What: Consumption remained strong in August, despite slowdowns in June and July.

Why it is important: As long as the job market remains stable, American customers might keep on spending like there is a tomorrow.

August saw a 0.6% rise in U.S. retail sales, despite downward revisions for June and July, with gasoline prices significantly contributing. This growth indicates a potentially strong GDP for the current quarter, with predictions at a 3.5% annual increase. Despite concerns about high borrowing and reduced savings, consumer spending remains strong, largely fueled by a robust job market. The employment rate, especially among those with less education, has risen, leading to increased spending. While job security concerns exist, they're currently lower than in 2019. If the job market weakens, consumer spending might decline, but for now, confidence in the American consumer remains high.

US consumers remain optimistic after all

What: Nordstrom has expanded its men's shoe floor at its NYC store, doubling its size to offer customers a broader selection of styles.

Why it is important: It offers customers a wider selection of styles, including new brands, and enhances their shopping experience.

The expansion includes 15 new-to-Nordstrom NYC brands, including AllSaints, Asics, Axel Arigato, Craft, Ecco, Frye, Karhu, Mephisto, Merrell 1trl, New Balance, Polo Ralph Lauren, Puma, Saucony, and Wolf & Shepherd. The store also added expanded assortments from brands such as Magnanni, Santoni, To Boot New York, and Cole Haan. The newly redesigned Nordstrom x Nike shop and a permanent On shop-in-shop have also been introduced on the expanded shoe floor.

The floor now offers a total of 80 brands, covering categories such as designer, dresswear, modern sportswear, contemporary, trend, young customer, and active. Customers can also visit the Jason Markk area, which is the brand's first East Coast retail store and shoe care service location, offering sneaker cleaning and a selection of local, seasonal beers on tap.

Nordstrom doubles the size of men’s shoe floor at NYC store

What: Following the uproar leading to a unusual strike, Fortress has decided to keep all stores, including the ailing ones.

Why it is important: The flagship, which is profitable, will still be turned into a consumer electronics store.

Fortress Investment Group, after acquiring Sogo & Seibu, intends to keep all 10 department stores in Japan operational and retain the current workforce. Seven of these stores are in the Tokyo metropolitan area, with the remaining three in Akita, Fukui, and Hiroshima. Despite the challenges faced by the regional stores, Fortress is committed to supporting them. The U.S. investment firm has increased its renovation budget from JPY 20 billion to JPY 60 billion. This includes plans to introduce an outlet of the prominent electronics retailer, Yodobashi Holdings, in Tokyo's Seibu Ikebukuro store. Yodobashi, in collaboration with Fortress, contemplates further expansion in other locations with a proposed investment of nearly JPY 300 billion. The Yodobashi outlet in the Seibu Ikebukuro store is projected to utilize half the total retail space. Additionally, any job redundancies caused by the renovation will be accommodated by other companies affiliated with Fortress or Seven & I Holdings, the former owner of Sogo & Seibu.

Fortress to keep all Sogo Seibu stores for now

What: The National Retail Foundation buys the Reverse Logistics Association.

Why it is important: NRF's acquisition of RLA demonstrates their dedication to sustainability and their desire to help its members achieve a holistic circular economy.

This acquisition is aligned with NRF's commitment to sustainable practices and aims to strengthen its position in the industry. Reverse logistics involves managing the supply chain to handle the return of goods from customers to retailers, distributors, or manufacturers. The need for reverse logistics has been on the rise due to the increasing popularity of online shopping and product recalls. RLA recognizes the significance of reverse logistics in the circular economy and its crucial role in sustainability initiatives.

The two organizations offer valuable information, conferences, educational forums, and networking opportunities to their members. Member companies of RLA include Target, Amazon, Best Buy, Walgreens, JKA Logistics, Kroger, ThredUp, Radius, HP, and more. Both RLA and NRF have a significant overlap in membership, including companies like Costco, Target, CVS, Home Depot, Kroger, Burlington, and Macy's.

NRF acquires the Reverse Logistics Association

What: Primark expects higher profits thanks to the Barbie T-shirt and price increases.

Why it is important: The optimistic outlook on profits gives insights into the company’s health and the impact of films in the fashion industry.

Primark's like-for-like sales in the UK increased by 7% despite heavy rainfall, with flagship stores benefiting from the return of tourists and day trippers to big cities. The company announced 7% price rises for the summer, with further increases expected in the autumn and winter. Primark's full-year sales are forecasted to be 15% ahead of last year, with the UK contributing to 11% growth and Europe 18%. Makeup and moisturizers are also selling well for the clothing chain. Primark's UK trial of click-and-collect services has been extended to include womenswear. The group's profit margins are rising due to eased costs for materials and freight, and Primark has implemented selective price increases while reducing prices on certain kids' clothing items.

Primark predicts bigger profits after strong Barbie T-shirt sales and price rises 

What: Falabella has announced the resignation of its general manager, Gaston, Bottazzini, effective January 1, 2024.

Why it is important: The company is experiencing significant changes in its organisational structure after the appointment of the president, Enrique Ostalé who is the first president that is not part of one of the founding families of the business.

Bottazzini joined Falabella in 2008 as the general manager of Falabella Financiero and held the position for 10 years before taking over the general management of Falabella.

Regarding Falabella's financial performance, the company has incurred losses in the first semester of the current fiscal year. Its gross profit has decreased by 16.9%, resulting in a net loss of CLP 5,153 million.

Falabella loses its general manager, Gaston Bottazzini

What: German retailer Peek & Cloppenburg goes fur free.

Why it is important: Fur free is no longer a feature for high-end department stores and becomes a norm across the range.

Peek & Cloppenburg Düsseldorf is becoming a source of inspiration for other fashion companies. The German fashion retailer, which includes all 13 Austrian branches, has officially gone fur-free with its 160 physical stores and five online shops, as announced by the animal welfare organization Vier Pfoten, the official representative of the "Fur Free Retailer" program in Austria.

This decision marks the company's strong stance against animal cruelty and fur products, aiming to raise awareness for animal welfare and positively influence the industry. Over 1,500 brands and retailers are now part of the global "Fur Free Retailer" initiative, which is dedicated to ending the breeding and killing of animals for their fur.

Peek & Cloppenburg goes fur-free

What: J.C. Penney faces declining sales and profits in Q2 amidst challenging retail landscape.

Why it is important: The results highlight the challenges faced by the company and the need for a significant transformation in the ever-changing retail landscape.

J.C. Penney's second-quarter net sales declined by 10% to USD 1.6 billion, while total revenue, including credit card revenue, fell by 10% to USD 1.68 billion. Digital sales increased as a percentage of total sales, but the exact amount is unspecified. The merchandise margin improved by 70 basis points, driven by strong performance in kids and home categories. Store visits also increased by 350 basis points, while inventory decreased by 14%. However, net income for the quarter plummeted by 65% to USD 36 million, and EBITDA for the first half of the year dropped by 56% to USD 147 million.

J.C. Penney is working on a billion-dollar turnaround strategy amidst a challenging retail environment, especially for department stores, as consumer discretionary spending faces pressure. The company's declining sales highlight the need for a significant transformation to address both internal and external factors impacting its performance.

J.C. Penney announces Q2 results 

What: Instacart is going public and needs to maximize its attractivity.

Why it is important: Grocers are part of the equation, but the partnership with Instacart comes at their expense, which raises questions about the IPO.

Instacart, targeting a valuation under $10 billion in its upcoming IPO, relies on supermarket partnerships for success. The company claims most grocers lack the infrastructure for effective e-commerce, citing U.S. grocers' relatively low investment in tech. Instacart's strengths lie in its technological prowess and the advertising revenue generated from its extensive user data. However, while supermarkets gain online sales through Instacart, they face fees and potential lost advertising revenues from brands that would typically pay for in-store placements. As online sales grow, brands might shift ad budgets from physical stores to online platforms. If supermarkets find the costs outweigh the benefits, they could leave Instacart or renegotiate for better terms. Larger retailers, like Kroger, have developed their own retail media arms and see digital advertising, particularly retail media advertising, as a significant revenue stream. As Instacart's presence grows, ensuring a balanced relationship with supermarkets becomes critical.

Instacart needs grocers’ support to make its IPO successful

What: Nordstrom has made executive leadership appointments in its merchandising and store organizations.

Why it is important: These appointments aim to strengthen Nordstrom's focus on delivering exceptional customer service and expanding its reach in key markets.

Jamie Nordstrom has been appointed as the Chief Merchandising Officer, bringing his 28 years of experience to the position. He will report to Pete Nordstrom, President, and Chief Brand Officer. Additionally, two other executives, Fanya Chandler and Gemma Lionello, have been appointed as President, Stores, and President, Rack, respectively, to oversee the strategy and execution of the company's stores.

Nordstrom announces executive leadership appointments 

What: Indonesia makes a drastic move to safeguard traditional retail

Why it is important: It is the first country to ban sales on Tiktok. Who will be next?

Indonesia has prohibited e-commerce transactions on social media platforms to safeguard traditional retail, a move primarily affecting TikTok and its shopping feature. The ban aims to defend offline businesses in the region from predatory pricing on social platforms, which threatens small to medium enterprises. The Trade Minister  emphasized the regulation ensures a level playing field in business competition and user data protection. Furthermore, e-commerce platforms in Indonesia must set a minimum price of $100 for certain directly imported items and ensure products comply with local standards.

TikTok is the primary business affected by this ban. TikTok has over six million local sellers and 125 million users in Indonesia. The country recorded e-commerce transactions worth nearly $52 billion last year, with 5% occurring on TikTok, primarily via live-streaming. TikTok is owned by ByteDance, a Chinese tech firm.

Indonesia bans e-commerce on social media

What: IKEA has launched two sustainability initiatives in the United States, aimed at reducing its climate footprint and becoming a climate positive business by 2030.

Why it is important: These initiatives reflect a broader trend in the retail industry towards sustainability and reducing carbon footprints.

The first initiative involves a solar installation project in seven stores and fulfilment centres, which will include solar car parks, rooftop panels, and battery energy storage systems. The second initiative focuses on renewable heating and cooling, with plans to replace and optimize HVAC systems in five store locations.

These sustainability projects align with IKEA's goal of being powered by 100% renewable energy and eliminating fossil fuels from its operations by 80% by 2030. The solar project is a continuation of IKEA's existing solar power project in Paramus, New Jersey. Once operational, the seven solar units are expected to collectively produce 13,600 megawatt hours of energy annually, offsetting 5,883 tons of carbon emissions.

IKEA's sustainability efforts also include transitioning to a circular business model and using more renewable sources for its furniture production.

Ikea expands on sustainability initiatives 

What: Due to debt, Seven & i sells the Sogo & Seibu department store chain at a discounted price

Why it is important: The deal includes the Seibu Ikebukuro profitable flagship in Tokyo, which comes at a very good price

Seven & i Holdings has completed the sale of Sogo & Seibu department store operator to Fortress Investment Group. The enterprise value of Sogo & Seibu was estimated at JPY 220 billion, but after accounting for debt, the actual transfer price was JPY 85 million. Seven & i expects to book a non-consolidated extraordinary loss of JPY 145.7 billion related to the transfer of Sogo & Seibu shares and loss compensation. Fortress plans to partner with Yodobashi Holdings in its turnaround plans for the department store chain.

Seibu department stores are sold for USD 600,000

What: EBay is entering the fashion consignment market as it introduces a new service to compete with other apparel resellers.

Why it is important: This strategic move reinforces eBay's commitment to becoming a premier destination for fashion and luxury consignment.

While the initial focus is on designer handbags, eBay plans to expand the service to include other categories in the near future. In order to ensure the success of this offering, eBay has partnered with Linda Lightman, a well-established and experienced seller. The objective of this collaboration is to overcome logistical challenges and position eBay as a top choice for luxury and fashion consignment. By leveraging the expertise of Linda Lightman, eBay aims to establish a strong presence in the consignment market and attract both buyers and sellers in the fashion industry.

EBay launches consignment offering for luxury fashion sellers

What: Target Corporation is closing nine stores due to rising concerns over theft and safety.

Why it is important: Retailers are increasingly concerned about safety and are prioritizing efforts to address theft and crime.

The affected stores are located in Portland, the San Francisco area, Seattle, and New York City. The company stated that theft and organized retail crime have put the safety of their employees and customers at risk, as well as impacting their business performance.

Target operates nearly 2,000 stores and has been actively addressing retail crime issues. The retailer had previously warned that shrinkage, or missing inventory, would lead to a USD 500 million reduction in earnings this year. They have seen a 120% increase in thefts involving violence or threats of violence. Despite efforts to prevent theft, Target has concluded that operating these stores safely and successfully is no longer feasible. The company will continue to invest in store security and technology to combat theft and seeks collaborative solutions with the community, government, and industry.

Target is closing nine stores due to rise in organised theft 

What: Shein has opened a pop-up store in the Forum Schwanthaler Höhe in Munich for Oktoberfest.

Why it is important: The pop-up store will bring the brand even more visibility in Germany after its first temporary store in Berlin earlier this year.

The store will be open until October 1st and offers over 1,800 items of clothing and accessories for women, men and children including traditional Oktoberfest fashion such as dirndls and blouses. There will be exclusive discounts, surprise gifts and special student discounts to appeal to younger customers.

Additionally, after the pop-up shop, Shein plans to donate fall and winter clothing, shoes and accessories with a total value of EUR 90,021 euros to WeißerRabe GmbH.

Shein sets up Oktoberfest pop-up in Munich

What: After 10 years of operations, Ikea closes its innovation center which reached its goals.

Why it is important: this relates to how to deal with innovation in large companies, and how to create a favourable environment that impacts the rest of the company.

Ikea is closing its innovation platform, Space 10, located in Copenhagen, after achieving its goals. Space 10 was established in 2014 as a collaboration between Ikea and Danish design collective ArtRebels. It operated independently and focused on how Ikea could contribute to a better future. The lab worked on various projects, including the development of the Ikea Place virtual reality app and exploring city store concepts. With its objectives met, Space 10 is closing on a high note.

Ikea closes its Copenhagen-based innovation center after 10 years

What:  A testimony from Zalora CEO on how AI is transforming the business.

Why it is important: The article is down to earth and provides a set of examples on how department stores could address AI in their operations, if this is not yet the case.

Zalora, a leading e-commerce platform in Southeast Asia, has integrated advanced artificial intelligence (AI) capabilities from OpenAI into its proprietary platform, Titan. This move aims to redefine online shopping experiences, streamline business operations, and elevate industry efficiency standards.

Key insights from the integration:

1. Purpose of Titan: Developed by Zalora, Titan integrates OpenAI to address e-commerce challenges and bolster innovation. It automates production, refines search precision, minimizes manual work, and facilitates smarter, AI-driven customer service, according to Sumit Jain, Zalora's CTO.
2. AI in E-commerce: Jain perceives AI as transformative for e-commerce. It can reduce operational expenses, solve intricate business problems, and augment human roles. Examples include using AI for crafting product descriptions, refining search functionality, assisting customers post-purchase, and lowering production costs.
3. Search Enhancements: One practical outcome of Titan has been the "Did you mean?" suggestions for users, optimizing their product search. This has led to a 4-6% conversion rate uplift since the system's inception.
4. Operational Benefits: Titan improves operational efficiency, as demonstrated by a 30-50% increase in forecasting accuracy, enabling Zalora to scale effectively. Additionally, the system aids in enriching product descriptions and optimizing product imagery processes.
5. Automation: Generative AI is used for automatic attribute tagging (like color, style, and occasion) based on product images, leading to auto-generated SKUs and product descriptions. This streamlines search functionality, ensures quality, and reduces manual labor.
6. Business Intelligence: Zalora is leveraging AI for business intelligence chatbots, which mine stored data to provide quick and precise key findings. This expedites insight retrieval, enabling staff to focus on high-impact activities. Furthermore, AI-powered Slack chatbots have been employed for customer service and system troubleshooting.
7. Future Prospects: Beyond these applications, Zalora envisions using chatbots for other internal processes, such as handling expense claims. Jain emphasizes that the integration of OpenAI is just the beginning of their AI-focused evolution. One significant advantage of this technology is its cost-effective in-house innovation, striking a balance between developing internally and collaborating with third parties.

In conclusion, Zalora is harnessing the power of AI, through its Titan platform, to innovate its e-commerce operations, enhance customer experience, and set new industry standards.

AI in Retail: the use case of Zalora

What: Fitch Ratings has placed Falabella SA on a negative watch due to its deteriorating operating trends and limited visibility regarding debt reduction.

Why it is important: The negative rating highlights the company's operational and financial challenges, urging stakeholders to closely monitor its performance and debt reduction efforts.

The company's weak performance is attributed to a combination of internal and external factors, including high inflation, elevated operating costs, and sluggish consumer demand. While Fitch Ratings predicts that Falabella will have enough liquidity to manage its net leverage until 2025, it also anticipates improved operating results within the next 18 to 24 months as the operating environment stabilizes in Chile.

Fitch Ratings places Falabella one step below Cencosud, as Cencosud's retail formats are predominantly focused on the food and supermarket segments. Successful implementation of effective strategies and adaptability to changing market conditions will be crucial for Falabella to overcome its challenges, regain stability, and enhance its competitiveness in the retail industry.

Falabella receives a negative note from Fitch Ratings

What: Sainsbury’s has announced its plans to open branded fashion destination hubs in its stores.

Why it is important: The company aims to cater to the evolving needs of its customers by offering a broader range of fashion brands and styles.

These hubs will be alongside its Tu Clothing line and will feature third-party brand partners.In addition, Sainsbury's will provide exclusive product ranges and expand its clothing offering to include curve, maternity, lingerie, and tailoring. Customers will have access to a wider choice of fashion brands both in-store and online, with over 30 brand partners available on the Tu.co.uk website.

The first stores that will launch the fashion destination hubs will be Stanway in Colchester, Crayford in Dartford, Bybrook in Ashford, Longwater in Norwich, Calcot in Reading, Osmaston Park in Derby, Selly Oak in Birmingham, Sydenham in London, and London Colney in St Albans. The brands will arrive in store between September 24th and October 6th.

Sainsbury’s to open branded fashion destination hubs in at least 50 stores

What: In spite of a timid situation in tourism, leading to ailing duty free businesses, both Shinsegae and Hyundai posted encouraging results.

Why it is important: Just like in Europe, Chinese tourists might be the cherry on the cake once they return to a country very much in need of them.

Shares of major South Korean retailers Shinsegae Co. and Hyundai Department Store Co. are on the rise, with increasing optimism about their sales growth due to the return of Chinese group tours to Korea. Despite experiencing a drop in the second quarter earnings, both companies showed potential for recovery, with an improvement in operating margins. Notably, foreigner sales accounted for 4% of department store sales in Q2, a rise from 2% in Q1. Shinsegae recorded a decline in duty-free sales, but increased its operating profit by 40% after making adjustments in merchant commission fees. Hyundai's duty-free business also saw reduced operating losses in Q2. Experts predict that the resumption of Chinese tours will boost the profitability of duty-free shops. Additionally, Hyundai G.F. Holdings Co. plans to integrate its core affiliates, including Hyundai Department Store, streamlining its governance structure.

Hyundai and Shinsegae shares are up following encouraging results

What: Pinterest is launching a pop-up store called Possibility Place in London's Covent Garden.

Why it is important: The store brings the online platform to life in a physical space.

The two-day event aims to bring the online platform to life in a physical space on the British high street. The pop-up will feature various sections, including a corner shop called "Provisions," where visitors can find everyday essentials with a twist. There will also be a beauty bar called "Parlour" where visitors can get nail art, tattoos, and hair styling. The "Projects" section will offer workshops on trending homeware pieces and interactive demonstrations from Pinterest's top interior creators. In addition, expert sessions hosted by creators will provide visitors with tips on elevating everyday meals and upcycling household items.

The pop-up is open from September 29th to September 30th, offering visitors a unique and immersive experience.

Inside Pinterest’s reimagined high-street pop-up

What: Australia’s Myer reports best profits in 18 years.

Why it is important: Just like for many other department stores, this performance could be either a peak or the beginning of a new story according to strategic decisions made in an ever-changing context.

Myer reported a profit of $71.1 million, marking its best annual sales in 18 years at $3.36 billion. However, the second half of 2023 saw sales growth slow to 0.4% and a 1.9% drop in comparable store sales over the last six weeks. CEO John King attributes this to broader macroeconomic factors. Despite challenges over the years, Myer believes it's set for success, with a debt-free status and over $100 million cash on hand. The company has focused on its "Customer First" strategy, emphasizing online growth. Online sales reached $690.5 million in 2023, with a target of $1 billion annually in the next five years. Additionally, Myer's loyalty program boasts 4.2 million active members. Significant leadership changes are anticipated, with King exiting in 2024 and CFO Nigel Chadwick retiring next year. The largest shareholder, Solomon Lew, owns nearly 30% of Myer. The company sees a future in expanding online sales, improving distribution, and leveraging its loyalty program with new partnerships.

Myer reports record sales

What: Bloomingdale's celebrates an icon that has become synonymous with New York.

Why it is important: Department stores always strive to be as recognizable as the city where they are located.

The iconic Bloomingdale's Brown Bag, originally designed by Massimo Vignelli in 1971 for the store's linen department, is celebrating its 50th anniversary. Synonymous with New York City style, it's a bag that many have come to recognize and cherish. To commemorate the half-century mark, Bloomingdale's is hosting a series of events and collaborations. The department store will have a special pop-up featuring Brown Bag-themed merchandise from brands like Ralph Lauren, Stoney Clover Lane, and Clinique. An event at Bloomingdale’s 59th Street flagship will include activations on each floor, artistic contributions from Matthew Langille and FIT students, and themed refreshments at various pop-ups.

On October 7, Bloomingdale’s beauty department will join the celebrations with various activations, including raffles and special offers. While the main festivities are in New York, Bloomingdale's locations across the nation will also mark the anniversary on September 9.

Bloomingdales celebrates 50 years old of its Big Brown Bag