What: After a 40% drop in sales during 2020 due to the pandemic, 2021 was much better; their revenue rose 28% to GBP653.4 million but is still not the same level of revenue that they had before Covid hit, with GBP852.9 million.

Why it is important: The rise in revenue is a start and reflects the end of lockdowns, greater confidence among shopping going into physical stores and the slow return of international tourists.

During the year the company took several steps that strengthened its balance sheet, receiving investments from its immediate parent company adding up to a net GBP50 million.

And the recovery of UK retail got under way with international tourists returning to the country in relatively large numbers and British shoppers also feeling more confident about going into stores.

On the downside, the cost-of-living crisis is affecting British consumers and the past two months have seen a wider downturn in UK retail. It’s unclear yet whether the more affluent shoppers who makes Selfridges a regular habit are still shopping in large numbers.

Selfridges’ sales bounce back post-pandemic but remain loss-making

What: For the month of September, year-over-year, Spanish shopping centres saw visits increase by 10.2%.

Why it is important: According to the monthly index by Sensormatic Solutions, Spanish shopping centres grew in September following a 2.9% dip in August.

However, comparing this year with 2019, shopping centre visits decreased by 4.5%. The annual accumulated figure for 2022 is down 12.8% compared to 2019.

Spanish shopping centres grew 10.2% in September

What: Previously having used only selected staff as influencers, the move of adding an AR-powered virtual influencer has left customers divided.

Why it is important: As part of a strategy to reach younger and ‘tech-obsessed’ consumers, the retailer has launched one virtual influencer to join M&S Insiders (covering menswear, kidswear, home, fashion and beauty), which includes store assistants, stylists, buyers and designers.

The retailer says they beat external influencers with an average 30% higher engagement rate. Mira, the virtual personality for the brand, will create M&S content for fashion and home. She has received a mixed review on Instagram despite around a quarter of British consumers reporting the positive impact of social media on their likelihood of purchasing products.

Marks & Spencer launch virtual influencer

What: To celebrate the power of food bringing people together, the meal-themed window displays also respond to the new owners’ vision of building a world-class food hall.

Why it is important: The holiday season decorations have been rolled out across its four stores in London, Birmingham and Manchester as well as online.

15 windows at the Oxford Street flagship are decorated with festive food displays such as a club sandwich tower in front of a fridge filled with silver designer bags and Brussels sprouts stacked on top of a car like a freshly cut Christmas tree. Santa will be making an appearance daily to interact with customers and host events starting 25 November.

There are plans to have a food market and restaurants. While Selfridges has a host of restaurants, they’re spread throughout the store, thus, the new joint owners plan to create a food hall offering luxury and organic options.

Selfridges unveils food-themed Christmas windows

What: The Nikeland metaverse hosted by Roblox has gained huge popularity despite rumours that digital worlds of this kind are losing steam.

Why it is important: Launched in November 2021, the Nikeland metaverse is a symbol of the continued interest consumers have in experiencing brand universes within gaming platforms as the space has already welcomed 21.6 million visitors.

Nearly 119,000 Roblox players have saved the space in their favourites folder.

Nike’s metaverse welcomes 21 million visitors

What: Lotte, Shinsegae, Hyundai and other department stores are opening special stores for used items and investing in online second-hand marketplace apps to attract younger customers.

Why it is important: Korean department stores used to deal with up-to-date and pricey merchandise to differentiate from other retailers. Due to young customers' increasing demand for used items, they now must differentiate in new ways.

Hyundai in Sinchon (Seoul), has turned its whole fourth floor into a second-hand marketplace, opening various stores selling used clothes and luxury watches and handbags.

BGZT Lab, an offline store from popular resale marketplace app Bungaejangter, saw 400,000 visitors last month at Hyundai Yeouido.

In January 2022, Shinsegae Group invested USD57.17 million in Bungaejangter. In August, the company collaborated with Bungaejanger to open BGZT Collection, its luxury goods store, in the retailer's online shopping mall SSG.com.

On their side, Lotte in Busan also opened a second-hand pop-up store to sell clothes from both domestic and international brands at discounts of up to 70%.

Korean department stores enter second-hand

What: The group delivers USD5 billion in gross merchandise value in fiscal year 2022, demonstrating strength of integrated luxury retail model.

Why it is important: Neiman Marcus delivered year-over-year meaningful gross margin expansion supported by healthy 80% full price selling. Sales are up 30% versus the previous year and USD495 million in adjusted EBITDA (11% EBITDA margin).

Top customers are highly loyal and drove 40% of total sales in fiscal year 2022. Top 2% of customers drive approximately 40% of total sales. 80% of top customers have at least USD1 million of net worth. Their average spend is over USD25,000 annually.

The company's new loyal customers tend to be younger, spanning from Gen X to Gen Z, as younger customers entered the luxury market during the pandemic. They migrate up the engagement spectrum, reflecting growing incomes and desire for luxury.

Neiman Marcus 2022 results

What: Macy’s has promoted an internal profile to look after a strategic set of categories.

Why it is important: Even though Macy’s advertises on the performance of its fashion business, the title suggests that the beauty department accounts for a disproportionate share of the total business.

Macy’s has announced the promotion of Julie Walsh as SVP and GM of centre core and beauty, from her current role as DMM for fragrances. She will now have to deal with beauty, jewelry, handbags, shoes and accessories and report to Nata Dvir, CMO, whose interview was published earlier this year.

Walsh has conducted her entire career at Macy’s.

Macy’s names a new GM for center core and beauty 

What: Jane & Hall Associates’ latest investment research lays out Europe’s retail trends.

Why it is important: The firm reported that the most notable trend was weaker consumer spending in Europe compared to the US.

As well, there have been and continue to be a significant number of store openings and remodelling in London. Despite strong in-store assortments across apparel, accessories and footwear as well as tourism returning, the firm saw that consumer discretionary categories were hit harder in the US.

Jane & Hill Associates also expressed caution about brands with strong European presence such as Nike, Foot Locker, Abercrombie & Fitch, Levi’s, and VF Corp, among others.

Research shows weaker consumer spending in Europe

What: Saks Fifth Avenue has invested 250 million dollars to renovate the Manhattan flagship’s seventh floor to create an advanced designer men’s destination.

Why it is important: While the 40,000-square-foot floor is not yet complete, 15 new in-store shops are coming to compliment the more inviting aesthetic and demonstrated Saks' belief in partnering with brands to create unique experiences.

Some designer brands like Celine and Bottega Veneta are having their US debut in the space. 23 established and emerging brands will also be added to the mix.

The project is expected to be completed in February of 2023. The 250-million-dollar investment will also include a main floor focused on luxury leather goods and accessories and a multi-coloured escalator leading to an expanded beauty floor.

Saks renovates men’s designer floor at Manhattan flagship

Saks renovates men’s designer floor at Manhattan flagship - Source 2

What: Frasers Group has bought the Australian sneaker and streetwear retailer Sneakerboy

Why it is important: The Acquisition further strengthens and diversifies Fraser’s luxury proposition while supporting the continued offering of Sneakerboy through Frasers’ retail expertise and scale.

The group’s purchase of Sneakerboy is part of a wider strategy to increase Frasers’ presence in Australia and the surrounding regions.

Frasers Group buys out Sneakerboy

What: Selfridges is opening a must-visit destination for its London flagship by creating what has been dubbed the biggest Christmas shop to date for the department store.

Why it is important: Located on the fourth floor of the Oxford Street store, the Christmas shop will be 20% bigger offering lights, ornaments, advent calendars, gift wrap and cards alongside personalization services.

According to the luxury department store, 50% of the decorations will be exclusive to this location and 60% will be part of the Project Earth label as more planet-friendly options.

Website analytics showed that Selfridges website searches for decorations rose 60% while advent calendar searches have risen 60%.

Selfridges biggest Christmas shop to date

What: Germany’s retailers struggle with consumers’ reluctance to spend due to fears about rising inflation.

Why it is important: The Wiesbaden authorities adjusted the statistics to account for price increases in real terms, which showed that revenues had fallen 1.3% from July to August, and a 4.3% drop for August, year-over-year.

Food trade revenues fell to their lowest levels since January 2017. Real declines in sales also appeared in the trade of textiles, shoes, household appliances and building supplies, as well as internet and mail order business.

Gas stations were the outliers in August with a 14% increase due to the tank discount motivating many drivers to fill up.

Retail revenues drop

What: Customers are increasingly preferring in-person returns at a store over mail-in ones.

Why it is important: Mail-in returns are expensive and dent profitability, and should the market be shifting thanks to new customer preferences this could be a way for department stores to reduce the hit on margin. The NRF expects that this could help reduce the return costs by 40%.

Forbes reports that shoppers are increasingly making buying decisions according to return policies, especially when it comes to online buying.

In-person, box-free returns are now the favourite method according to customers, while mail-in returns are ranked in the 4th position. This is due to a fatigue related to the need of printing a label, finding packaging material and going to a shipping station. As a consequence, 54% prefer simply going to the store over 21% favouring in-mail returns.

Returns represented 16,6% of total retail sales in the US in 2021, with online returns at 21%.

Hassle-free returns are more important than ever 

What: A 14-piece exclusive collection designed by Ann-Kathrin Götze which will be available from November 9th online and November 10th in select P&C stores across Germany and Austria.

Why it is important: Department stores continue to target strong communities by collaborating with influencers particular to their location to tap into a devoted audience.

This will be P&C’s third “Talent Collection” this year. The collection of minimalistic staple garments is co-created with influencer and model Ann-Kathrin Götze.

Peek & Cloppenburg launch collection with Ann-Kathrin Götze

What: Expected to start operating in Q4 of 2023, L’Oréal’s second factory in the city sits in a 9.7 million-square-foot park.

Why it is important: Construction started this month for L’Oréal’s first global Intelligent Fulfillment Center in Suzhou, China, only 30 minutes from Shanghai by high-speed train.

The project aims to offer local customers more customized beauty products and services while also integrating digital technologies such as auto-picking systems and robots to boost annual direct-to-consumer parcel capacity. Sustainability has been considered in the construction by meeting LEED Gold certification standards and using eco-friendly materials and design for its ‘green parcels’.

L’Oréal unveils intelligent fulfilment centre in Suzhou, China

What: Westfield has opened its Les Ateliers Gaîté shopping mall this month as part of a revitalisation initiative for the Montparnasse area.

Why it is important: The project represents Westfield’s mission to regenerate cities through the retail developer’s projects that work to improve neighbourhood traffic flow, profit and overall appeal for local customers instead of acting as shopping destinations.

Les Ateliers Gaîté has added a pedestrian crossing, a green square and favoured bike paths while retaining 70% of the original building structure in Montparnasse. The mixed-use space is more than a shopping centre, bringing 310,000 square feet of shopping, 140,000 square feet of office space, 62 social housing units, a city library, a daycare centre and the biggest food court in Europe all anchored to the 950-room Pullman hotel and conference centre.

The goal is to fulfil the Montparnasse neighbourhood’s needs through a bakery, wine shop, hardware store, fitness centre and local artisanal shops. Claire’s is the sole international mall chain store.

Westfield opens Parisian mixed-use mall 

What: The Belgian company is back to profitability after having lost more than €20m in the past two years.

Why it is important: The company is in a similar situation experienced by Magasin du Nord a few  years ago, by being profitable and growing but owned by a parent company deeply in trouble.

Belgian department store chain Inno is back to profitability after ending 2020 with a loss of €10,1m and 2021 in similar numbers. In 2022, the department store company expects to end the exercise with a positive EBITDA of €10m.

This is the result of 21 strategic projects, some of which were detailed in the IADS Exclusive article dedicated to Inno, including its own procurement strategy, dedicated ERP, and the company expects sales to rise to €350m in 5 years, up from €314m this year.

Since most of Inno’s operations are disconnected from its owner, Galeria Kardstadt Kaufhof, the difficulties experienced by the German parent company do not have any impact on Inno.

Inno is back to profitability after 2 years 

What: Inflation has started to be visible in the US and reflects in a new channeling of the instore traffic.

Why it is important: There is a contraction of the market, as every class of customer is starting to worry about its spending power, even though luxury customers are less affected than middle-class. The winter season is going to be a stress test for many retailers inside and outside the US.

In the US, all companies are not affected in the same manner. Placer.ai has analysed the foot traffic and determined that the when it comes to mass retailers, Dillard’s has been the most affected in terms of traffic between June and September, compared with Kohl’s, Macy’s and Belk.

Nordstrom was also the most affected in the luxury market, and Saks Fifth Avenue was the only one which was able to grow its YoY traffic between June and September. Mid-range retailers are favored by customers while luxury stores keep the top end of their clientele, which is not that affected by financial woes. As a consequence, this impacts the foot traffic as only the core customers for each segment remain loyal.

In the US, Saks Fifth Avenue is the only department store growing its foot traffic 

What: The traditional mall business is likely in trouble as is demonstrated by the 50% stake acquisition of Jamestown, a mixed-use developer, by Simon Property Group, a mall real-estate trust.

Why it is important: The acquisition hints at Simon Property Group accepting that they can no longer rely on a portfolio dependent on enclosed malls.

The group has stated that the acquisition will assist in accelerating future densification projects. Ultimately, the group has intentions to diversify and bring its enclosed malls up-to-date in order to remain dominant in the market.

Simon Property Group acquires 50% stake in mixed-use developer

What: The leather goods space remains on the ground floor in a 300-meter-squared space with merchandising inspired by Parisian newsstand codes.

Why it is important: The space has added services with a renovation workshop and customization through embroidery.

The space mixes historic brands with newer, trendier designers in backlit curved shelves with metallic structures.

Le Bon Marché redesigns its leather goods space

What: Macy’s Inc. will move into India through a partnership with local distributor Myntra in which the US department store’s private label brand portfolio will be sold online via Myntra’s multi-brand platform.

Why it is important: 600 options from Macy’s private label brands will be available on Myntra’s online platform.

Around 40% of Indian consumers typically purchase clothing and footwear from foreign or global multinational brands, which is higher among 25-34-year-olds (49%) and 35-44-year-olds (45%). Consumers also have a growing inclination to shop for clothing and footwear online with around one in five Indian consumers purchasing products through e-commerce platforms.

The partnership supports both companies by offering Macy’s an opportunity to attract a wide range of customer segments and Myntra the possibility to consolidate its international brand offering.

Macy’s enters Indian market through Myntra partnership

What: New regulations are coming into force in Europe which will change the way that businesses operate and how startups will be financed and grown.

Why it is important: It is becoming more challenging for businesses operating in the EU to be able to comply with the various regulations that are being enforced. Startups have the opportunity to implement such regulations at the core of their businesses, but veteran companies will need to pivot to ensure compliance.

EU’s Sustainable Finance Disclosure Regulation (SFDR) came into force last year regulating disclosures of investee companies’ energy and water use, supply chains, waste systems and their gender pay gap, among other sustainability indicators. Further disclosure rules will come into effect on January 1, 2023, therefore the following steps should be considered in order to build a successful business model that will be sustainable over the long term.

1)    Make sustainability ingrained in the DNA of the business model

-    Regulations are cracking down on greenwashing claims, therefore companies need to make sure that all communication matches reality and does not mislead consumers.

2)    Track sustainability criteria and KPIs as soon as possible

-    These metrics need to go beyond environmental concerns and include social issues such as gender pay disparities and staff retention and should be captured as soon as possible.

3)    When choosing suppliers, have an ESG scorecard

-    Scope 3 emissions are part of SFDR’s reporting, therefore companies will need to understand their indirect impacts related to all suppliers, even outside of the EU.

4)    Appoint an ESG officer early

-    The C-suite needs to be involved and engaged in sustainability with an ESG advocate sitting at the top of the company.

How the changing ESG regulations in Europe will impact businesses

What: Unibail-Rodamco-Westfield (URW) has unveiled Westfield Rise, its in-house media, brand experience and data partnerships agency.

Why it is important: Rise “will be able to serve the advertising and media industries in a bespoke way to create durable and measurable partnerships and explore new tailor-made opportunities”. The “client-centric approach, powered by data-driven insights and metrics, will serve brands, agencies and media buyers by delivering compelling off- and online media campaigns and marketing activations to our incredibly engaged audience”.

Rise is meant to be “a one-stop-shop for brands and media-buyers to create measurable campaigns across URW’s platform which includes a network of 1,700 digital billboards, 170 brand experience locations, and a range of online advertising capabilities.

Rise offers clients access to a fully GDPR-compliant platform “leveraging qualified audience data on the company’s massive footfall, including 550 million yearly visits in Europe, along with 40 million consumers online”.

Unibail-Rodamco-Westfield launches in-house retail media agency