What: Frasers Group has officially acquired the primary retailing location in Dundee, Scotland.

Why it is important: The group has now acquired over 1.3 million square feet of retail space with The Mall in Luton and Overgate in Dundee, strengthening their commitment to future of physical retail.

The shopping centre measures 400,000-square-feet and is expected to offer multiple opportunities for Frasers to implement its elevated group concepts.

Frasers Group acquires Overgate Shopping Centre in Dundee

What: Inside Retail covers the state of the market in Australian loyalty scheme

Why it is important: Department store Myer is said to perform 73.5% of its transactions via its loyalty program, co-built with partners from other businesses, such as Virgin Australia or American Express, both online and instore.

Australian airline Qantas has revamped its loyalty program with the introduction of Qantas Marketplace, a platform where its frequent flyers can purchase products from a selection of 900 brands. They are said to already have 14.7m loyalty members, while their initial target was to reach 12.9m by 2024. The program allowed to bring AUD$905m in underlying earnings between 2022 and 2022 financial years.

The benchmark in the Australian market when it comes to loyalty is the Myer program, dubbed the “Myer One” loyalty scheme. It boasts 4.1m members and 73.5% of the company’s transactions were made through the program.

The article also reviews the programs at Super Retail Group, Chemist Warehouse, and also covers the marketplace launched by the City of Adelaide earlier in 2022.

A panorama of loyalty programs in Australia

What: The Chilean retailer will launch its clothing repair service in 12 more stores this year throughout the country.

Why it is important: The service gives customers an opportunity to transform and reuse their clothing, in line with

Falabella’s +Verde strategy to promote a circular economy.

The workshop is already available in 13 Falabella locations, giving customers the opportunity to give their clothing a second life through personalization and repairs.

Taller F registered more than 55,000 renovation, repair, and transformation services last year with prints, patches, and stud applications being the preferred customization options.

Falabella’s “Taller F” will be extended to a dozen stores in Chile in 2023

What: The new owners of Selfridges have added over GBP 1.7 billion of debt to the firm’s balance sheet.

Why it is important: The higher risk strategy the new owners are taking could boost investment returns significantly.

A loan of GBP 1.7 billion was provided to the new owners against the freehold of the historic Selfridges London flagship.

The Thai and Austrian owners paid GBP 4 billion for the group and the loan was reportedly used to release capital for the acquisition, but wasn’t equivalent to the payment of a dividend to the new owners.

While using debt to buy a business is a common strategy, the Selfridges owners have rejected this notion as their amount of debt is much lower and the luxury focus of their business insulates them from the current problems occurring in the UK retail industry.

New Selfridges owners take on extra debt

What: Macy’s chairman and CEO will retire in February, making the current CEO of Bloomingdale’s, Tony Spring, Macy’s Inc. president and CEO-elect, with a search for the next Bloomingdale’s CEO underway.

Why it is important: Gennette’s retirement has triggered a string of top-level management changes and comes as a surprise as he is younger than the typical retirement age.

Despite Macy’s recent financial results, the CEO is credited for changing the industry’s perception of the retailer for the better and successfully navigating Macy’s through many challenges.

Tony Spring has become Macy’s Inc. president, a role that has been vacant since December 2019. This will make him responsible for the corporation’s digital, customer, merchandising and brand teams, while also overseeing the Bloomingdale’s and Bluemercury divisions and becoming CEO of the group upon Genette’s retirement next February.

Macy’s chief financial officer, Adrian Mitchell, will also be taking on an additional role as chief operating officer, leading store operations, technology, and supply chain teams while continuing his responsibilities with finance and real estate.

Macy’s Jeff Gennette sets retirement date; Tony Spring moving up

What: Saks Fifth Avenue stylists are becoming brand ambassadors for Inspirato, a subscription travel service that crafts exclusive holiday packages.

Why it is important: The luxury retailer continues to deliver an assortment of experiences that are tailored to its customers’ unique lifestyles, helping them establish lasting relationships.

Saks knows that its customers are excited about travel. As the retailer’s Luxury Pulse report found,  luxury consumers are traveling and steering their spending towards clothes and accessories related to their planned vacations.

Stylists will receive training on Inspirato’s offerings and will be supported by their sales team to offer the service to their clients starting in May.

Saks will receive a fee from Inspirato based on the number of subscriptions purchased by Saks customers, with sales associates receiving a cut of that fee based on their referrals.

Additionally, Inspirato members will be encouraged to apply for the SaksFirst Card to receive Saks rewards, giving them status level based on their annual Inspirato spend upon approval.

Saks Fifth Avenue encourages the travel lifestyle 

What: According to Antad in Mexico, sales registered a growth of 6.5% in February compared to February 2022.

Why it is important: The report confirms that sales in February reached 227.8 billion pesos, exceeding the 204 billion pesos registered in February 2022.

“Equal stores” with more than a year of operation registered a growth of 6.5% while “total stores” that launched within the last 12 months recorded an increase of 9.4% in comparison to February 2022.

Antad encompasses commercial chains with 47,000 stores across Mexico, including IADS member, El Palacio de Hierro.

The Mexican National Association of Self-Service and Department Stores (Antad) sales continue to rise and exceed growth of 6%

What: Nordstrom reported net earnings of USD 119 million for the fourth quarter and will be discontinuing its Canadian business operations.

Why it is important: Sales and earnings were in line with the retailer’s updated fiscal 2022 outlook and the department store will be entering 2023 with a healthier inventory position. However, the company is looking to drive profitable growth and enhance shareholder value with the closure of its Canadian operations.

The US-based retailer saw a decrease in net earnings and net sales but managed to stay in line with its updated fiscal 2022 outlook.

For fiscal year 2023, Nordstrom is focusing on enhancing the customer experience, improving Nordstrom Rack performance, increasing inventory productivity, and continuing to advance its supply chain optimization.

Right-sizing their inventory has positioned the retailer for greater agility in current economic uncertainty and closing its Canadian business will allow the department store to simplify operations and focus on driving long-term profitable growth in its core US business.

The wind-down of Nordstrom Canada is expected to result in an approximate USD 400 million decline in total company net sales and a USD 35 million improvement in total company EBIT in fiscal 2023, relative to fiscal 2022.

Nordstrom reports fourth quarter 2022 earnings, announces wind-down of Canadian business

What: Macy’s top executives discussed their key strategies and formats for the department store’s future growth at the Morgan Stanley Retail Roundup.

Why it is important: With Macy’s CEO announcing his retirement, there’s been concern regarding the retailer’s future path to profitability and relevance.

At the Morgan Stanley Retail Roundup, Macy’s CEO and CFO laid out the roadmap for the future of the retailer with strategies for growth being a main focus.

The retailer has seen pressure on all income tiers as they look at their proprietary credit card data. Making sure they have the right inventory for consumers who are going to be more discerning with their purchases is a top focus as economic pressures continue this year.

Macy’s has rebuilt its private brand portfolio which makes up 16% of its business presently. Based on customer research, Macy’s customers are looking for comfort first, followed by versatility and style leading to the refreshing, amplifying, retiring, and adding to its offer.

The retailer also plans to intensify its luxury offer at Bloomingdale’s, in the beauty category at Macy’s, and Bluemercury. In Macy’s and beauty they see a big luxury opportunity, resulting in the decrease of bigger brands on the floor and bringing in niche luxury players to see success.

The operations and localised assortment of off-mall formats will also be a focus for Macy’s Inc. Currently, there are two Bloomie’s with a third location opening soon and eight Market by Macy’s locations, with the metrics being significantly better than its department store locations.

Macy’s emerging marketplace is also an exciting opportunity for the retailer as they can offer more products with less risk through this business model. They have seen a great response from customers so far and expect to see a meaningful impact on growth in future years. Electronics and video games are an example of this as they were gigantic sell-throughs for the retailer.This year, the retailer has a goal of reaching 2,000 brands on the marketplace.

Personalisation will be a major contributor to Macy’s growth as they continue to test new technologies and learn more about traffic patterns through the Retail Next technology that has been installed in stores. So far, they have seen positive results as customers have been more responsive to relevant communication.

Opportunity knocks: where Macy’s is placing its bets

What: Following the announcement of Gennett’s retirement, retail experts are questioning whether Macy’s can be modernized for a better future.

Why it is important: The new CEO faces a big challenge ahead as the department store has recently reported declining financial results and is in a growth desert.

While the department store has become more agile post-pandemic, data-driven, streamlined management, closed 80 weak stores, and improved inventory management under Gennette, Macy’s off-price and specialty stores need to grow as bigger contributors in the business.

Experts have stated that the department store is outdated and needs a new growth engine. While their newer channels like Market by Macy’s are more relevant, some have said that Macy’s fails to execute its strategies well, making the change in leadership an opportunity for new thinking and more enthusiasm.

Macy’s online business was down last quarter in addition to the store business being off and projects a further decline in sales and profits for 2023.

Pondering the future of Macy’s amid leadership changes

What: Amazon announced another round of layoffs, cutting another 9,000 employees in advertising, human resources, Twitch, and Amazon Web Services.

Why it is important: The potential disruption to Amazon Web Services could be a cause for concern to apparel, beauty, and other online retail outlets that rely on Amazon’s cloud division.

Amazon’s cloud division is the top cloud computing platform by market share and fuels a massive load of e-commerce with artificial intelligence and machine learning powers.

The CEO of Amazon stated that Amazon Web Services is still a priority for the company and the move to cut more jobs is one of efficiency as they streamline their costs and headcount.

The announcement brings the company’s total dismissals to more than 27,000 since November.

Amazon's deeper cuts could impact retail outlets

What: Frasers Group has completed the acquisition of Luton’s The Mall Shopping Centre which spans 900,000 sq. feet and houses over 150 retailers.

Why it is important: The move further demonstrates the retail group’s commitment and ongoing investment in physical retail.

The shopping centre was put up for sale by Capital & Regional last year and is a key retail destination in Luton.

The acquisition will provide attractive opportunities for the Group to introduce new elevated store concepts and displays their confidence in the future of the UK high street.

Frasers buys Luton shopping centre for GBP 58 million as it commits to physical retail

What: The president of the Canadian department store, Hudson Bay, is looking to find the sweet spot between leveraging new growth prospects and revamping brick and mortar.

Why it is important: As the industry faces many challenges, Hudson Bay’s CEO believes beauty can bridge the gap between leveraging digital innovation and revamping the in-store experience.

Hudson Bay’s CEO kept the existing leadership in place despite others advice to bring in her own team when she became president in September 2022. She has seen success, as the same team has seen sales growth in the fourth quarter with overall revenues climbing 5% and store sales up 22%.

As department stores have faced many pressures over the past 5 years, the new CEO is looking to transform the retailer by reclaiming the department store’s brick and mortar roots and leaning deeper the beauty opportunity.

Finding the balance between digital innovation and company’s brick and mortar roots, Hwang-Judiesch sees beauty as an important bridge between leveraging new growth prospects and revamping the in-store experience.

When it comes to the beauty space, the physical experience of discovering and playing in the beauty space resonates with customers and is something the retailer can leverage across multi-generational shoppers.

One idea the retailer has been discussing is brand agnostic beauty experts who can help consumers shop a range of products instead of brand-specific sales associates.

Applying lessons from the beauty industry to a department store turnaround

What: Saks has released its latest quarterly survey of the lifestyle and spending habits of luxury consumers.

Why it is important: The luxury market and luxury consumers are going to be more resilient in the uncertain economy as consumers plan to spend the same or more on luxury items.

The Saks Luxury Pulse is a quarterly online survey conducted in-house by Saks. The latest survey had almost 3,000 US-based respondents who are engaged Saks shoppers but could also shop at other luxury retailers.

The survey results capture the mood of luxury shoppers towards purchasing luxury goods. Momentum is starting to slow as 62% of luxury consumers plan to spend the same or more on luxury items in comparison to 68% in September 2022.

Responses also showed that luxury consumers are focused on traveling and plan to spend on clothes and accessories related to their upcoming trips.

Other insights from the survey show that millennials have the most positive attitude toward luxury spending, the most desired shopping services are free basic alterations and in-store returns, and consumers are first spending on travel and events, then clothing.

Saks takes the pulse of luxury consumers

What: The UK retailer has announced a series of new waste reduction initiatives as part of its Primark Cares drive.

Why it is important: As more customers focus on reducing waste, Primark is joining the repair-rather-than-replace movement and strategically partnering with organizations to learn more about consumer behavior and clothing durability.

Primark is working with waste charity WRAP with the goal of creating durability benchmarks and to expand the useful lifespan of garments they produce.

The retailer has also partnered with environmental and behavior change charity Hubbub and the University of Leeds School of Design to look at the durability of clothing across price points and research consumers’ attitudes towards clothing.

The repair workshops have been in a pilot stage across 43 stores and will be rolled out to more branches in addition to tutorials being available on Primark’s social channels.

Primark is expanding its repair-it-don’t-bin-it drive

What: The department store is using supply chain automation and artificial intelligence to catalyze both the customer and employee experience.

Why it is important: The retailer’s automated fulfillment centers are up to five times more efficient than ones without their technology upgrade.

In California, the retailer has a 1-million-square-foot fulfillment center that handles West Coast DTC orders and shuttles merchandise to area stores. The center has been an automation win for the company and has allowed the retailer to get closer to customers through technology such as sortation systems.

The retailer also uses robotic solutions from Attabotics and Tompkins Robotics to efficiently store and sort products in some of its warehouses. The systems cut out-of-stocks with a technology footprint that’s 90% smaller than legacy warehouse automation solutions.

Nordstrom saw a 20% improvement in distribution and fulfillment center productivity and throughput last year, meaning customers are receiving orders faster. The retailer’s supply chain chief also credited their supply chain initiatives for a 200-basis-point improvement in selling, general, and administrative expenses as well as lower per-unit fourth quarter costs.

The retailer has also been using AI to assist customers and employees. AI-based styling algorithms pull together curated looks and associates can also quickly pick up new processes and products through AI. In both initiatives, the company is leveraging and empowering employees to make technology useful for them and create more flexibility in their lives.

Nordstrom supply chain chief talks automation, AI

What: The department store is revamping its flagship store on Piccadilly by revamping its third floor as a Food and Drink Studio.

Why it is important: The retailer is looking to attract a wider range of shoppers through an experiential food hub where customers can eat, drink, and learn.

The Food and Drink Studio will have a multiuse kitchen where customers can attend workshops, take part in conversations, experience tastings, attend live cooking demonstrations and supper clubs.

Fortnum & Mason plans to invite emerging and established chefs and culinary pioneers from around the globe to hose live and virtual events. Additionally, more than 100 Fortnum & Mason chefs will be using the space to test and refine the food that is sold at the store.

A gin distillery will also be on site, where Customers have the opportunity to choose a personalized small batch of “Made in Piccadilly” Gin.

The space will also feature a dedicated area for Fortnum’s signature hampers, with luxury wicker liners, bespoke luggage tags and personalized labels available.

On the lower ground floor, the department store will have a cook shop offering ingredients, utensils, and cookware, as well as a library and bookshop, wine tasting area, a butcher and fishmonger, and gourmet fresh food.

Fortnum & Mason stated that it’s looking forward to a new era with sustainability, innovation, and customer experience at its core.

Fortnum & Mason to open an experiential food and drink hub

What: Amazon Go is permanently closing eight of its Go convenience stores yet will continue to open new stores despite being in a cost-cutting mode recently.

Why it is important: Closing more than a quarter of its Go stores highlights the ongoing challenges the company has faced in building its physical retail footprint.

The retailer’s decision to close several of its convenience stores follows its opening of a new location just weeks ago, in addition to pausing the rollout of its Fresh grocery stores about month ago.

Despite these setbacks in the physical retail segment, Amazon reported a 6% rise in physical store sales during Q4.

Amazon stated that they remain committed to the Go format and will continue to evolve the stores as they learn which locations and features resonate most with customers.

Amazon to close 8 of its Go stores

What: Inflation and the cost of living crisis limited spending in America as mall retailers and department stores reported sluggish growth in 2022 and set cautious forecasts for 2023.

Why it is important: Middle tier and department store retailers are seeing the biggest impacts from unpredictable consumer demand and limited spending in the US.

Kohl’s reported Q4 revenues of USD 5.8 billion, missing analyst estimates by USD 210 million with the retailer’s full year report being down 7.1%.

However, big box and clothing retailers were able to see more success as Target reported fourth quarter revenues of USD 31.4 billion and Abercrombie reported USD 1.2 billion for Q4.

US consumers are lowering their discretionary spending and being more deliberate and mindful with how they spend their money, looking for bargains and value as their wallets feel the pressure of inflation. Beauty, occasion wear, and higher-end luxury are the higher performing categories while luxury customer trends have proved more difficult.

As the US economy remains unpredictable for the coming year, American retailers are taking a  cautious and conservative approach to their forecasts, with first quarter sales expected to remain flat or see low single-digit change.

US retailers prepare for ‘new normal’ in 2023 after rocky year

What: Department stores are using art from international names in order to generate traffic

Why it is important:  While this practice is not new and can be traced back from the beginning of retail, there is a sharp acceleration from both brands (Dior in Venice, Saint Laurent in Miami, for instance) and retailers around to globe to use art as a traffic driver.

Major South Korean department stores like Shinsegae, Lotte, and Hyundai have been incorporating art into their customers' shopping experiences since 2020.

The trend emerged as more people took interest in art during the Covid-19 pandemic for home decoration and investment purposes, particularly among the MZ Generation.

Although some criticize this practice for lacking coherent themes and reducing art to everyday products, proponents argue that it offers greater public access to art and enhances brand image.

Department stores are also collaborating with existing galleries and participating in art fairs, aiming to improve themed exhibitions and work closely with the art community.

Korean department stores showcase high-end art to attract attention 

What: Total Partnership sales fell 2% to GBP 12.25 million and the company will pay no bonus as it continues its cost-savings drive.

Why it is important: While the retailer faced a tough year, John Lewis was able to attract more customers with stronger styling and design in its private label and saw customer numbers rise 0.5% to 11.7 million.

The loss before exceptional items and tax was GBP 78 million, down from GBP 181 million last year. Additionally, the impact of inflation was felt across the business, adding GBP 179 million to its costs.

The John Lewis chain was able to maintain market share with volumes up 1% but its operating profit fell by GBP 82 million to GBP 676 million. Traffic on the store’s app was up 13% with over a quarter of online sales coming from that platform and omnichannel customers up 4%.

The company has an ambitious target to save roughly GBP 600 million by January 2026 as it steps up its transformation focus and will be paying no bonus as a result.

John Lewis losses grow, launches bigger costs-savings drive

What: Neiman Marcus Group’s new awards program is geared toward benefitting designers and customers to bring greater exclusivity and business to Neiman’s.

Why it is important: The new awards program will be distinguished from others through giving brands greater exposure to customers, strengthening loyalty with existing customers, and giving the group a competitive advantage over other department stores with stronger brand partnerships.

NMG awards signal greater exposure for the honored designers and their brands to the US market and are intended to introduce these brands to new customers while also strengthening loyalty among existing customers.

The luxury retailer’s awards is a 360-degree platform for elevating a designer’s distribution across NMG’s three selling channels and furthering its “retail-tainment” strategy.

The awards are distinguished from others as they have a platform that is backed by its merchandise and marketing engines. Additionally, the awards will allow Neiman’s to strengthen its relationships with designers and have a competitive advantage over other companies.

Additionally, the platform gives brands the space and opportunity to create a significant impact on customers as they tell their stories and express themselves through all of Neiman’s channels. This will involve the retailer’s associates selling to clients remotely and in turn strengthen sales.

The group is able to tap into the power of their sales associates and the relationships they have with clients through the platform as they sell remotely to clients. NMG reports that clients who have relationships with sales associates are spending 12 times more than other customers and customers who shop across channels spend five times more than customers that only shop in one channel.

The strategy behind the NMG awards

What: Kohl’s has named board member and interim CEO, Tom Kingsbury, as its new Chief Executive Officer

Why it is important: This is a pivotal time for Kohl’s as the business has been underperforming for several seasons.

Kingsbury joins Kohl’s with an extensive background in discounting and department store retailing. He is responsible for elevating Burlington, rising the stock price from USD 25 to more than USD 200 during his time with the company.

However, the new leader has a tough turnaround ahead of him as the retailer has seen a declining performance by the business and its stock prices.

Kohl’s also announced it entered into a cooperation agreement with Macellum Advisors, who was responsible for pushing the previous CEO, Michelle Gass, out of her position.

Kohl’s names Tom Kingsbury chief executive officer

What: According to a report from Coresight Research, retailers opened 5,103 stores last year and closed 2,603 locations.

Why it is important: For the first time since 2016, major US retailers opened more stores than they closed in 2022.

The number of store closures declined by more than 50% in 2022 compared to 2021.

Discount stores led openings with 1,858 stores, while retailers in the apparel sector closed 750 locations. The trend is expected to continue in 2023, given the threat of recession and increasing inflation.

With the current economic environment, experts expect a slight increase in store closures in 2023, but the numbers are unlikely to reach what was seen in 2019 and 2020, even if economic conditions worsen.

If the projections come to fruition, the US will gain 82.6 million square feet of retail space but lose 41.7 million square feet through store closures.

Store openings outspace closures in 2022