What: Taiwanese department store has optimistic outlook for 2023.

Why it is important:  Never underestimate customers’ appetite for retail in troubled times.

Shin Kong Mitsukoshi Department Store, a Taiwanese department store chain, aims to grow its business by 20% annually during the mid-year sales season as in-person shopping regains popularity. The company has already seen a 15% year-on-year increase in sales in the first five months of the year.

To attract customers, the store plans to offer more bonus points that can be used for goods and services, expecting customers to convert about 180,000 bonus points and enjoy up to 40% discounts.

The store has observed increased demand for golfing, yoga, and camping gear among Taiwanese shoppers, while Southeast Asian customers show interest in cosmetic products.

Shin Kong Miotsukoshi aims for 20% growth 

What: Bergdorf Goodman is revamping its luxury men’s only store to feature new boutiques, a VIP dressing area, and a food and beverage service.

Why it is important: The updates are being made to address the changing needs of customers, which includes the demand for occasion-based clothing.

Most of the changes will be taking place on the second floor, which features tailored clothing, furnishings, and luxury sportswear.

Some of the key changes include Charvet moving to a new boutique, a shop for Cesare Attolini, and the addition of Brunello Cucinelli’s Satoria Solomeo line which will be the only distribution point in the US outside the company’s own boutique.

A VIP dressing area has also been added that will offer a food and beverage service from Goodman’s bar, alterations, and a lounge.

The new additions complement the existing assortment which includes shops for Brioni, Tom Ford, Giorgio Armani, Ralph Lauren Purple Label, and Ermenegildo Zegna among others.

Bergdorf’s has seen a significant increase in sales of more tailored pieces and furnishings, with occasion-based clothing continuing to be very strong for events and celebrations in the post-pandemic world. Additionally, the store has seen growth in luxury sportswear as well as a resurgence in neckwear./nbsp]

More renovations are planned for the store in the future as the luxury retailer is seeing a strong response to its men’s business.

Bergdorf’s revamps second floor of its men’s store 

What: The Dallas-based luxury retailer reported a 9% drop in revenues and a 25% decline in earnings before EBITDA to USD 124 million.

Why it is important: Luxury US consumers are starting to spend less on fashion and more on travel and services, impacting luxury retailers such as Saks and Neiman’s.

Despite the decline, results indicated a normalizing of sales since the summer and were also consistent with the company’s expectations.

The group saw strength with its most valuable customers as they are less impacted by the macro environment and continue to buy with strength, especially in shoes, jewellery, and men’s.

While NMG’s inventory is up compared to last year, the retailer is looking to reduce expenses and ensure that its inventory matches demand for the next fiscal year as it is also impacting margins.

Gross margins continue to be pressured by the highly promotional environment and negative year-over-year comparisons are attributed to last year’s pent-up demand and record full-price selling across the luxury industry.

The group believes that it’s growing in the right places amid the difficult economic environment, thanks to its business model and focused strategies that put it in a strong position to deliver long-term, sustainable, and profitable growth.

In its last fiscal year ended July 31, NMG recorded USD 5 billion in revenues on a gross merchandise value basis and generated USD 495 million in adjusted EBITDA. According to the company, liquidity remains above USD 1 billion.

Neiman Marcus posts challenging quarter

What: The newly appointed CEO is trying to mobilize minds ahead of two crucial votes.

Why it is important: John Lewis Partnership has the occasion to show that the group is still as agile as in the past, and able to transform itself in order to reconnect with growth.

John Lewis' newly appointed CEO, Nish Kankiwala, has warned that the department store and grocery group is not producing enough profit and requires rapid change. Kankiwala's comments come as the company prepares for a confidence vote in the chair's leadership and revival plan next month.

The employee-owned company, which owns department stores and supermarket Waitrose, reported a pre-tax loss of £234 million last year.

Kankiwala aims to ensure the executive team delivers the overall commercial plan and helps return the retailer to profitability. A staff poll revealed areas that need improvement, such as rewards, strategy, and transformation. The partnership's council will cast two confidence votes in May, expressing their view on the chair's leadership and support for future progress.

John Lewis not producing sufficient profit according to CEO 

What: The e-commerce giant is offering customers USD 10 to pick up a purchase rather than have it shipped to their home.

Why it is important: Amazon joins many other retailers who are working to reduce costs for delivery and returns as consumers demand slacks.

Amazon has been emailing customers an offer of USD 10 to retrieve their orders of USD 25 or more at company pickup points.

While the retailer has trained customers to expect fast, no-fee deliveries and returns, the company has recently made several moves to reduce delivery-related costs across the organization.

A USD 1 fee was introduced earlier this year for packages retuned via UPS where a pickup point was located closer. Additionally, its annual Prime subscription that includes free shipping benefits increased by USD 20, orders under USD 25 now incur a fee for same-day delivery, customers are encouraged to have packages delivered on a designated day of the week, and the minimum order thresholds for free grocery delivery were raised.

Amazon offers shoppers USD 10 to pick up purchases as it targets delivery costs 

What: More than half of Debenhams former stores remain empty with only 27% of vacant units having future use plans.

Why it is important: High streets are struggling to fill the void of the former department store.

The department store closed 124 stores in May 2021 and was acquired by Boohoo who then took the brand solely online.

27 of the stores have been taken over by Marks & Spencer and The Range, however, 73% of units remain empty and only 27% of locations have future use plans.

While some stores will be turned into residential and retail developments, high streets are struggling to fill the void as its difficult for single occupiers to justify rent on the size of the locations.

73% of former Debenhams stores remain empty

What: Flannels has launched the Heat Ignite Prize to support young digital-first entrepreneurs aged 18-25 in the UK to apply with either a business idea or an existing business in its early stages in the categories of fashion, innovation, and circularity.

Why it is important: The Heat Ignite Prize provides platform for young entrepreneurs to showcase their digital-first business ideas and receive financial support, mentoring, and visibility.

Three winning businesses representing each category will be awarded a GBP 10,000 grant and a year of mentoring.

The prize is part of the Youth-Phoria programme, which champions the “excellence and ambition of a new generation through a series of initiatives and cultural events”. It is also an opportunity for Flannels to invest in and support promising young entrepreneurs who can bring fresh ideas and innovation to the fashion industry.

Flannels backs Heat young entrepreneurs prize

What:  The iconic Dutch chain is getting back on track

Why it is important:  This is the third year in a row that Hema posts a profit, after a decade of losses.

Hema, a Dutch retail chain, has reported a significant increase in sales and profits, with gross sales rising 20% to 1.966 billion euros in the financial year 2022, and profit before tax rising to 31.6 million euros. The number of customers in stores and online grew by almost 35%, which the retailer attributes to a strategic course set two years ago to "make Hema really Hema again".

The new strategy is being implemented in renovated stores, with four stores reopened in March and April 2023 after extensive remodeling and successful testing of new concepts. Based on this success, Hema plans to renovate more stores by summer 2023.

Hema sales are up +20% 

What: Peek and Cloppenburg Düsseldorf announced the first restructuring measures of the bankrupt fashion chain, with 350 jobs being cut.

Why it is important: The company is restructuring its organization and reducing its costs considerably as it looks to bring its company back into the profit zone.

The German department store will be cutting about 350 of over 1,500 jobs in its central departments in Düsseldorf. Peek & Cloppenburg KG will be the first to be affected, with around 200 of the 800 jobs at its headquarters being cut.

Sales in all 67 sales outlets in Germany and online as well as the approximately 6,000 employees who work in the stores shouldn’t be affected by the situation.

P&C Düsseldorf is cutting jobs

What: Target aims to simply the return procedure in the US in order to decrease their operational costs.

Why it is important:  While it is not suitable for all markets, some retailers might very well have to follow the success of this new service, in order to define if it can help save a few productivity points.

Target has introduced a new national service called Drive Up Returns, which allows customers to return items without leaving their cars. This service is an extension of its Drive Up online order pickup program and is expected to encourage more sales and lift customer loyalty.

By offering easy and convenient returns, Target hopes to encourage customers to make more in-store purchases. Additionally, this service can reduce shipping costs and increase efficiency, contributing to the bottom line.

While curbside return services are no longer a distinguishing competitive edge, Target's Drive Up Returns service can still retain customers and encourage loyalty. The company may consider integrating its Target Circle rewards program into Drive Up Returns to further deepen customer engagement.

Target introduces Drive Up returns 

What: The Indian company will take a 51% stake in the fashion group in a deal valued at 1650 crore rupees (about USD 202 million).

Why it is important: ABFRL is prepared for its next phase of transformational growth with this acquisition as it expands its ethnic wear portfolio.

TCNS Clothing’s portfolio includes traditional Indian brands which the company has sold through more than 650 exclusive brand outlets, 2,300 large format stores, and 1,100 multi-brand outlets in its home market.

Aditya Birla Fashion and Retail acquires TCNS Clothing

What: Shein embraces sustainability by moving into circular fashion.

Why it is important:  This move might be very well at the same time misleading for customers (thinking that their consumption could go greener without having to change their habits) and unfair for competition, which is much more scrutinized than Shein when it comes to sustainability efforts.

Fast-fashion brand Shein has partnered with circular economy company Queen of Raw to source and repurpose deadstock fabric materials, aiming to achieve full circularity by 2050. This move is expected to reduce Shein's reliance on new materials and clear out unused stock from other brands.

However, critics argue that this initiative does little to shift the industry towards true circularity and may perpetuate the cycle of wasteful overproduction. They suggest that the environmental footprint of the garment is not reduced through this process as the deadstock material was still produced in the same way as a newly ordered fabric.

Critics also warn that this could incentivize Shein to produce new garments at a faster rate, further fueling their hyper-fast fashion model. They argue that significant sustainability improvements can only be achieved by fundamentally overhauling operating models, producing more durable garments, and avoiding overproduction.

Why Shein’s new sustainability campaign might perpetuate 

What: Wellness is becoming a top priority in the design of retail environments as shoppers desire commercial spaces that promote emotional, physical, and social benefits.

Why it is important: The wellness economy, which is valued at USD 1.5 trillion, represents an opportunity for physical retailers to reinvent their spaces and create a communal experience that brings wider value to consumers.

Complex retail concepts which tap into the wellness economy are emerging around the globe as consumers want spaces that go beyond the typical retail environment.

Shopping has the potential to influence multiple dimensions of well-being by providing leisure-oriented activities and creating social cohesion for the community, according to the VP of retail strategy and design at Figure3.

Retailers should look to transcend their space, creating an environment that promotes healthier ways of living and opens consumers’ minds to new possibilities.

At Hyundai Department Store in Seoul, the store’s floors are organized a central atrium with sensory elements. 50% of the store’s floor space is dedicated to spaces where people can socialize in an experiential environment.

As health and wellness continue to be top priorities for consumers, the communal nature of retail developments will be vital to their survival. Retailers have the opportunity to reinvent their experience and create a space that encourages connection and becomes a gathering place for community.

How wellbeing is remodeling the malls of the future

How wellbeing is remodeling the malls of the future

What: With improved Augmented Reality and in-person shopping returning, retailers are rethinking their approach to smart mirrors.

Why it is important: AR mirrors have the potential to improve a multitude of challenges in physical retail as well as build engagement, inform purchase decisions, and be a welcome tool in building experiential retail.

A decade ago, smart mirrors were considered a key to the “Retail 3.0” revolution, however, the technology failed to take off.

With better technology and more openness from consumers, brands and retailers are now looking at smart mirrors again.

In new versions, digital content overlays reflections and can include anything from digital apparel and accessories to product details. The technology can track the body as well as detect and respond to specific movements, such as swiping the hand to change an outfit.

Many brands have already begun testing smart mirrors such as Nike, Men’s Warehouse, Tommy Hilfiger, Coach, and Mugler. Each brand has used the technology in unique and engaging ways from digital try-ons to games.

As an estimated 65% of apparel, footwear, and accessories purchases are made in-store and many potential challenges in physical shopping could be solved with an AR mirror.

Some of these solutions include the hesitation among consumers to physically try everything on, the opportunity to narrow product selections, increase product discovery, and visualize additional items that are out of stock. AR mirrors can also attract attention and increase time in store, which has been shown to increase basket size.

While only 12.4% of US adults are currently using AR for shopping, it is expected that AR will have 21.1 million more US users than VR and the gap will continue to widen.

However, challenges remain as the technology still isn’t able to accurately reflect size and fit in a way that can completely replace the fitting room. Therefore, the purpose for AR mirrors in fashion might be fun and to provide an experience.

This is why many brands are choosing to focus on affinity and engagement. For example, Nike’s gamified AR mirror experience to score store discounts was moved to the front of the store, which increased foot traffic. Another example is creating experiences that are otherwise impossible such as Mugler animating its fragrance with a special digital effect or Coach enabling passersby to its store window to try on its popular Tabby bag.

Retailers have the option to buy the technology outright at more than USD 100,000 or rent by the month which can be tens of thousands of dollars.

More features are also being introduced such as CRM integration, item suggestions, an option for customers to print out instant photos, and uploading a fuller catalogue of inventory.

Smart mirrors are getting a second look from fashion

What:  The iconic luxury brand stays true to its “invitation to travel” motto

Why it is important:  Louis Vuitton is accelerating in hospitality, travel and leisure. The mega-brand slowly grows outside of the pure retail boundaries. Department stores should take notice.

Louis Vuitton has opened a lounge on top of its store in the Doha airport. The space includes designer furniture pieces, as well as a 3 star Michelin restaurant. The conditions of use are not specificied.

Louis Vuitton opens an airport lounge 

What: The department store is laying out its game plan as it looks to make a comeback under new ownership and management.

Why it is important: The retailer is looking to attract younger customers through new strategies, while also maintaining its older, traditional and working-class family appeal as it is in the strongest position it has been in for many years.

In 2020, Penney’s was purchased for USD 800 million by Simon and Brookfield Property Partners who have since lifted the business out of bankruptcy and has cleaned up the balance sheet.

The retailer is looking target customers ranging from 20 to 40 years through a variety of new strategies. One being the rollout of JCP Beauty departments to all of its stores following the exit of Sephora.

Penney’s is also looking to create a more modern and fashionable image through advancing its private label programs, adding new labels, and pursuing more collaborations with designers and celebrities.

Additionally, the department store is looking to continue growing its digital sales, securing a bigger niche in dress-up categories, directing a significant amount of its budget towards centralized POS checkouts, and utilizing a portion of its budget improve stores.

While the number of stores is expected to remain stable between 650 and 700, Penney’s CEO stated that they may be closing some stores, relocating to better sites, and opening new stores in certain markets.

For the first time in five years, the retailer saw an increase in foot traffic and customer frequency which the retailer attributed mainly to its assortment. In 2022, the company’s EBITDA exceeded USD 500 million and liquidity stood at USD 1.6 billion.

Where JCPenney’s is placing its bets

What: The Belgian chain of department stores recorded a profit of EUR 2.78 million in the last financial year and its turnover increased by more than EUR 50 million to EUR 285 million.

Why it is important: After suffering a loss of more than EUR 12 million in 2021, the department store had returned to profitability by the end of 2022 and its strategic repositioning is seeing success.

Inno is continuing its transformation by focusing on its luxury offer and has announced the makeover of two of its stores in Brussels to evolve towards the premium range.

The turnover of Inno climbs by EUR 50 million

What: Dubbed ‘Le Club Printemps’, the new loyalty programme is said to be simpler and more generous.

Why it is important: Retailers are increasingly relying on top customers which makes loyalty programmes key to retain these top spenders. The 3-tier status programme features Club Printemps Days which offer members up to a -15% discount in cash back paid on the Printemps Club pot.

Many services, surprises, private invitations, previews and a gift on birthdays are offered to members.

Printemps has a new loyalty programme 

What: Saks has launched a campaign that spotlights the importance of mental well-being in collaboration with a mental health and wellness influencer.

Why it is important: The retailer is highlighting the importance of mental health while also raising funds for its foundation which aims to make mental health a priority in every community.

The campaign will feature custom content across Saks-owned digital platforms throughout May and will also include a curated collection of wellness items that support mental health with 10% of online sales from the items and Saks brand merchandise being donated to the Saks Fifth Avenue Foundation.

Saks Fifth Ave and the Saks Fifth Avenue Foundation have donated more than USD 6 million to US mental health initiatives and reached more 6.6 million individuals with messages that combat the stigma and shame around mental health.

Saks launches multifaceted campaign for mental health awareness month

What: The Swiss duty-free specialist exceeded its Q1 sales targets thanks to the strong recovery in tourism.

Why it is important: Thanks to the loosening of travel restrictions in China, the retailer saw sales jump 276.9% in the first quarter in the Asia-Pacific region.

With more than 2,300 stores in tourist locations around the world, the retailer saw turnover increase by 113.4% to CHF 2.35 billion (EUR 2.41 billion) compared to 1.12 billion last year and its quarterly sales beat estimates by 10%.

Dufry: the return of Chinese tourists is boosting the travel-retail business

What: The Chilean company revealed that its Q1 profit reached USD 192 million, a 23.5% drop compared to the same period in 2022.

Why it is important: Despite the challenging macroeconomic environment in South America and slowdown in consumption, Cencosud maintained double-digit revenue.

The decrease in profit was a result of an increase in financial expenses, mainly attributed to the company’s acquisitions of The Fresh Market and GIGA Atacado as well as the negative impacts of exchange fluctuations in the region.

Cencosud recorded a 17.9% increase in revenue and closed the period with 161 million tickets which represented a 18.1% increase. The retailer also saw online revenues increase 7.4% with online sales totaling USD 380 million and online tickets amounting to 5.5 million.

The CEO of Cencosud stated that the company will continue to promote its efficiency measures and  omnichannel as a complement to its physical stores as it navigates the challenging macroeconomic environment in the region.

Cencosud sees its profits fall by more than 20%

What: The Malaysian department company Parkson is facing financial difficulties in many countries where it operates.

Why it is important: While Vietnam is deemed as a strategic market for Central, Parkson is exiting it and files for bankruptcy. The article depicts an incorrect view regarding the state of department stores, as it seems that Parkson’s situation is more due to mismanagement than to a general context supposedly applying to all department stores in the world.

Parkson Holdings Bhd, a retail giant, is a significant casualty of this changing retail landscape, having filed for bankruptcy in Vietnam and dealing with ongoing debt issues at home. Its financial difficulties started before the Covid-19 pandemic, with losses for the financial year ending in December 2022 at RM119 million.

An early entrant in the Malaysian retail market, Parkson has downsized from 102 stores to around 80 since 2020, suffering significant losses due to decreased demand for premium items post-pandemic and the rise of e-commerce. While Parkson has ventured into e-commerce, there are concerns that this may negatively impact in-store sales. However, others believe that e-commerce could boost the growth of large retail chains by driving customers to brick-and-mortar stores.

Parkson faces difficulties in Vietnam and Malaysia 

What: Ikea is investing in new store formats as customers complained that its locations were too far away.

Why it is important: The retailer is listening to customer feedback and focusing on providing new store formats that are convenient for shoppers.

Ikea is investing USD 2.2 billion in its US omnichannel strategy, supporting the opening of eight new stores, nine Plan and order points, and 900 pickup locations and an additional EUR 3 billion in new and existing stores internationally.

Despite the retailer reporting eight in ten customers starting their shopping experience online, Ikea is focusing on its in-store experience as there will still be a need to touch and feel products in person according to the retailer’s COO.

In addition to introducing smaller city store locations, Ikea is also opening Plan and Order locations which range from 1,100 square feet to 8,600 square feet. While these locations only offer delivery, customers can also meet with associates for design assistance.

The success of these smaller format stores is reliant on Ikea’s ability to be more effective at inventory management and outbound logistics as well as the functionality of its e-commerce platform.

Ikea is also leveraging technology to improve logistics and inventory management, using drones and automation to use its existing store footprint in new ways.

Ikea banks on new store formats to sustain success 

What: John Edgards, the CEO of Fenwick, details his strategy  of moving out of London and to open new stores in regions.

Why it is important: European department store companies are increasingly facing a dilemma: either they become a destination shopping place but remain prisoners of the tourists flows, or they go to regions but then become more dependent on the financial health of local customers, who are subject to rising inflation.

Fenwick's CEO, John Edgar, criticized brands for aggressively raising prices while predicting the UK's emergence from its inflationary crisis.

He emphasized differentiating Fenwick through products and services instead of price, aiming to follow the successful models of Harrods and Selfridges. The company plans to invest in regional stores (only outside of London) and target 20% online sales.

Edgar also criticized the government's decision to axe VAT-free shopping for tourists, arguing it negatively impacts the retail industry.and called for its reconsideration, citing negative impacts on the retail industry.

According to Fenwick, there is room for only one department store outside of London