What: Macy’s is launching 4 new private labels in order to differentiate on the market.

Why it is important: This part of the business has remained essential for department stores across decades, and have gone through various cycles. After having been used to fill in gaps in price maps, they are now, and the IADS advocates for such a use, part of the retailer’s brand expression.

Macy's is intensifying its efforts to boost its private brand business with the launch of four new private brands by the end of 2025. The company's private brands currently make up around 16% of its annual sales, a number that it wants to increase back to around 20% as it did before the pandemic.

The first of these, called "On 34th," is set to launch on August 17. Macy's aims to expand its private brand offerings to cater to its customers' needs and desires while enhancing brand loyalty.

Macy's has conducted extensive research and data collection to inform its private brand strategy, focusing on customer preferences and trends. With this initiative, Macy's aims to differentiate itself in the market and attract more customers to its high-margin categories like apparel.

Inside Macy’s plan for private brand 

What: Qatar expands its investments and looks into Indian retail.

Why it is important: The Indian market is evolving fast and chances are that Reliance might feel eady to go beyond the borders very soon, just like what happened in China 10 years ago.

Qatar Investment Authority (QIA) will invest USD1 billion for a 1% stake in Reliance Retail Ventures, the retail branch of Mukesh Ambani's Reliance Industries, increasing its valuation to approximately USD100 billion.

Reliance Retail, the largest retailer in India, has been forming global partnerships with brands like Burberry and Tiffany to grow in India. In 2020, the company raised USD 5.72 billion from investors such as KKR, the Saudi Public Investment Fund, and the UAE's Mubadala. Headed by Isha Ambani, the retail unit includes international collaborations, consumer goods, e-commerce, and numerous outlets.

Recent valuations placed the company between USD 92-96 billion, hinting at a potential initial public offering. Mukesh Ambani has expressed plans to list the retail division, but details remain undisclosed.

This move aligns with QIA's evolving investment focus on sectors like retail (Harrods), tech and healthcare, moving away from assets like London's Shard skyscraper. QIA's past investments in India revolved around online retail ventures like Swiggy and Flipkart. Morgan Stanley and Goldman Sachs were the financial advisors for the transaction.

Qatar takes a $1 bn stake in India’s Reliance Retail

What: Lotte Group is considering selling its non-operating real-estate assets to improve its financial position amid poor business performance.

Why it is important: The company is in the review stage of possibly divesting its real estate holdings as it could be heading towards further loss due to their recent acquisition, Hanssem’s stock price dropping.

The possible proposed assets for sale are currently owned by Lotte Shopping and include its logistics centre in Bundang (valued at KOR 68 billion in 2022 but Lotte wants to sell for KOR 150 billion), a production facility in Ansan, both in Gyeonggi Province and a culture centre in Gwanak, Seoul. The sought-out total sale price for all the properties is KOR 250 billion (USD 186.7 million).

Lotte Shopping’s financial performance has declined since its acquisition of Hanssem in 2021. The company’s consolidated sales decreased by 7.2% and operating profit dropped 30.8% year-on-year.

Lotte Group seeks to sell real estate to cope with losses 

What: PdPaola is advancing its international development by opening in Printemps’ Paris Haussman store and the Lille store.

Why it is important: France is top country in turnover volume of the country so the agreement will strengthen the Spanish jewellery brand’s development abroad in retail.

The brand has also announced an agreement with the Italian department store, Coin which will be 6 opening across the country. Other new international openings include in San Juan (Puerto Rico), Armenia, Georgia, and Lima (Peru). There will be three points of sales opened in the Falabella stores in 2023.

PdPaola seals a strategic alliance with Printemps to land in France 

What: Brands are getting creative in their window displays to capture people's attention and represent the brand image in less literal terms than just showing the products.

Why it is important: The window displays increase customer engagement with the brand as it elevates the experience. This trend of contemporary displays can be seen across brands from entry-level to premium to luxury.

Two brands at the frontier of innovative displays are Jacquemus and JW Anderson who regularly amaze customers with abstract creative displays that bring an experience-oriented dimension to the shopping experience.

According to visual merchandising professors, window displays are used as a powerful communicator rather than just to promote popular merchandise or to shift underperforming products.

Window dressing in 2023? Clothing is strictly optional 

What: Nordstrom reports that losses from theft are at a historic high.

Why it is important: Major retailers are facing the same problem as executives are becoming more familiar with the rise in shrink.

According to executives, industry organisations, and law enforcement agencies, criminals are progressively stealing millions of dollars worth of merchandise and reselling it illegally.

Nordstrom says losses from theft at historic high 

What:Madison Avenue revives itself post Covid-19 by increasing new store openings, relocations, and expansions of fashion brands, restaurants, and galleries.

Why it is important: Madison Avenue is reclaiming its reputation as a luxury fashion destination.

The appeal of Madison Avenue is being restored by several anchor locations such as the Armani complex, Sotheby’s headquarters, Valentino, and a Hermès flagship store. The Madison Avenue Business Improvement District cited 25 businesses under development.

The opening of the Sotheby’s headquarters cements the neighbourhood as one of the most significant places in the world to buy art.

Richemont has also heavily invested in the street with the Panerai expansion this year, A.Lange & Sohne relocating and expanding, Jaegar-LeCoultre doubling, IWC expanding, Pater Millar relocating, as well as Chloé opening on Madison Avenue.

The 13% vacancy rate is slowly decreasing as luxury businesses are recognizing that it is now a good time to reinvest in the avenue especially due to rent being lower than the peak prices. The current average asking rent is USD 834 per square foot which is an 8.5% increase year-over-year but a 9.8% decrease from fall 2022.

Visitor traffic has increased by 9% in the first half of 2023 from last year and is expected to increase through the events that the BID has been using to encourage more visits. These include a festival in October with the Metropolitan Opera and a benefit for the Ronald McDonald House. Also, increasing stores are staging evening events to appeal to younger clientele.

On Madison Avenue, it’s year two of recovery

What: FJ Benjamin reports their annual earnings for the year ended June 30th.

Why it is important: FJ Benjamin shared their profit growth as well as cautiousness regarding future revenues due to weakening economies. It shows that fashion brands have alternative avenues for growth than the department store format in the world, including in department-store format-friendly market such as Southeast Asia.

The company reported a net profit of SGD 3.5 million (19% increase), with revenues increasing 7% year on year to SGD 86.5 million. With the lifting of Covid-19 restrictions, FJ Benjamin saw a recovery in sales in all three countries that it operates its 148 stores in (Singapore, Malaysia, and Indonesia), but is still cautious due to inflation. An exchange rate loss of SGD 3 million was noted due to the weakening Malaysian ringgit. There was a 9% decrease in sales in the second half of the fiscal year compared to the first due to weaker consumer sentiments; operating expenses rose 10% because of higher rents and staff costs.

The company also launched a multi-brand luxury retail format, Avenue On 3, in Singapore’s Paragon Shopping Centre, combining a footwear retail space, cafe, beauty treatment suits, a champagne bar, and a chocolatier. The opening of this was well received.

Business of Fashion 

Inside Retail

What: Over 400 former Debenhams staff who lost their jobs when the company went into administration have won their legal battle against the company.

Why it is important: The value of the claim is calculated to be around GBP 860,000 for the ex-employees affected by the redundancies in 2020.

The judge ruled that Debenhams failed under UK employment law legislation to properly inform employees of the risk of redundancies, and the retailer will have to payout the plaintiffs in the form of a protective award. The former employees will receive up to 90 days of gross pay capped at GBP 4,304.

More than 400 ex-Debenhams staff win redundancy legal battle 

What: Nordstrom’s CEO, Erik Nordstrom and CFO, Cathy Smith will participate in the Goldman Sachs Global Retailing Conference.

Why it is important: It will be beneficial to conference attendees to gain imput from the exceutives of a leading company in the retail industry.

The event will take place on September 13th at 9:35 a.m. EDT and will be webcast through the Events & Presentations section at investor.nordstrom.com.

Nordstrom to participate in the Goldman Sachs Global Retailing Conference

What: Walmart’s AI strategy focuses on personalisation for customers, associate operations, and supply chain optimisation to make shopping easier and more convenient while also fostering a more satisfying and productive work environment.

Why it is important: This quarter, the company exceeded Wall Street earnings expectations thanks to a 24% year-over-year growth in internet sales and will continue to invest in technology.

Retail businesses are focusing on how emerging technology can improve customer experiences. Walmart is currently using AI to run simulations of customer patterns on Black Friday to anticipate bottlenecks and boost its supply chain.

The company launched an augmented reality tool named Vizpick to help workers move products from the backroom to the sales floor more efficiently. Additionally, it joined GenAI Playground, an internal hub for employees to learn about the technology.

Walmart’s AI push prioritizes customer experience, personalisation 

What: Shein enters a partnership with Forever 21 owner, SPARC Group, and will sell Forever 21 clothing on their website as well as sell Shein items inside Forever 21 stores.

Why it is important: The partnership will allow Shein to test out brick-and-mortar sales and distance itself from new competition such as Temu. The company is redefining every aspect of the fashion distribution business.

In the deal, Shein gained a one-third interest in SPARC, and SPARC became a minority shareholder in Shein and will facilitate the expansion of Forever 21's distribution on Shein's platform which boasts over 150 million users. Industry experts suggest that the partnership could benefit both companies, but Shein might have an edge due to its current market position and growth strategy.

Shein aims to evolve past being only an online seller for cheap trendy clothes and expand into becoming an e-commerce marketplace, like Amazon, and getting third-party sellers to expand its offer outside products its manufactures.

Buisness of Fashion 

Footwear News 

What: Even though the situation is not as dire as a few months ago, as luxury still helps, department stores in London face a diverse reality: the increase of visitors in the UK is not not translating to retail sales.

Why it is important: Just like in Paris, many questions are rising when it comes to what would be a sustainable number of department stores on a reconfigured market marked by touristic flows changes and Brexit.

British luxury department stores are navigating a challenging retail landscape even though their revenue is on the rise.

Harrods has reported a substantial rise in pre-tax profit due to increased tourism and successful collaborations with brands like Dior and Louis Vuitton. Meanwhile, Harvey Nichols has seen revenue growth, although its flagship store's performance is still recovering to pre-pandemic levels. Selfridges faces financial pressures with significant debt after being acquired by Thailand's Central Group and Signa in 2021.

The New West End Company highlights the absence of tax-free shopping as the primary cause, which is leading international visitors to spend less in the UK. Although flight bookings from the US to London rose 17%, spending by American visitors in the West End dropped 1%. Meanwhile, travel from GCC countries to London increased by 7%, but their spending fell by 17%.

In contrast, US and GCC spending in European countries like France, Spain, and Italy surged significantly. Dee Corsi, CEO of New West End Company, emphasized the importance of international visitors to West End businesses and warned about the adverse effects of Britain no longer offering tax-free shopping.

Additionally, 77% of international visitors expressed they would spend more if they could reclaim VAT. Corsi urged the Government to reconsider its stance on the tourist tax, suggesting its removal could benefit the UK economy by around £350 million.

Despite challenges, luxury brands are reimagining distribution, focusing on immersive experiences, and asserting more control over product representation, which brings good and bad for department stores. On the positive side, pop-ups and creative collaborations are driving growth and offering unique customer experiences.

WWD

The Retail Bulletin 

What: Steve Madden is opening a new location on Oxford Street in London.

Why it is important: The brand is opening a second location in London.

The new location will feature a curated selection of women's and men’s footwear alongside Steve Madden handbags, including a full range of Steve Madden best-selling footwear.

The store is set to open in late August with a grand opening event on September 7th and will expedite the growth of the Steve Madden brand worldwide.

Steve Madden to open second flagship store in London

What: John Lewis is not finished with its necessary upgrade which will allow to reconnect with profits. Apart from side projects (housing) it is also taking significant, down-to-earth steps, such as introducing BNPL as a payment option.

Why it is important: One may wonder if such an introduction does not come too late as the big wave is behind us and both customers and governments are already starting to question the consequences brought by the BNPL options.

The John Lewis Partnership is considering implementing a buy-now-pay-later system, inspired by Klarna, to cater to younger consumers' expectations. This move aligns with the rising popularity of such payment methods, particularly among young women.

The retailer's ongoing recovery plan, aimed at cost reduction, improved customer service, and diversification into sectors like private rented housing, was discussed by CEO Nish Kankiwala.

The plan, focused on customer-centricity, cost efficiency, and enhanced technology, seeks to achieve £200 million in profit within two years and £400 million by 2025. A previous loss of £234 million, driven by inflation, was reported in March.

John Lewis introduces Buy Now Pay Later schemes

What: Amazon is eliminating 27 of its 30 private clothing brands in an attempt to reduce costs and address antitrust scrutiny. Amazon Essentials, Amazon Collection and Amazon Aware will be the 3 brands left.

Why it is important: Amazon has been often criticized for allegedly favouring its own products and disfavouring outside sellers on its platform. The U.S. Federal Trade Commission (FTC) investigated several big tech companies for allegedly breaking antitrust law: Amazon has been discussing an exit from the private brands business as a concession to the FTC.

Amazon also is scrapping private-label furniture, phasing out its Rivet and Stone & Beam brands once their stock runs out.

Amazon scraps 27 own-label fashion brands to cut costs

What:  Reliance Retail is predicted to lead the retail industry in the next decade due to India’s growing retail sector.

Why it is important: India’s growing GDP per capita will push Reliance Retail to the front of the retail industry.

Reliance Retail crossed 1 billion transactions in 2023 and the company’s financials have seen an upwards trend- operating revenue growing 30.4% YOY and EBITDA jumping 44.7%. The business has added over 3,300 new stores making the total store count 18,040 across India.

The per capita GDP of India has passed the USD 2,000 threshold which is promising for the retail industry as discretionary spending is also likely to trend upwards. Paired with Reliance Retail’s customer base of 249 million people, the company is the largest retailer in the country and is set to expand even more.

Reliance Retail operates stores in the electronics, fashion apparel, beauty, grocery, footwear, food, jewellery, toys, and e-commerce industry as well as luxury and lifestyle.

Reliance Retail says it is set to lead the retail industry in the coming decade 

What: Neiman Marcus launches its 2023 fall campaign, “New Frontiers” that marks a creative departure from previous campaigns.

Why it is important: The company aims to showcase its history and lineage to evoke a sense of nostalgia in its customers.

There are 53 brands featured in the campaign which was shot using the innovative technology of Stagecraft in a New York City studio - a cost effective alternative to hosting photoshoots on actual American landscapes. The Nieman Marcus catalogue, “The Book” will be produced in a limited-edition hard cover version and sent to top customers while soft cover versions will be distributed still to all.

The campaign introduces an anthology profile series called 'The Achievers' which spotlights five individuals each season; this inaugural edition highlights Wes Gordon, Cornelia Guest, CeeDee Lamb, Gregg Araki, and Amy Sall.

The company is executing a marketing plan across all channels that includes retail presentations, windows, print, stills, videos, connected TV, and digital screens.

Neiman’s fall campaign tackles ‘new frontiers’

What: New internet giants appear in Asia and the West should notice.

Why it is important: Coupang started by  offering discount items in Korea, but is now leading the market and growing upward by starting to sell fashion and luxury, to the point of worrying market players such as Lotte, Hyundai or Shinsegae.

Korea’s e-commerce giant, Coupang, posted an impressive Q2 performance and is optimistic about its global potential. Despite Indonesia’s recent restrictions on selling low-value imported items to protect its local SMEs, Korea is embracing international e-commerce, offering cheaper foreign-sourced goods.

Coupang’s “global marketplace” connects Koreans with international sellers and vice versa, benefiting Korean and Taiwanese consumers alike. Although Korea has historically protected domestic industries, Coupang supports free trade, especially given the challenges in their domestic market.

They previously exited Japan due to fierce competition, and their current expansion in Taiwan, centered on rapid delivery, is crucial. Despite impressive Q2 figures (USD5.8 billion revenue, USD145 million profit), Coupang faces internal challenges, with staff forming unions over concerns like automation. Investors are keenly observing Coupang’s Taiwan strategy.

Why Coupang is optimistic about its global marketplace development

What: Amazon introduces generative AI tech to summarise reviews from verified purchases so that shoppers can see common product themes.

Why it is important: The AI review will give customers an overarching summary of products as well as allow them to surface reviews that mention specific product characteristics.

Amazon reported that 125 million customers left 1.5 billion reviews last year and they have blocked more than 200 million reviews. The company utilizes investigators and Lachine learning models to spot fake reviews.

Amazon deploys generative AI to summarize reviews 

What: The Women’s World Cup offers marketing opportunities for Nike and Adidas thanks to record-breaking interest.

Why it is important: The 2023 Women’s World Cup is the most high-profile rendition of the event to date.

The Women’s World Cup in Australia and New Zealand is seeing unprecedented investment and viewership which is creating opportunities for brands to reach a wider audience. A record 1.5 million tickets have been sold for the tournament so far, up from 1 million sold in 2019.

Nike and Adidas are the main competitors in the marketing and sponsorship of the event. Nike has collaborated with Wales Bonner to design the match kits and casualwear for the Reggae Girlz, the Jamaican national team. Although Adidas is behind Nike in terms of individual team sponsorship- 10 teams sponsored to Nike’s 13, they are a key sponsor of FIFA and provide the match balls and referee outfits.

Both companies stand to gain significant marketing and sales boost if one of their partner teams wins the tournament in the final match on August 20th.

Seizing fashion’s World Cup opportunity 

What: John Lewis announces a deal with Google Cloud to provide customers with a more tailored and personalised experience.

Why it is important: The partnership will make the company more efficient and use better data insights to help curate products and services.

The deal with Google Cloud is a five-year partnership that will give John Lewis access to advanced AI technology as well as machine learning (ML) offerings.

John Lewis aims to be a 60-70% online retailer by 2025 and focus on the expansion if digital, virtual, and delivery services to keep up with consumer habits.

John Lewis continues digital push with GBP 100 million Google partnership

What: Central Thailand caters to all Asian tourists with this new payment option.

Why it is important: This might be a first step to the generalization of this offering across the international division of Central Retail.

Central Retail Corporation (CRC) has partnered with Ant Group to introduce Alipay+ across its stores in Thailand. This move aims to enhance convenience for Asian tourists from the Chinese mainland, Hong Kong, Malaysia, and South Korea by offering full services for international digital payments.

Users can make payments using their local digital wallets, such as Alipay, AlipayHK, Touch ‘n Go eWallet, and Kakao Pay, without the need for cash or currency exchange. The service will be available across more than 3000 Central Retail outlets in Thailand.

This partnership aims to target Asian tourists visiting Thailand, with plans to expand payment services to accommodate tourists from other countries. The introduction of Alipay+ coincides with a rise in Asian tourists visiting Thailand, and sales to international travelers at Central Retail stores have reportedly doubled year on year during the quarter.

Central Retail teams up with Ant Group to launch Alipay+ in Thailand

What: Target goes more fragmented when it comes to logistics, in order to increase speed and flexibility.

Why it is important: Ship from store is also increasingly adopted by department stores, as it maximizes efficiency.

Target has transitioned to using smaller regional warehouses over the past five years. This strategy, adopted by other giants like Amazon and Walmart, helps reduce inventory, trim shipping costs, and expedite deliveries by keeping goods closer to customers.

It represents a shift from centralized mega-warehouses. The benefits include quicker online order fulfillment and faster store replenishment. Such smaller hubs, or "flow centers," using automation, allow for efficient handling of large order volumes.

Target's implementation of this system led to a 17% inventory reduction and improved in-stock rates. Their flow centers in locations like Chicago and New Jersey have cut replenishment times by 20%.

Online orders are packaged at stores and sent to sortation centers for quicker delivery. Target aims to expand this system, planning five more sortation centers by 2026. Amazon and Walmart have adopted similar logistics strategies, focusing on regional distribution and quick deliveries while reducing overall inventory.

Target goes local to speed up order deliveries