What: A high-profile industry insider has accused the retailer of losing sight of what’s important after the Partnership’s chairman suggested bringing in an outside investor.

Why it is important: The letter emphasizes the impact that John Lewis Partnership has in UK retail.

Mary Portas, a retail consultant, wrote an open letter to John Lewis Partnership via LinkedIn, stating that John Lewis and Waitrose are apart of the fabric of everyday British life, urging the partnership that they’re fighting to save part of the UK’s cultural identity, not just turning around a mediocre retailer.

The letter comes after JLP stated job cuts would be coming and chairman Sharon White shared the idea of ending the partnership’s 100% staff-owned status by bringing in an outside investor in order to raise up to GBP 2 billion.

Portas stated that failure isn’t an option for John Lewis Parntership, and that the fight to save the retailer isn’t purely financial.

Mary Portas weighs in as John Lewis controversy continues

What: The luxury department store has launched a made-to-measure service created in collaboration with eight brands.

Why it is important: The retailer has increased its fashion tailoring offer by 75% for spring 2023 in response to the increased demand for tailored clothing.

The participating brands are set to become residents in “tailoring workrooms” introduced to the store.

The service allows customers to make appointments online before attending one of the personal shopping suites in the department store’s London, Manchester, and Birmingham stores.

Selfridges hopes to encourage customers to purchase made-to-measure when purchasing luxury items as mindsets are changing around product lifespan in the industry. The luxury department store brings a unique brand mix that appeals to a broad range of customers and considers how people are dressing with this new offer.

Selfridges introduces made-to-measure offer

What: The option of environmentally friendly deliveries is appreciated by international online buyers but is constrained by the issue of costs, especially with inflation.

Why it is important: The use of more environmentally friendly deliveries is increasingly considered by online consumers, particularly French, Italian, Spanish, and German internet users according to a survey.

Up five points year-on-year, 79% of international buyers reported that they appreciate green delivery options.

34% of respondents stated that they are ready to make use of out-of-home deliveries that limit traffic, using automatic lockers, relay businesses, or click & collect in stores.

However due to costs and inflation, green delivery remains at the bottom of the list regarding the most important delivery criteria, with the cost of delivery being the top priority for 32% of respondents, followed by speed at 22%.

E-commerce: the desire for more responsible delivery hampered by high prices

What: A new report has shown that London’s West End is recovering slowly as it nears closer to a turnover of 10 billion pounds by 2025 with year-to-date sales having gone up 56% compared to 2021.

Why it is important: Department stores were among the most successful trading categories of 2022 and sales are expected to amplify as tax-free shopping returns to the UK, attracting more international visitors.

The 2022 turnover for London’s West End was GBP 8 billion, with health and beauty, electrical goods, and department stores being among the most successful trading categories.

The overall volume of international visitors is expected to have fully recovered to pre-COVID-19 levels by mid-2023 to early 2024. With the restoration of tax-free shopping, experts are optimistic as the Treasury is estimated to benefit GBP 350 million a year, with 1.6 million visitors spending an extra 2.1 billion pounds.

London’s West End on track to 10 billion pounds by 2025

What: Central Retail is growing significantly on all channels and all markets.

Why it is important: Vietnam has been the goldmine for the retailer in 2022 and will be the next battleground for global retailers in the coming years given the level of investment planned in the country.

Thai Central Retail Corporation has recorded a $6.7bn revenue in 2022, +21% compared to 2021, with a net profit reaching $219m (+2.6%).

This has been fueled by domestic consumption, both in stores (+16%) and omnichannel (+12%). Thailand represents 23% of the business, while Vietnam represents 24% (and recorded +34% growth). Italy represents 5% of the business and grew +48%.

Central Retail reports record revenue

What: A new feature developed with the warehouse retailer allows to specifically target prospective customers who did not confirm their purchase yet.

Why it is important:  Is that the future of AI in retail? Interestingly, it seems that there is no tech provider on the market, as each and every retailer is developing their own technology with the help of tech companies, in order to tailor-make their solutions.

Sam’s Club leverages AI in its retail media offering in order to provide to advertisers with real-time intelligent advertising targeting. The combination of their first-party data with these intelligent capability allows them, among other to specifically customize advertising for customers who have not yet confirmed their purchase.

The system is based on a technology co-developed with The Trade Desk and Liveramp.

Sam’s Club uses AI to improve its retail media capabilities 

What: Following the abrupt departure of Pippa Wicks, the JLP has chosen a new CEO with great brand experience but little retail background.

Why it is important: John Lewis is expanding into new territories, including housing, and its ability to carry properly this diversification remains to be seen.

John Lewis Partnership, the owner of John Lewis department stores and Waitrose supermarkets, is facing a decline in results and Sharon White, the chairwoman, has appointed a new management team. It includes Nish Kankiwala as the group CEO, with brand experience but little retail pedigree, and five other directors, who will report directly to him.

The company is expected to announce its second full-year loss, with pre-tax losses of over $60m, largely due to poor trading at Waitrose supermarkets (compared with a profit of $219m last year).

Among the upcoming challenges, some new ventures, such as smaller John Lewis outlets and a venture in real estate, launched by Pippa Wicks, the previous CEO, will have to be followed up. This is a big gamble for John Lewis Partnership, which until recently was a department store anchor that every mall wanted, but has now been hit by the cost of living crisis.

Management shuffle at the John Lewis Partnership 

What: The German department store group will be closing 52 of its 129 stores with as many as 5,000 employees losing jobs.

Why it is important: The group is one of the largest and oldest department store chains in Europe and has been struggling for several years despite two insolvency filings and hundreds of millions in government aid.

The company said in a statement that as part of the restructuring that the last bankruptcy filing required, 52 further locations will be closing. The group will close 21 stores in June with the rest closing for good in January next year.

Currently, the group employs around 17,400 people and the closures will result in around 4,300 to 5,000 job losses from the stores to various management divisions.

Galeria Karstadt Kaufhof has struggled since 2020, following the COVID-19 pandemic, the war in Ukraine, rising inflation and energy prices as well as uncertain consumer sentiment.

The department store group will be keeping 77 of its current stores open, with plans to modernize these locations within the next three years. The company also plans to give local store management more of a say to better cater to each location’s customer and will also focus more on fashion, beauty, and homeware.

The planned closures still need to be finalized at a meeting of the company’s creditors set to take place on March 27.

Galeria Karstadt Kaufhof to close nearly half of all stores in next year 

What: Target is focusing on experimenting with new store formats, including smaller, closer to customers ones.

Why it is important: The strategy is fully centred on this store format even though, due to adjustments, some units will be closed this year.

Target experienced a nearly 3% increase in sales to $107.6 billion last year. Despite its success, the company constantly evaluates its store footprint, resulting in the closure of some locations. While the average Target store is 13,000 sqm wide, some 150 out of 2,000 are 5,000 sqm large.

Target will close four small-format stores, but the decision was based on individual performance rather than size. Analysts noted that store closures are not necessarily concerning, as good retailers routinely review their store portfolios: half of the stores Target plans to open this year will be smaller format stores, complementing its overall strategy.

Target's COO, John Mulligan, mentioned plans to invest in about 175 stores this year, including full remodels, shop-in-shop experiences, and retrofitted fulfillment spaces for same-day services. The company is also focusing on developing larger store formats in the future.

Target to close 4 small-format stores this spring 

What: Latvanen shares his view on how he revived Stockmann after taking over just before the pandemic.

Why it is important: It is all about playing at best all the competitive advantages of department stores, especially their location: they are already where people are.

Jari Latvanen, CEO of Stockmann Group, a Finnish department store that dates back to 1862, reveals how he turned the company's fortunes around. After taking over in 2019, he refocused the company on its roots as a premium retailer, offering customers a "wow" factor and improving customer service, leading to being able to post a €527m profit in 2021.

The company's history has been an asset, allowing Stockmann to offer exclusive experiences and become an attraction.

Latvanen advises other heritage retailers to focus on their unique selling points, listen to customers and employees, and have a razor-sharp focus on strategy. He believes that department stores can succeed by embracing digital opportunities and giving people a reason to visit in person.

Stockmann is set to open a new toy shop, children's department, and trainer bar to focus on circular economy while also expanding its offering for men's fashion.

Stockmann’s CEO Jari Latvanen in Monocle 

What: The department store group’s creditors have approved its insolvency plan by a large majority.

Why it is important: The approval paves way for the restructuring of the retail chain and will allow around 12,000 employees to keep their jobs.

Experts have emphasized that is now crucial that the plan be implemented quickly and consistently by leadership.

If the plan had been rejected, the closure of all branches and termination of all employees would have been inevitable. However, the planned closure of 47 branches means around a quarter of of the group’s workforce will be losing their jobs.

The approval of the plan results in creditors receiving only 2 to 3.5% of the money owed to them, forgoing more than 1.3 million euros.

Around 30 Galeria works councils from all over Germany demonstrated in Essen during the meeting, setting up a symbolic coffin with signs that listed the closing branches. There is still uncertainty among employees about the resiliency of future promises, as many experts have stated that they don’t have confidence in the future plans.

Perhaps the last chance for Galeria Karstadt Kaufhof

What: M&S has launched a new partnership with CommerceHub to expand its product selection with a unified marketplace.

Why it is important: The partnership is unlocking new possibilities for the retailer as they aim to hit GBP 1 billion in third party sales.

CommerceHub is one of the world's largest commerce networks and provider of software solutions connecting supply, demand, and delivery for retailers and brand globally.

M&S will be utilizing the network’s Commerce Suite, which will enable the business to quickly expand assortment, boost customer engagement and loyalty, and attract new customers while maintaining profitability with more agile and flexible merchandising and fulfillment.

The partnership will allow Marks & Spencer to offer more products to customers without the need for additional, owned inventory and increases the ability of the retailer to respond quickly to changes in customer demand.

M&S unveils new partnership to help it seamlessly reshape as an omnichannel retailer

What: Boscov is the largest family-owned department store in the US, with $1b sales.

Why it is important: While many companies are busy trying to find new recipes to reinvent their business, some remain quiet, but know how to focus on their local customers.

Department stores have been in decline for three decades, with sales dropping 62% since 1992. Macy's and Kohl's have been hit hard by this trend, whereas Dillard's has bucked the trend with its value rising 1,500% since April 2020. This success is attributed to its family-run company status and traditional retail skills. However, even Dillard's has not been able to reverse the overall decline in department store shopping. In contrast, Boscov's, the largest family-owned and operated department store chain in the US, has been able to grow and prosper through careful and deliberate expansion, with one store opening per year.

The 49-large-stores company, which was founded in 1918, has a strong tradition of supporting local causes and non-profits and prides itself on providing old-fashioned retail, with the right products, price and people in place, in combination with a very careful expansion policy (1 new store opening per year).

When it comes to the ‘secret sauce’, it is all about a combination of select national brands, aiming to be ‘everything for the home and everyone in the family’. Pricing is sharp, and includes a 15% discount to veterans and active service members.

Boscov, the largest US family-owned department store, is growing sales 

What: Q4 sales were down 3.3% while fiscal year 2022 sales were up 0.3%, with inventory levels down 3% in comparison to 2021 and down 18% versus 2019.

Why it is important: The department store was able to remain agile, meet customer demands, and elevate its approach to inventory management despite the volatile macroeconomic climate.

Macy’s has reported a strong balance sheet, with ample liquidity and no-near term material debt maturities which will provide the retailer flexibility to navigate the current macroeconomic uncertainty.

Macy’s department store sales were down 3.3% from 2021, with its top performing categories being beauty, men’s tailored apparel, dresses and shoes, while categories such as active, casual, and soft home saw a decline.

Bloomingdale’s sales were up 0.6 percent with beauty, men’s and women's contemporary and dressy apparel performing well, and handbags and textiles seeing a decrease in performance.

Bluemercury, Macy’s luxury beauty and spa retail chain, saw sales up 7.2% with results being driven by strength in skincare and color, partnerships, and its new initiative which curates the lasts emerging brands.

Looking at 2023 and beyond, the retailer believes that its five growth vectors which include reimagining private brands, off-mall expansion, online marketplace, luxury brand acceleration, and personalized offers and communication will solidify its modern department store positioning.

Macy’s Inc. reports fourth quarter and full-year 2022 results

What: NMG’s comparable sales were up 3% for the November through January versus the 2021 holiday season and 11% compared to 2019.

Why it is important: Sales with loyal customers were up 8%, proving that the retailer has customers that continue to buy, remain engaged, and spend more than last year.

Neiman’s saw continued strength in women’s designer ready-to-wear, shoes, handbags, and men’s during the holiday season.

Bergdorf Goodman’s holiday performance also did well, with continued growth online and capturing more shoppers.

NMG was profitable in the last quarter but is seeing a more promotional environment as its full-price is selling but the depth of markdowns is deeper. The retailer expects this to continue in the spring and is being proactive in taking actions during this moment of volatility.

Neiman’s holiday report: sales gain, margins squeeze

What: M&S is looking into expanding its ‘Brands at M&S’ e-commerce concept as it looks to compete with other British department stores.

Why it is important: The heads of the company believe the new additions could eventually amount to GBP 1 billion in sales.

The British retailer is planning to sell more high street brands along with its own clothes, increasing its number of third-party brands from 60 to 100.

While the main focus of growth is clothing, other categories such as beauty, sportswear, and homeware may also be pushed through the platform.

The plan is being led by ex-Amazon fashion leader, Nishi Mahajan, who joined M&S last month and comes amid a major restructuring at John Lewis, one of the retailer’s top competitors.

Marks & Spencer plans to grow high street brand offer to compete with rivals

What: John Lewis will be testing new concepts in collaboration with neuroscience experts at one of its stores over the next year.

Why it is important: The department store is taking a unique approach to enrich customer mood and experience.

The concept will be launched across almost half of the two story space in Horsham, West Sussex with plans to be rolled out to three other locations in the spring.

John Lewis hired neuroscience experts to look at the store’s design and prescribe fragrance, colors, and sounds to specific areas.

There will also be a new children’s area with an interactive treasure hunt, activity table, and a nursery advice service.

The partnership is expected to report an annual pre-tax loss before one-offs of about GBP 50 million, compared with a profit of GBP 181 million last year.

John Lewis to trial ‘multi-sensory experience’ across UK stores

What: The UK retailer is rebranding its London flagship to Flannels X, a space for cultural creators to exchange and broadcast ideas.

Why it is important: Flannels is looking to immerse its brand into consumers’ lives by engaging more deeply with younger audiences and investing in people-led experiences.

The 18,000-square-foot space will now act as a stage for cultural creators, rather than a space for selling products. Influential creatives will be invited to act as cultural creators and offer an intimate look inside their personal universes.

The flagship will have activations from store takeovers to collaborations with leading creatives in addition to a monthly talk series which will be broadcasted to other regional Flannels stores.

The new flagship aims to differentiate in a crowded market by creating a connection between the store and the consumer. As younger generations will account for 80% of global luxury purchases by 2030, Flannels is looking to offer a more welcoming space for these consumers by putting them at the center of culture.

The retailer is investing for longevity and to future-proof the business, which means measuring success beyond footfall and sales and focusing on reaching target demographics, positive customer sentiment, and media feedback.

Flannels accounted for 22% of Frasers Group’s total revenues at GBP 1.05 billion for the fiscal year ending in April 2022.

A new playground for luxury: Flannels rethinks role of flagship store

What: M&S has invested GBP 57 million in its front-line retail staff, meaning more than 40,000 store workers will see their hourly wages increase starting April 1st.

Why it is important: Following the retailer’s biggest-ever investment in its shop workers, all M&S staff will be paid more than the National Living Wage and in line or more than the Real Living Wage.

With rising costs and current economic climate, Marks & Spencer is looking out for its employees and colleagues through investments in hourly pay rates and industry leading benefits. The UK retailer has raised pay twice during the 2022/23 financial year, with hourly pay rising by more than 20% since the start of 2021.

Marks & Spencer invests 57 million pounds to increase pay for retail store staff

What: Luxury giant is reported to consider new partnerships in Korea, one of the most dynamic markets when it comes to luxury.

Why it is important: While the nature of the partnership is not discussed in the article, it is interesting to see that LVMH sees Korean department stores are relevant structures to talk to, and also raises the question on how they plan to share the market (revenue, data, customers) in the future with wholesalers globally.

LVMH CEO Bernard Arnault met with top executives from South Korean department stores, including Shinsegae, Hyundai, Hanwha Group’s Galleria, and Lotte Group, to discuss potential partnerships.

This comes as LVMH aims to strengthen its presence in South Korea, a significant market for luxury brands. South Koreans had the highest per capita spending on personal luxury goods in 2022.

The French luxury group, which owns brands like Louis Vuitton, Christian Dior, and Tiffany & Co., has previously collaborated with K-pop celebrities as global ambassadors for its brands.

LVMH is eyeing special partnerships with Korean department stores 

What: Several past recipients of the Distinguished Service Award recall the impact of receiving the award from the Dallas-based department store.

Why it is important: The department store has been able to have a significant impact on designers’ success in the US while also building long-lasting relationships with luxury fashion houses through its renowned award.

The Distinguished Service Award was founded 85 years ago and has been awarded to many iconic designers including Yves Saint Laurent, Karl Lagerfeld, Ralph Lauren, among many others. The award has been given to more than 100 luxury fashion leaders and has had a significant impact on designers’ careers, especially European designers with jumpstarting their businesses in the US. This year’s recipient of the award will be Brunello Cucinelli.

For many of the designers, going to Dallas to receive the award was the first time they had ever been to the States. When Gabrielle Chanel landed, it was the first time an international plane had landed at the Dallas airport. Karl Lagerfeld also received the award during his time at Chanel, stating that the award presented to Gabrielle in 1957 did a lot to re-establish her image in the U.S.

For Carolina Herrera, the last recipient of the award in 2016, Neiman Marcus has been a loyal partner since the inception of their brand, and the group has supported the luxury fashion house over the past four decades, especially during the pandemic.

Missoni received the award in 1973 as their first international prize. This award felt the most important to them as it recognized the style they had invented. It was especially important in introducing the brand to the American market and the brand has remained in Neiman Marcus since, one of the longest continuous collaborations the brand has had in its commercial history.

In 1947, Christian Dior received the “Oscar of Fashion” months after opening his house and introducing the iconic New Look. For him, it was much more than a personal accolade as he felt that the awakening of French fashion was being recognized. His trip to the US inspired his future silhouettes and he was also able to discover the impact of his creations on American society.

Giorgio Armani was the recipient of the award in 1979, and stated that it gave him legitimacy in the States as he label had only been in existence for four years. The strong relationship between Neiman’s and Armani started because of the award and introduced the Italian fashion house to the American customer, allowing the brand to see international success.

Memories of the Neiman Marcus Award

What: Alibaba’s empire is being split into new entities.

Why it is important: While this might signal some political will from Chinese government, this might also mark the beginning of a more aggressive international strategy for Tmall, as it will be not restrained anymore and limited to the national operations of the mother group.

Alibaba, one of China's largest private-sector companies, plans to split itself into six different companies that could seek separate IPOs, effectively dismantling the business empire that charismatic entrepreneur Jack Ma built over two decades. Alibaba was once valued at over $800 billion, but it is now worth about a quarter of that. The restructuring comes after Chinese authorities signalled that they were winding down a sweeping regulatory clampdown aimed at reining in the country's powerful tech sector.

Under the restructuring, Alibaba's various businesses will be split into six major areas, including cloud computing (Cloud Intelligence Group), Chinese e-commerce (Taobao Tmall commerce group), global e-commerce (Global Digital Commerce Group), digital mapping and food delivery (Local Services Group), logistics (Cainiao Smart Logistics Group), and media and entertainment (Entertainment Group). Each business group would have its own CEO reporting to a board of directors and be fully responsible for the group's performance. Alibaba Group will become a holding company overseen by Daniel Zhang, the Chairman and Chief Executive.

Those business groups will be allowed to raise external capital and seek initial public offerings when they are ready, Alibaba said. However, its domestic commerce business will remain a wholly owned unit of Alibaba. The power of tech titans like Jack Ma and their influence over society caused unease in Beijing. Companies like Alibaba have a grip on data of more than a billion users and investments across a range of companies in China.

Alibaba to be split into 6 different groups

What: Adobe reports that delayed payments in US groceries grew 40% in January - February.

Why it is important: Cash-strapped customers are not only looking for good deals or bargains but also for ways to manage their liquidities through delayed payment options. Grocery has seen the largest growth in the use of delayed payments, even surpassing furniture purchases.

During the first two months of 2023, the percentage of online grocery transactions using buy now, pay later (BNPL) options increased by 40%, according to Adobe Analytics data.

This rapid growth rate surpasses other retail categories, indicating that consumers are seeking better deals by purchasing larger quantities of goods at once. By comparison, in home furnishing, the use of BNPL rose by 38%, and apparel by 8%.

Additionally, online grocery sales rose 26.7% YoY in February, while curbside pickup for groceries also increased by 8% in January and February compared to the same period in 2022.

Buy now pay later explodes in US grocery 

What: According to analysts and solution providers, retailers have upped their inventory management game while also investing in digitalization, e-commerce, and supply chain logistics.

Why it is important: Brands and retailers are investing in operational efficiency as online sales growth plateaus while pandemic-born services remain popular, further complicating fulfillment.

Retailers and brands are sharpening their e-commerce and operational capabilities while putting a lot of focus on supply chain logistics as anywhere up to half of the margin organizations are making could be leaked because of delivery.

Additionally, with services like BOPIS remaining popular, retailers are laser-focused on operational capabilities to ensure the best service while not overspending in terms of labor.

Supply chain, inventory management are top priorities for retailers