to serve customers in the Rems-Murr district and expand its reach in the greater Stuttgart area.

The store will cover a sales area of 2,000 square meters and will employ around 30 employees. The branch will offer a wide range of sporting goods, including items for mountain and winter sports, team sports, cyclists, and fitness enthusiasts. A separate area will be dedicated to fitness equipment, where customers can test the latest products on-site.

The branch will provide additional services such as Click & Collect and a buy-back service for used products, which will be resold at reduced prices. A service point will be available for small repairs, racket coverings, jersey flocking, and other services. The branch will also offer ski binding adjustments and a ski and snowboard drop-off and maintenance service.

Decathlon opens in RemsPark Waiblingen

What: The recent Altagamma & Bain report on luxury shows that physical stores are making a comeback at the expense of mutlibrand online players.

Why it is important: Department stores remains important places of interaction and discovery, especially in the luxury market, and have a card to play here.

After the pandemic, physical luxury retail stores are experiencing a resurgence, overshadowing online purchases, particularly from multi-brand e-tailers, which are now in decline. The pandemic initially boosted e-tail, favoring multi-brand platforms. However, as life returns to normal, physical mono-brand stores are thriving due to increased socialization and tourism, while digital channels are plateauing.

Luxury brands are opening fewer new stores, instead expanding and enhancing existing ones, turning them into experiential, cultural destinations. E-tail is now more a digital service supporting physical stores, with integrated online and offline customer experiences.

This renewed interest in physical stores is notably strong among younger consumers, especially Millennials, who are driving the duty-free luxury goods market through in-person shopping. Gen Z, a growing segment in the luxury market, also shows a preference for experiential, in-store shopping over online purchases.

Luxury brands are increasingly promoting their own e-shops, reducing reliance on multi-brand e-tailers and discount resale markets. This shift has impacted the profitability of e-tailers, who are also facing the burden of promotional costs previously covered by traditional retailers. Some e-tailers like MyTheresa remain successful, but others, like Farfetch, have seen significant declines.

To adapt, pure-play e-tailers need to revise their business models, focusing on cost control and flexible, innovative purchasing solutions through digital tools.

Luxury: the decline of multi-brand e-tailers

What: Walmart is introducing parcel stations in its stores to enhance last-mile delivery efficiency.

Why it is important: These parcel stations help Walmart build density into its last-mile delivery process, reducing costs and improving margins in the competitive e-commerce market.

These mini post offices within the stores will receive and deliver packages, providing customers with more time to place online orders for next-day delivery. The company plans to have over 40 parcel stations in operation by the end of the year. The packages from Walmart's fulfillment centers are transported to these stations using their private fleet and are then delivered to customers' homes through independent contractors or third-party carriers.

Walmart's Spark Driver network is also contributing to increased density by making deliveries from nearby stores and for other retailers through Walmart GoLocal. The retailer has succeeded in reducing store-to-home delivery costs by 15% and is working towards faster same-day delivery times.

Walmart adding parcel stations for faster delivery, greater density

What: Thailand is counting a lot on Chinese tourists who are not yet back in the country.

Why it is important: Thai retailers are gearing up to propose new experiences, but they need a critical traffic mass to be sustainable.

Despite lifted COVID-19 restrictions and a visa waiver, anticipated Chinese tourism recovery hasn't materialized, with fewer than expected arrivals and ongoing safety concerns. The industry is now shifting focus from the once-criticized "zero dollar tourism" groups to more affluent travelers and niche markets like LGBTQ+ visitors, who see Thailand as a freer, more open society. But overall, the Thai tourism sector still grapples with challenges including a reduced number of low-cost flights, a slower Chinese economy, and negative perceptions fueled by social media and films like "No More Bets," which depict Southeast Asia as dangerous. Despite these setbacks, Thailand continues to recognize the importance of Chinese tourists, who are among the highest spenders in the country.

Chinese tourists are not yet back to Thailand and it might last for a while

What: Dutch supermarket chain review its 7-points commitments, which were designed in 1996;

Why it is important: While some of them are dropped as the promise has become mainstream (”freshest food possible”), some other are interesting because they show the inability to maintain such promises in front of competition without putting the business model at stake. John Lewis has done the same earlier in 2023.

Dutch supermarket Jumbo is updating its "Seven Certainties" marketing strategy to align with changing customer expectations and market dynamics. Originally introduced in 1996 by founder Karel van Eerd, the Seven Certainties were distinct promises to differentiate Jumbo in a competitive market. Now, after 27 years, Jumbo is revising these certainties, acknowledging shifts in consumer behavior and industry practices. Notably, the chain is dropping its lowest price guarantee, which had become less relevant due to complex conditions and the rise of incomparable private labels. Additionally, certain assurances, like short checkout waiting times and guaranteeing fresh products, are being reconsidered or removed, as they have become standard expectations or obsolete due to self-service checkouts. Jumbo, however, continues to emphasize its commitment to offering value in terms of price, product range, and service.

In the Netherlands, Jumbo drops lowest price guarantee

What: Bloomingdale's has opened a scaled-down version of its store called Bloomie's in Seattle at the University Village lifestyle centre.

Why it is important: The opening of Bloomie's in Seattle represents Bloomingdale's strategic approach to expanding its brand and presence as well as maximizing relevancy in the retail market.

This is the third Bloomie's store, following openings in Virginia and Illinois. Bloomie's focuses on casual and contemporary styles, with curated brand mix and product categories based on local preferences.

The Seattle store predominantly features women's apparel, including private brands and denim from various designers. The first floor also includes a curated beauty boutique with luxury fragrances and skincare products. The second floor offers men's denim, sportswear, and classic collections.

Bloomingdale's plans to assess the success of Bloomie's format before considering further expansion.

Bloomie’s opens in Seattle

What: In Q3, Target experienced a 4.2% decline in revenue but managed to achieve significant profit gains by closely monitoring costs amid decreased consumer spending.

Why it is important: The company's flexible business model proved effective, leading to unprecedented growth in traffic and sales in previous years even though the current economic climate has forced consumers to make tough choices, resulting in delayed purchases and reduced discretionary income.

Target's net income for the quarter increased by 36.3%, exceeding analyst projections. While the company is not satisfied with its top-line trends, it remains focused on long-term growth opportunities. Target's inventory levels decreased by 14% compared to the previous year, contributing to improved productivity within its stores and distribution centers. Despite ongoing macroeconomic conditions, the introduction of new products and a strong line of owned brands have helped Target remain relevant to customers.

Target reports its Q3 results

What: Luxury is boosting sales in Diwali in a very visible way for the first time.

Why it is important: Another sign of India gradually replacing China in terms of strategic importance in luxury and retail.

This Diwali, luxury items are in high demand in India, with a surge in sales noted by retailers and companies due to a flourishing economy. Brands like Louis Vuitton, Dior, and Gucci are seeing increased sales, with customers spending more than in previous years. Exclusive festive products are being introduced, such as Bulgari's Mangalsutra and Jimmy Choo's Diwali collection, with Gucci launching a special gold version of its Horsebit 1955 bag. Luxury malls in cities like Delhi and Bengaluru are witnessing consistent bookings and growing demand for unique and distinctive luxury goods. Sales are also boosted by the availability of products locally that are otherwise sold overseas.

The trend extends to high-end chocolates with Laderach opening its first store in India, and luxury pastry brand Maison Laduree offering special Diwali treats. Even the pre-owned luxury watch market is experiencing a significant increase in sales, with a 3x to 4x jump expected this quarter. This shift in consumer behavior reflects a greater inclination towards luxury spending and gifting during the festive season.

Luxury boosts Diwali sales in India

What: Macy's Inc. CEO Jeff Gennette announced his retirement, effective February 2024 and discusses a transformation strategy called Polaris that he will leave for his successor, Tony Spring.

Why it is important: Understanding the future direction and strategies of Macy's Inc., including the focus on off-mall specialty stores and the importance of diversity and inclusion, is crucial for investors, employees, and industry stakeholders.

Spring's main challenge is to consistently grow Macy's Inc.'s profitability and avoid losing market share. To achieve this, the company plans to open more scaled-down off-mall specialty stores and off-price formats while closing some traditional department stores in malls. Macy's Inc. will also introduce a small-format store concept with 30 new locations planned by 2025.

Gennette emphasized the importance of diversity, equity, and inclusion (DEI) in the company's agenda and the need to attract more young talent to the retail industry.

The company is focused on managing its brick-and-mortar footprint, with some department store closures expected alongside the expansion of off-mall specialty stores. Gennette stated that there are healthy malls that will thrive but also acknowledged that others will decline over time. He described the pandemic as a tough period for the company, but Macy's emerged stronger by improving its financials and navigating the e-commerce surge.

Gennette also mentioned the company's commitment to sustainability and equality, highlighting the USD 5 billion Mission Every One program launched to support sustainability and diversity initiatives. He expressed pride in his team's efforts to bring DEI to the forefront of Macy's Inc.'s agenda and create a culture where employees can bring their authentic selves to work.

Jeff Gennette on the future of Macy’s Inc., malls and himself

What: Simon posted strong financial and operational performance in the third quarter.

Why it is important: Simon's solid third-quarter metrics showcase their strong financial performance and growth potential in the real estate investment sector.

Their net income attributable to common stockholders was USD 594.1 million, compared to USD 539 million in the previous year. Simon raised its guidance for the year and expects net income to be in the range of USD 6.67 to USD 6.77 per diluted share. Funds from operations (FFO) increased to USD 1.2 billion, or USD 3.20 per diluted share. Domestic property net operating income (NOI) and portfolio NOI both saw positive growth compared to the prior year period. Simon also increased its quarterly common stock dividend by 5.6% year-over-year.

The CEO highlighted that they have outperformed their peer group and are well-positioned to continue growing their business. Simon mentioned that while outlets and full-price malls have seen good tenant sales growth, luxury sales flattened out in the third quarter. Simon is confident in their ability to attract and retain tenants and continue to invest in redevelopment projects.

Simon raises outlook after solid Q3

What: Peek & Cloppenburg is joining the German Trade Association, HDE, along with its sister company, Anson’s.

Why it is important: This post-bankruptcy move is a significant step in addressing key industry challenges such as enhancing city attractiveness, sustainability, and skilled worker shortages, leveraging HDE's influence and network for the future of Peek & Cloppenburg.

The HDE's Managing Director, Stefan Genth, recognizes the importance of having P&C, a significant player in the German fashion trade, as a member, strengthening the HDE's role as a representative voice for the industry. P&C's long history of influencing retail and city centres in Germany, with over 160 locations in Europe and 90 in Germany, and its status as one of the largest employers in fashion retail, positions it as a key contributor to the HDE's initiatives for retail's future.

Peek & Cloppenburg becomes a member of the HDE