What: British online fashion retailer Asos on Thursday reported a 14 percent drop in quarterly revenue but said its new strategy was starting to work as it returned to profitability, sending its battered shares higher.

Why it is important: The group, led by chief executive officer José Antonio Ramos Calamonte, detailed his strategy is to prioritise profit over top-line growth by re-vamping the retailer’s supply chain, cutting costs and increasing innovation last October.

Asos said core earnings, or adjusted earnings before interest and tax (adjusted EBIT), rose more than £20 million ($25.3 million) in the three months to May 31, its fiscal third quarter. It did not disclose the actual adjusted EBIT figure for the quarter.

“We are delivering on our plan to turn the business around: to right-size our stock; to generate cash; to reduce our net debt; and to structurally improve our profitability,” said the CEO.

Asos sales fall 14% last quarter as it prioritises profit 

What: The Australian department store’s difficulties have increased since its purchase by Anchorage Capital Partners.

Why it is important: The situation of department stores in Australia is very dire and different from the rest of Asia. Opportunities for new entrants might arise as real estate is going to free up with store closures.

David Jones, one of Australia's largest department stores, is facing uncertainty as it records a significant decline in sales revenue. The downturn is seen across its urban, rural, and suburban stores as consumers shift to online shopping and tighten their budgets due to repeated interest rate hikes and soaring inflation.

The store chain has struggled to meet its June targets following interest rate increases by the Reserve Bank of Australia in May and June. Sales have dropped by about 10% compared to the same period in 2022.

The decline in sales comes just months after David Jones was sold to Anchorage Capital Partners for $100 million. Despite the challenges, reinvestment in the stores is planned, with a focus on both in-store and online shopping experiences.

David Jones woes are not over 

What: US retail sales unexpectedly rose in May, showcasing resilient consumer demand in the face of mounting economic challenges.

Why it is important: The value of retail purchases climbed 0.3 percent after a 0.4 percent gain in April; Commerce Department data showed Thursday. Excluding autos and gasoline, sales were up 0.4 percent. The figures aren’t adjusted for inflation.

The overall figure beat all but one estimate in a Bloomberg survey of economists. Sales at 10 out of 13 retail categories advanced last month, in part reflecting greater spending on cars — which were widely expected to drop.

While the figures came in stronger than expected, they still show moderating consumer demand from the past year. Americans have kept spending even against a backdrop of elevated prices and higher interest rates, supported by a still-vibrant job market and pent-up savings.

US retail sales see unexpected growth 

What: The luxury retailer issued its first “People Report” and its second annual ESG progress report.

Why it is important: NMG is becoming more diverse, accommodating, and environmentally conscious allowing them to attract and retain talent.

The retailer’s first People Report details its progressive workplace policies, and initiatives on diversity, gender, and career development.

The reports show progress across a variety of areas from pay equity, workforce diversity and representation by women in the executive ranks and on the board, to speedier hiring, increased benefits, workplace flexibility, supporting diverse-owned brands, and reducing emissions.

Three years ago, the group looked at its culture and how to unleash the power of its people as they believe that the right culture drives the right behavior which leads to better performance.

Providing workplace flexibility enables employees to achieve a better balance between their careers and private lives and also makes hiring easier and faster. The group reports that it’s been taking 31% less time to hire people.

Through the development of its people strategy, called Way of Work (WOW), the company was able to outperform the market in terms of hiring and retaining employees, seeing a 34% increase in employee net promoter score from Q4 2021 to Q3 2022.

The group has also taken strides in diversity, reporting that 59 percent of those in vice president or higher positions are women and 57% of the members of its board of directors are women.

Additionally, racial and ethnic diversity in leadership roles starting at the vice president level and going higher increased from 18.2 percent in fiscal 2021, to 19.8 percent in fiscal 2022. 57% of the total workforce is non-white, compared to 53 percent a year ago.

According to group’s ESG report, the company is fur-free and has many goals in regards to ESG such as increasing sales from sustainable and ethical products and raising USD 3 million for charity by 2025 among others.

Neiman Marcus Group gets introspective

What: An opinion about Macy’s and Kohl’s recent results announcements.

Why it is important: It is high time that US stops considering itself as the centre of trade innovation, as many department store companies are doing extremely well in the world.

In this article, the author argues against the idea that department stores are making a comeback, instead stating that without significant changes, they will continue to struggle. The author uses Macy's and Kohl's as examples. Both companies recently reported quarterly results that, while exceeding Wall Street expectations, were "objectively terrible."

Macy's and Bloomingdale's comps were down 8.7% and 3.9% respectively, and year over year net income was nearly halved. Kohl's comparable store sales fell 4.3%, and its profit was primarily due to cost cuts. Both companies expect continued negative sales growth for the rest of the year.

The author criticizes Macy's for making bold claims about innovative strategies while delivering little change. Its initiatives such as the "Backstage," the "Market by Macy’s," the introduction of Toys R Us shops, the acquisition of Story, and an updated rewards program have not led to significant improvements. Despite competitors closing hundreds of locations, Macy's first quarter sales only went from $4.98 billion in 2019 to $5.5 billion recently.

Kohl's, despite initiatives like the roll-out of Sephora shops, a new small store format, in-store Amazon returns, and various merchandising initiatives, has seen its sales decrease from $4.1 billion in the first quarter of 2019 to $3.4 billion recently.

The author concludes by suggesting that these retailers are not doing enough to adapt to the changing market. They are failing to win, retain, and grow a sufficient customer base, and their market share continues to decline. In contrast, retailers like Ulta Beauty, which now has a market value more than three times Macy’s and Kohl’s combined, continue to outperform them. The author argues that unless these retailers make more significant changes, they will continue to struggle.

Macy’s and Kohl’s keep running to stand still 

What: The Suburbia department chain is adding a new store to its portfolio in the Tampiqueño territory.

Why it is important: El Puerto de Liverpool is successfully expanding the department store’s presence throughout Mexico as it continues to open stores in addition to the 15 opened in the last fiscal year.

The new store is estimated to have about 5,000 square meters of surface area and will open in Altama City Center, which is said to be the most important shopping center in the state.

Suburbia expands in Tampico

What: The luxury jeweller is the first in the industry to receive approval from the Science Based Targets initiative (SBTi) for its net-zero emissions target.

Why it is important: Tiffany & Co.’s goals are in line with the latest climate science and the need to limit global warming to 1.5°C.

SBTi has verified Tiffany’s long-term target of achieving net-zero greenhouse gas emissions across its operations (Scope 1 and 2) and supply chain (Scope 3) by 2040. The jeweller has also received approval for its 2030 near-term greenhouse gas reduction target.

Tiffany & Co. aims to reduce Scope 1 and 2 emissions by 70% and reduce Scope 3 emissions by 40% against a 2019 baseline.

The company has already made progress towards its goals, reducing emissions by 30% in 2022.

To reach a 90% reduction, the retailer plans to engage and decarbonise its entire value chain, focusing on deep and rapid emission cuts guided by climate science and industry best practices.

Additionally, the new NYC flagship store is on track to receive WELL Platinum certification and LEED Gold certification.

At five locations, Tiffany has on-site solar installations, and the company plans to expand its investment this year by installing solar panels at its diamond polishing facility and jewellery manufacturing site.

The jeweller currently sources 91% of its global electricity from clean, renewable sources, including on-site solar and renewable electricity credits, in over 25 countries.

Tiffany & Co. becomes first luxury jeweler to receive net-zero target approval

What: Nike has begun quietly re-entering into wholesale deals with retailers like DSW and Macy’s after pivoting to direct-to-consumer sales in 2017.

Why it is important: Nike and other companies have found that relying solely on DTC can lead to unaffordable customer acquisition costs and does not always yield an increase in revenue or profit margin. Besides, growing competition from brands like On and Hoka, which have thrived due to their savvy wholesale distribution strategies, has motivated Nike to reconsider its wholesale approach.

Nike’s new partnerships with Dick’s Sporting Goods and Zalando are more collaborative, allowing the brand access to customer insights. They also recently re-entered into relationships with retailers like Macy's and renewed their partnership with Foot Locker.

In new wholesale deals, Nike has incorporated elements of data sharing, similar to its DTC model. Customers shopping through certain retailers can link their Nike membership programme, offering dual benefits of incentivising loyalty to Nike while granting the retailer access to sales data.

Wholesale has other advantages. The model provides an outlet for easing excess inventory, a problem Nike faced during the pandemic. It also enables Nike to reach consumers wherever they are, including multi-brand retail spaces.

However, it's important to note that while Nike is re-embracing wholesale, it's not completely shifting away from its DTC strategy. Instead, the company aims to find a balance and establish a symbiotic relationship between its wholesale and DTC channels, thus ensuring it remains a dominant player in the market. This diversification strategy, leveraging the advantages of both channels, allows the brand to maintain a broad reach while also enjoying the benefits of a more direct connection with its customers.

Wholesale still accounts for the majority of the brand’s sales, generating USD 25.6 billion in 2022, compared to USD 18.7 billion in direct sales.

Nike’s complex relationship with wholesale

What: Replicating what has already started in Brazil, Shein is going through a second stage in Mexico.

Why it is important: Shein hopes to boost its production and optimize its logistics business in parallel through small local factories that can be incorporated into its business scheme.

The strategy is to invest in training so that Mexican manufacturing plants reproduce the products it sells on its e-commerce platform, just as it has done in Brazilian territory where it already has 200 partner factories.

Without specifying locations and dates, the president of Shein Latin America announced that this next step will take place soon, probably before 2024.

Mexico is a key piece in Shein’s strategy in Latin America 

What: M&S has unveiled a new Beauty Takeback Scheme where empty product packaging can be dropped at 40 stores across the UK.

Why it is important: The initiative is estimated to collect over two tons of empty beauty packaging within the first year.

Formed in partnership with the recycling firm Handle, the new program will allow customers to return any form of plastic or aluminum beauty packaging from any retailer.

Dedicated boxes will be located in Marks & Spencer beauty departments and the materials and components will be used to create new packaging and products.

The initiative targets the parts of packaging that are often missed and aims to create a simple solution for customers to live lower carbon lives.

Marks & Spencer launches beauty recycling program

What: Galeria has closed 19 stores as part of its restructuring efforts, with a further 22 stores expected to close by January next year.

Why it is important: Germany’s largest department store group is undergoing major changes after the completion of its insolvency proceedings, with plans to close around 129 of its branches.

Following the completion of the group’s insolvency proceedings, Galeria has closed 19 stores this month.

Despite the closures, one branch in Dusseldorf was able to come to an agreement with its landlord and will remain open.

At the end of the restructuring process, Galeria will have 88 branches remaining according to previous plans.

Galeria closed numerous department stores this month

What: The US private equity-back Authentic Brands Group (ABG) has acquired British heritage brand Hunter.

Why it is important: Brands are increasingly concentrated within conglomerates looking for scale, including when at the negotiation table with department stores

The acquisition drives ABG’s strategy of diversifying its portfolio with brands that originate outside the US and comes as part of the firm’s brand-building approach.

The deal was supported by Authentic's existing partners, Batra Group and Marc Fisher Footwear, who will be fully responsible Hunter's retail operations and its future expansion on both sides of the Atlantic.

The Batra Group will be responsible for designing and developing Hunter footwear, apparel and accessories in the UK and Continental Europe.

Meanwhile, in the US, Marc Fisher Footwear will become the brand's core footwear partner, focusing on the footwear design, wholesale and e-commerce operations.

The move adds to ABG’s growing portfolio of brands, as it acquired Ted Baker, Reebok, David Beckham's DB Ventures and Vince last year.

Authentic Brands Group acquires Hunter Boots

What: As excepted, the court has opened the self-administration proceedings of Peek & Cloppenburg KG which allows management to remain authorized to act and issue instructions.

Why it is important: The self-administration proceedings are a move to position Peek & Cloppenburg KG for the future and adapt it to changing markets.

Peek & Cloppenburg KG's self-administration proceedings have been opened by the district court in Düsseldorf.

The restructuring, which includes reductions of 350 administrative jobs, can now go ahead as the company aims to prepare a detailed restructuring plan and strike an agreement with creditors.

The insolvency money period has ended and the firm's pay schedule can now return to normal.

Discussions on the plan with equity providers and debt are expected to begin in the summer.

District court of Düsseldorf gives P&C the go-ahead for self-administration

What: Property developers in China are set to build 8 million square meters of retail space, a sign of long-term confidence in the currently troubled but increasingly competitive market.

Why it is important: Despite a property slump and low consumer sentiment in the mainland, a higher-than-usual volume of new retail space is set to launch this year.

Due to a regulatory tightening on mainland Chinese developers, Hong Kong firms are jumping on the opportunity to expand further into the mainland.

Hongkong Land, the developer behind the Landmark mall and other global brands, plans to invest USD 8 billion in a luxury retail mixed-use scheme in Shanghai. It also plans to build ten malls in six other cities across the mainland and two new mall concepts within the next five years.

China is heavily mall-based, with 78% of first stores opened by retailers being located in shopping centres. This means that relationships with mall landlords can make or break a brand’s business.

Around 8 million square meters of new retail space will launch in China this year, an increased number due to the delays caused by the pandemic.

Despite lower consumer sentiment, many businesses are confident that the mainland Chinese consumer growth story remains intact for the long-term and middle-class consumption is still set to rise.

Swire Properties will also invest HKD 50 billion (USD 6.4 billion) to grow its Taikoo Li and Taikoo Hui mall brands in tier-one and emerging tier-one cities and some mainland firms are in expansion mode despite the regulatory tightening on debt levels.

Hong Kong developers increasingly find themselves pitted against developers from Asian countries: Malaysia’s Kerry Properties and Singapore’s CapitaLand are two examples. Newer developers like Urban Revitalization Force, which is constructing half a dozen TX malls in the country, are taking a different approach by carving out a niche: youth culture and investing in local brands.

China’s fashion mall developers in turf war

What: Macy’s Inc. sees potential for growth through smaller format stores.

Why it is important:  The smaller format stores offer Bloomingdale's a path to growth with major potential ahead, as they are tailormade for customers who demand more from a shopping experience than just products to buy.

Macy's Inc has found a model to shrink Bloomingdale's to prosperity following the closure of around 80 stores in recent years throughout the company portfolio.

This year, the company plans to open four new Market by Macy’s to add to the existing ten and one new Bloomie’s to the two that are already operating.

Because Bloomingdale’s has a higher-income target market, is better shielded from any potential downturn than the middle-income customer base of Macy's.

This is proving true based on a company report, as Macy's active customers dropped 4% from last year, while Bloomingdale's grew 5%.

The smaller stores give the retailer an opportunity to reach affluent shoppers in emerging luxury hubs in second-tier cities and suburban locations.

Bloomingdale’s SVP and director stores described the Bloomie’s stores as sharper, specifically in terms of the productivity of its resources.

By opening one store per year, the retailer is able to digest learnings from each store and apply them more broadly. While each store is individually designed for its specific location, the retailer has been able to use its learnings to pivot and meet customers’ expectations.

The smaller format stores will also help deliver the meaningful shopping experiences younger generations expect as they want more than just products to buy, which is also important to the lifecycle of the company’s business.

Because of the smaller format, Bloomie’s is poised for a successful future as they are able to slide into street-side and outdoor mall locations through a three-pronged strategy: In-fill, where the retailer can open a Bloomie’s in an area with an established flagship store, Replacement, where a Bloomie’s replaces a flagship store, and New Market, where a Bloomie’s opens in a new area.

Bloomie’s is how Bloomingdale’s can shrink itself to growth 

What: Despite the department store’s net sales falling, the company still plans to invest up to USD 3 billion in technology over the next three years.

Why it is important: The company is continuing to invest in growth and not losing sight of its long-term goals as it looks to rebound from a weak quarter.

Macy's is cutting back on CapEx projections but will continue to invest in growth, particularly in technology.

The company’s CFO and COO has taken responsibility for stores, supply chain, and technology, with the aim of stitching these areas together and modernizing Macy’s technology infrastructure to support its omnichannel goals.

Macy's has invested in data and analytics technology within stores and has redesigned its website and mobile app, strengthening its omnichannel communications.

The company reported a decline of 6.8% in sales in Q1 and also slashed its full-year guidance.

In March, executives laid out a capital spending plan to invest USD 1 billion in 2023 and up to USD 3 billion over the next year, with the primary focus being digital and technology products.

Macy’s remains committed to tech investments after sluggish quarter 

What: The unsecured creditors of Debenhams will not recover the GBP 1.3 billion owed to them before the retailer’s collapse.

Why it is important: A progress report from a liquidator revealed that Debenhams, which was once one of the leading names in UK department stores, had no funds available for unsecured creditors.

The department store went into liquidation during the pandemic and was acquired by Boohoo Group shortly after it began the liquidation process.

Debenhams’ debt included GBP 323.6 million in relation to its revolving credit facility and GBP 202.5 million in unsecured loans.

Debenhams collapse left unsecured creditors with GBP 1.3 billion losses 

What: The retailer reported a first quarter net loss of USD 205 million and loss per diluted share of USD 1.27.

Why it is important: Nordstrom was impacted by declining revenues and charges associated with its withdrawal from Canada, however, the retailer still beat market estimates for first quarter sales.

Nordstrom has recorded a net loss of $205m in Q1, due to declining revenues and charges linked to its withdrawal from Canada.

Its first quarter 2023 results contained a pre-tax charge of $309m correlated with drawing down Canadian operations, which is still in progress. The shutdown of Canadian operations, which includes 6 department stores, seven Rack stores and e-commerce, is expected to be finalized in June.

Revenues for Nordstrom fell 11.6% from Q1 2022, including 175 basis points negative impact related to the Canadian withdrawal.

Digital sales decreased 17.4% year-over-year, adjusting for the effect of lower supply resulting from the pandemic.

Most categories in the US were down versus 2022. Activewear was the strongest category while beauty and men’s apparel performed above average.

Designer sales were the toughest category for the retailer as post-pandemic trends slowed, with men’s dresswear being the biggest contributor to sales.

The company anticipates revenues will drop by 4 to 6% this year.

Nordstrom reports first quarter 2023 earnings

Nordstrom reports first quarter 2023 earnings WWD Article

What: Signa disinvests in a major mixed-use project but keeps on building it upon completion.

Why it is important:  The sale includes some Galeria flagships that will keep on operating under the supervision of the new owner.

Commerz Real, a subsidiary of Commerzbank, has purchased the 134-meter tall, 32-story Mynd tower and the traditional Galeria department store connected to the tower in Berlin from Austrian Karstadt owner, Signa.

The sale, which is the largest real estate transaction in the capital in 2023, occurred two years ahead of schedule. Commerz Real, which previously held a 20% stake in the project, is now the sole owner.

However, Signa will continue to develop the construction project, which has about 100,000 square meters of rental space, until its expected completion in 2025. The purchase price has not been disclosed, but experts estimate it to be close to one billion euros. The deal is still subject to approval by the Federal Cartel Office.

Signa sells the Alexanderplatz real estate to Commerz Real, including a Galeria department store 

What: La Rinascente doubles down with its local anchoring by inking a partnership with the iconic Florentine fashion fair.

Why it is important:  It is an astute way to at the same time proclaim its attachment to the city of Florence, and benefit from its visibility and positioning.

Italian department store group Rinascente is celebrating the renovation of its Florence store with a two-day 'Be Florentine' event. The event will kick off with a private concert for 250 international guests and continue with a live show at the Purple Gallery.

The renovation of the Florence store, which began in 2018 and ended in 2021, has given the interiors a quintessentially Florentine feel. The store now stocks 800 brands, about 100 more than before, with a focus on fashion and emerging labels.

The event will also showcase the work of an emerging designer selected from the Pitti Uomo competition.

Rinascente's e-tail sales are expected to reach €100 million within three years, and the company plans to exceed its pre-Covid revenue results this year.

La Rinascente teams up with Pitti in Florence 

What: A growing number of customers are feeling ashamed by their own consumption.

Why it is important:  After the flight shaming, the buy shaming?

A growing niche of consumers, known as "reductionists," are aiming to disconnect from the fast-paced fashion system and buy less.

This trend aligns with a broader shift towards less conspicuous consumption due to increasing concerns about the climate and cost-of-living crises.

However, the number of people actually changing their shopping habits remains small. The fashion industry's marketing tactics, which capitalize on deep-rooted emotions and turn shopping into a form of entertainment, make it challenging for consumers to resist buying new items.

Despite this, sustainable fashion advocates are finding ways to make buying less more accessible and appealing, such as promoting the financial savings and environmental benefits of a shopping detox.

The rise of the reductionists? 

What: Saks is partnering with resort operators to establish Five Avenue Clubs’ personal service and styling suites in locations where it doesn’t have stores.

Why it is important: The new initiative is a way for the retailer to deliver personal service to a wider audience and reach customers in locations where it doesn’t operate stores.

Saks Fifth Avenue is bringing its Fifth Avenue Club personal shopping and styling service to luxury resorts across America, with plans to open 10 locations in 2023.

So far, three Fifth Avenue Club suites in resorts are open in Hawaii and two locations in California. Additional Fifth Avenue Club suites are expected to open at luxury properties in Maui, Nashville, Orlando, Charleston, Deer Valley, Nantucket and Santa Fe.

The company is leasing suites in the resorts for a minimum of one year to test locations and understand the value of the market. Small local teams who are well connected in their communities have been recruited for the suites in the resorts.

Saks' lead partner in the strategy is Marriott International and its portfolio of luxury brands, but other partners have been brought on board as well.

Clients will make an appointment and consultations will be done remotely to determine the client's needs. Then the suite gets curated for the client by the time of arrival at the resort.

Saks extends its brand of personal service to luxury resorts

What: Shop Pay becomes a component usable independently from Shopify.

Why it is important: The more people use Shop Pay, the more people will do one-click purchases and hence the better conversion Shopify itself will have for merchants.

Shopify, a platform known for aiding high-growth brands, is set to offer its advanced technology to larger brands. The firm already supports prominent names such as Glossier, Alo Yoga, Figs, and Staples. In 2023, it introduced "Commerce Components," giving more enterprise retailers access to Shopify's technology.

The company is now providing the "Shop Pay conversion magic" to the world's largest brands, even those not on Shopify. This move enables the implementation of an accelerated checkout process for enterprise clients, enhancing their customer experience.

The Shop Pay component will be available for enterprises in the US, Canada, UK, Australia, and New Zealand. It reportedly increases conversion by up to 50% compared to guest checkout. Additionally, Shopify is enhancing its integration with Adyen, a global payment platform, to provide more payment options to enterprise retailers.

Shop Pay expands beyond Shopify 

What: Consumer confidence remains low in China as the country’s youth unemployment has reached record heights and anxiety over Covid-19 lingers.

Why it is important: Results from 618, a key shopping event and indicator of the overall health of China’s consumer market, saw its slowest growth rate in three years.

The results from the promotional event are indicative of the health of China’s consumer market, and spending on major e-commerce platforms only rose by 5.4%.

The wealthiest consumers are helping drive recovery in the luxury sector, however other consumers are remaining cautious.

National retail sales growth in China slowed to 12.7% in May, a clear deceleration from the 18.4% in April. This deceleration combined with weaker-than-expected data resulted in economists at key banks lowering their growth forecasts for the year.

China’s youth jobless rate has risen to 20.8% in May, which has set a new record and is four times the country’s overall unemployment rate.

Another contributing factor is continued anxiety over Covid-19 as another variant spreads, creating more uncertainty.

The confidence of the consumer isn’t fully there yet across the board, but in the luxury sector, high net worth individuals are making up for the purchases that aren’t being made by mass consumers. However, there is still an uneasiness for consumers and confidence still isn’t as high as it should be.

The pandemic not only impacted the economy but also consumer psychology. Chinese consumers aren’t as confident in the future and are more focused on the country’s negative demographics, especially younger Chinese consumers who are experiencing their first slowdown.

Customers are becoming more value-oriented, presenting opportunities for new and niche brands to gain traction as consumers show more interest in quality and features rather than big labels.

By sector, double-digit growth has been seen in categories like nutraceuticals and pet. Health supplements are seeing strength as the self-care trend increases and fragrances are also growing as they are viewed as an affordable luxury.

Why consumer sentiment remains subdued in China