What: Wilko, an iconic retailer, did not manage to raise profitability in spite of growing sales.

Why it is important: In Europe, nobody is too big to fail.

UK retailer Wilko is set to close all 408 of its stores, marking the end of a business founded in 1930 by JK Wilkinson. Once a thriving business similar to the now-defunct Woolworth’s, Wilko took over many of Woolworth's vacated properties. It grew to over 400 stores and 12,500 employees, expanding its product range over the years. Despite experiencing growth and sales of nearly USD 2 billion in 2018, its profitability began declining due to factors such as rising competition from rivals like B&M and Home Bargains, the pandemic, and consumers' preference for out-of-town shopping locales. Administrator PwC confirmed the store closures after failed rescue talks. A potential rescue deal by the owner of entertainment retailer HMV also fell through. The Range acquired the Wilko brand for a reported USD 6.2 million, without buying any stores, while Poundland agreed to take over 71 Wilko sites, potentially saving 1,800 jobs. PwC had also brokered a USD 16.2 million deal with B&M for 51 Wilko properties, though without job guarantees. This marks the departure of another iconic high street name, leaving many former Wilko employees facing uncertain futures.

UK retailer Wilko closes after 93 years of business

What: Myer CEO talks about rising theft and customer behaviour in Australia.

Why it is important: It is no secret that Australian department stores are struggling. The fact that John King plans to leave in 2024 opens many speculations about the future of the business.

In FY24's early weeks, Myer's sales fell by 1.9%, but CEO John King remained optimistic about the growth since the pandemic, highlighting its focus on omnichannel retailing. The success was attributed to the combined in-store and online customer experience, with Myer One being a significant driver. King emphasized that customers spending across multiple channels tend to spend more. In FY23, Myer reported a 12.5% YoY sales increase to $2.1 billion and an 18% YoY net profit increase to $45.6 million. Amidst concerns of sustaining these figures, especially with potential capital injection into rival David Jones by new owner Anchorage Capital, King pointed to Myer's diverse product pricing strategy. King acknowledged a sales decline in the last quarter of FY23 and early FY24 but expects more clarity post the holiday season. Myer plans to enhance the shopping experience through tech investments and a new national distribution center. Retail theft, accounting for 1.8% of Myer's FY23 sales (~$60 million), remains a challenge. King intends to resign as CEO in 2024, raising questions about the company's future direction, especially with Solomon Lew's increased stakes in Myer and his known intent to overhaul the Myer board. King acknowledged Lew's increased interest as a sign of support for the company.

Australia’s Myer CEO’s interview

What: Fenwick launched its first-ever advertising campaign, “Quiet No More”.

Why it is important: The launch of the ad shows the evolution of the store from being a discreet brand to one that is actively advertising and aiming to reach a younger audience.

The campaign features captivating images captured by the up-and-coming photography duo Pablo Estévez and Javier Belloso, as well as Ana Paganini.

To complement the campaign, Fenwick has organized a pop-up shop within their department store, where customers can purchase exclusive T-shirts. These limited-edition T-shirts carry empowering slogans such as "Quiet No More," "Unquiet Luxury," and "Wear Something With Volume.”

Fenwick had previously sold their Bond Street store and adjacent London properties last year and are now  focusing on investing in and developing their flagship store in Newcastle, signifying a shift in their strategic priorities.

Fenwick launches first-ever ad campaign 

What: The FT explores the reasons why such a giant with so much at stake (12,500 employees) could not be saved.

Why it is important: Beware of whom you partner with. Many critics point out the role of the administrator, PwC, in the final failure.

Wilko, a 93-year-old discount retailer, faced potential collapse with most of its 12,500 staff facing redundancy. Initial optimism about finding a buyer faded. Doug Putman, owner of HMV, withdrew a potential offer citing legacy problems and high costs in running Wilko's systems. Issues with suppliers and reduced stock levels further complicated rescue efforts. M2 Capital's interactions with administrators PwC were contentious. Wilko's administration generated more customer interest, boosting sales temporarily. The Range acquired Wilko's brand and website. Critics question dividend payments made to family owners in recent years.

The reasons of Wilko’s shutdown

What: Westminster Council has approved GBP 90 million for the first stage of a revamp of London's Oxford Street.

Why it is important: The investment into the street will revitalise the shopping area and create a more pleasant experience for visitors as well as boost sales for the businesses.

The plans include reducing traffic and increasing visitor space, with the aim of creating a "world class offer and experience" for shoppers. The stretch from Tottenham Court Road to Marble Arch will receive wider pavements, redesigned crossings, and more greenery to improve the overall environment. The important junctions, such as Oxford Circus, will be redesigned to be more pedestrian-friendly. While it falls short of the traffic-free shopping ideal, it will undoubtedly improve the area. Oxford Street has faced challenges, including the rise of American candy stores and the closure of flagship stores like Topshop and Debenhams. The news will please retail leaders who have advocated for more investment in Oxford Street, especially as neighbouring streets like Bond and Regent have thrived.

Oxford Street gets go-ahead for GBP 90m upgrade

What: The KaDeWe group has launched a new five-part campaign called “ A Story of Desires”.

Why it is important: The campaign launched showcases top models, luxury fashion brands, and aims to inspire customers to embrace their personal luxury moments during the autumn season.

The campaign was released on September 4th in Hamburg’s Alsterhaus and Munich’s Oberpollinger as well as KaDeWe in Berlin on the 6th.

Renowned photographer Hugo Comte created 21 campaign motifs featuring the new fashion collections available at the luxury department stores. The campaign showcases top models Penelope Ternes, Abigayl Anderson, and Céline Vivod styled in exquisite pieces from brands like Alaïa, Mach & Mach, Khaite, Coperni, and Loewe. Additionally, the campaign highlights menswear brands like Acne Studios, Craig Green, Marni, and Tom Ford.

The colours featured are autumn tones to reflected the changing seasons along with whimsical details such as neon elements and floating objects, and faux fur.

The campaign is paired with the the KaDeWe in-house magazine which can be viewed online as is available as a print version in stores.

KaDeWe Group launches “Story of Desires”

What:  A testimony from Zalora CEO on how AI is transforming the business.

Why it is important: The article is down to earth and provides a set of examples on how department stores could address AI in their operations, if this is not yet the case.

Zalora, a leading e-commerce platform in Southeast Asia, has integrated advanced artificial intelligence (AI) capabilities from OpenAI into its proprietary platform, Titan. This move aims to redefine online shopping experiences, streamline business operations, and elevate industry efficiency standards.

Key insights from the integration:

1. Purpose of Titan: Developed by Zalora, Titan integrates OpenAI to address e-commerce challenges and bolster innovation. It automates production, refines search precision, minimizes manual work, and facilitates smarter, AI-driven customer service, according to Sumit Jain, Zalora's CTO.
2. AI in E-commerce: Jain perceives AI as transformative for e-commerce. It can reduce operational expenses, solve intricate business problems, and augment human roles. Examples include using AI for crafting product descriptions, refining search functionality, assisting customers post-purchase, and lowering production costs.
3. Search Enhancements: One practical outcome of Titan has been the "Did you mean?" suggestions for users, optimizing their product search. This has led to a 4-6% conversion rate uplift since the system's inception.
4. Operational Benefits: Titan improves operational efficiency, as demonstrated by a 30-50% increase in forecasting accuracy, enabling Zalora to scale effectively. Additionally, the system aids in enriching product descriptions and optimizing product imagery processes.
5. Automation: Generative AI is used for automatic attribute tagging (like color, style, and occasion) based on product images, leading to auto-generated SKUs and product descriptions. This streamlines search functionality, ensures quality, and reduces manual labor.
6. Business Intelligence: Zalora is leveraging AI for business intelligence chatbots, which mine stored data to provide quick and precise key findings. This expedites insight retrieval, enabling staff to focus on high-impact activities. Furthermore, AI-powered Slack chatbots have been employed for customer service and system troubleshooting.
7. Future Prospects: Beyond these applications, Zalora envisions using chatbots for other internal processes, such as handling expense claims. Jain emphasizes that the integration of OpenAI is just the beginning of their AI-focused evolution. One significant advantage of this technology is its cost-effective in-house innovation, striking a balance between developing internally and collaborating with third parties.

In conclusion, Zalora is harnessing the power of AI, through its Titan platform, to innovate its e-commerce operations, enhance customer experience, and set new industry standards.

AI in Retail: the use case of Zalora

What: Walmart goes frontal with Amazon and offers a subscription service for everyday products.

Why it is important: This emphasizes even more if needed the fact that department stores are pushed out of the everyday product for everybody positioning, and need to define their positioning and target with great precision.

Walmart has introduced a new subscription service allowing customers to receive regular shipments of items like food, paper products, and pet supplies. This move competes with Amazon's Subscribe & Save program, which has been operational since 2007 and offers up to 15% discounts on bulk subscriptions. Unlike Amazon, Walmart offers products at its "Every Day Low Prices." The service was developed in response to observing customers frequently repurchasing the same items. The subscription covers a wide range of products, with pet-related items being particularly popular. In line with this, Walmart has also opened its first Pet Services centre in Dallas, Georgia. Other retailers, like Chewy, also have similar subscription offerings for pet products.

Walmart debuts subscription services

What: Walmart recently hosted its first-ever Walmart Marketplace Seller Summit in Las Vegas where the company announced to extend its Marketplace to Chile.

Why it is important: The expansion provides additional growth opportunities for third-party sellers, allowing them to reach new markets and increase their sales potential.

The event featured prominent Walmart leaders, including CEO Doug McMillon and Chief eCommerce Officer Tom Ward, who emphasized the potential of Walmart Marketplace to connect businesses with new markets and customer segments.

Walmart aims to enhance fulfillment services by scaling local pickup and delivery, expanding options for big and bulky items, and launching digital brand shops and shelves on its website. They also revealed that Walmart Fulfillment Services will waive peak season storage fees for sellers who inbound by October 1.

To further support sellers, Walmart has introduced features such as Inventory Transfer Services and Walmart Restored for improved inventory availability and refurbished goods options.

Walmart aims to grow its third-party marketplace at first seller summit

What: Mukesh Ambani's new Mumbai mall, Jio World Plaza, is attracting luxury brands such as Gucci, Cartier, and Louis Vuitton, who have signed leases to open stores there.

Why it is important: The signing of leases by luxury brands in Mukesh Ambani's new Mumbai mall highlights the growing importance of the Indian market and its potential for luxury retail growth.

The mall is expected to open this year, and Reliance Industries, Ambani's company, will share monthly net revenue with the tenants. The desire for quality retail spaces has driven luxury brands to establish a presence in the mall, as they previously had to open their first outlets in luxury hotels. Now, they seek to have a meaningful presence in India where the market is growing. Rental agreements include clauses to maintain the luxury appeal of the mall. With India having over 800,000 millionaires and the economy projected to strengthen, leading to a rise in millionaires, the luxury spending market in India is expected to expand by nearly 12% annually according to Euromonitor.

LVMH, Gucci to expand in India with new outlets in Reliance’s luxury mall

What: Sephora announces the first-ever European Sephoria event to be held in Paris on October 6-7.

Why it is important: The immersive experience will offer customers a chance to consult with experts in the beauty industry.

The event will take place at 150 rue de Rivoli in central Paris across three floors. Sephora will showcase its makeup, skincare, haircare, and perfumery brands, as well as special offerings for Christmas 2023. Around 40 brands, including Fenty Beauty, Rare Beauty, Drunk Elephant, Manucurist, and GHD, will be featured at the event.

Visitors to Sephoria will have the opportunity to enjoy beauty treatments and attend masterclasses led by cosmetics brand founders and industry experts. Additionally, a café with DJ sets will be available for guests.

On October 6, admission will be limited to Sephora's Gold loyalty club members and the press, replacing their traditional pre-Christmas press presentation. On October 7, the event will be open to the general public from 9 am to 9 pm. Tickets, priced at €35 for Gold Club members and €45 for the general public, will include a free gift pack containing products from Sephora's featured brands. Tickets will go on sale to the general public on September 7 on Sephora’s ad hoc website.

Sephora’s immersive Sephoria event scheduled in Paris on October 6-7

What: Nordstrom has made executive leadership appointments in its merchandising and store organizations.

Why it is important: These appointments aim to strengthen Nordstrom's focus on delivering exceptional customer service and expanding its reach in key markets.

Jamie Nordstrom has been appointed as the Chief Merchandising Officer, bringing his 28 years of experience to the position. He will report to Pete Nordstrom, President, and Chief Brand Officer. Additionally, two other executives, Fanya Chandler and Gemma Lionello, have been appointed as President, Stores, and President, Rack, respectively, to oversee the strategy and execution of the company's stores.

Nordstrom announces executive leadership appointments 

What: OpenAI is expanding ChatGPT's capabilities, introducing voice and image-based interactions.

Why it is important: The new voice technology — capable of crafting realistic synthetic voices from just a few seconds of real speech — opens doors to many creative and accessibility-focused applications, as well as risks for malicious actors.

Users can engage in voice conversations with the chatbot, make voice requests like bedtime stories, and ask questions, receiving responses in spoken form. Additionally, ChatGPT will support image-based queries, where users can upload images and ask for explanations or instructions. The voice feature relies on a text-to-speech model, offering five different voices. Spotify is partnering with OpenAI to allow podcasters to translate their shows into other languages while retaining their original voice. These new features will roll out to paying subscribers, initially on Android and iOS for voice conversations.

OpenAI gives ChatGPT a voice for verbal conversations

What: Kroger has been involved in a legal action claiming it has contributed to the US opioid crisis.

Why it is important: The more involved department stores will be in health and wellness, the more they will ahve to be cautious with the implication of their actions.

Kroger, a major grocery chain, has agreed to a $1.2 billion settlement with states, local governments, and Native American tribes over claims that its retail pharmacies contributed to the opioid crisis by inadequately monitoring opioid prescriptions. The settlement will be paid over 11 years, starting in December, with an additional $177 million for legal fees to be paid over six years. Although Kroger did not admit any wrongdoing, it joins other pharmacy chains like Walgreens, CVS Health, and Walmart, who have made similar settlements totaling about $13 billion. The funds from these settlements are being used to support opioid abuse victims and purchase opioid overdose reversal drugs. Despite the settlement, Kroger intends to proceed with its merger with Albertsons and plans to divest over 400 stores to address antitrust regulator concerns.

Kroger pays USD 1.2bn to settle opioid claims

What: Flannels opens its second store front in Ireland.

Why it is important: The opening of the new store indicates both Flannels and its owner, Frasers Group’s dedication to the growth of physical retail and introducing luxury destinations to untapped markets.

The 15,000 sq ft. store is locates on St Patrick’s Street and spans across three floors. The store offers a curated selection of menswear, womenswear, and junior luxury designer clothing and accessories including Off-White, Stone Island, and Valentino.

The Cork store location is expected to generate around 6 million customers annually as well as create over 40 new jobs in the local area.

Flannels’ second Ireland flagship lands in Cork 

What: Falabella announced its 2023 H1 results.

Why it is important: The financial performance of Falabella can give insight into the retail industry, particularly in the Latin American region.

The company ended the first half of the year with a loss of CLP 5,153 million (16.9% drop). Their H1 turnover was CLP 5,435,960 million which is 9.6% lower than that of the same period last year. The worst performing division was the home stores in Chile with a decrease in turnover by 23%, department stores in Chile down 18%, and those in Colombia down by 30.9%.

Falabella decreased its business in all of its markets, including declines of 4.2% in Peru, 16.6% in Colombia, 21.4% in Argentina, and 16.2% in Brazil. The company currently operates with a network of 526 establishments distributed between Chile, Peru, Colombia, Argentina, Brazil, Uruguay and Mexico.

Falabella reduces its income and enters losses in the first semester

What: Olivier Bron has been made official by the Macy’s Group as the new general manager of Bloomingdale's stores starting in November.

Why it is important: Bron has experience with Galeries Lafayette Group, Central, and Robinson department stores and will now report to Macy's CEO, Tony Spring.

Olivier Bron has been appointed as the new general manager of Bloomingdale's stores by the Macy's Group. He will assume his role in November and will report to Tony Spring, who has been the president and CEO of Macy's since March. Previously, Bron served as the director of operations for the Galeries Lafayette group and later moved to Thailand to manage the Central and Robinson department stores.

Tony Spring praised Bron in a statement, highlighting his charismatic leadership, understanding of Bloomingdale's culture, and deep knowledge of the luxury market. Bron will oversee a network of 34 Bloomingdale's department stores and 20 Outlets in the U.S., with the brand also having a presence in Kuwait and Dubai

Olivier Bron expressed his honor at being named the next CEO of Bloomingdale's and showed admiration for the brand's 150-year history and its premium product assortment. He also expressed eagerness to continue the momentum of the team, including new store formats and ongoing digital expansion.

For the first half of its 2023 fiscal year ending in July, Macy's group saw its revenue decline from $11.4 billion the previous year to $10.5 billion this year, with Macy's sales dropping by 8.9% and Bloomingdale's by 3.3%.

Bloomingdale's entrusted to Olivier Bron

What: Indonesia makes a drastic move to safeguard traditional retail

Why it is important: It is the first country to ban sales on Tiktok. Who will be next?

Indonesia has prohibited e-commerce transactions on social media platforms to safeguard traditional retail, a move primarily affecting TikTok and its shopping feature. The ban aims to defend offline businesses in the region from predatory pricing on social platforms, which threatens small to medium enterprises. The Trade Minister  emphasized the regulation ensures a level playing field in business competition and user data protection. Furthermore, e-commerce platforms in Indonesia must set a minimum price of $100 for certain directly imported items and ensure products comply with local standards.

TikTok is the primary business affected by this ban. TikTok has over six million local sellers and 125 million users in Indonesia. The country recorded e-commerce transactions worth nearly $52 billion last year, with 5% occurring on TikTok, primarily via live-streaming. TikTok is owned by ByteDance, a Chinese tech firm.

Indonesia bans e-commerce on social media

What: Shein has entered the luxury fashion market by allowing third-party sellers on its platform to list high-end products.

Why it is important: The unauthorized luxury listings on Shein have the potential to negatively impact the company's reputation, hinder its efforts to adopt a marketplace model like Amazon and Alibaba, and strain its relationship with well-known luxury brands, making it important to consider the implications.

Listings for luxury goods on Shein include brands like Stuart Weitzman, Coach, Lanvin, and Paul Smith. It is unclear whether these items are authentic or how they ended up for sale on Shein as luxury brands typically choose their retailers carefully and may not have authorized Shein to sell their products. However, legally, the brands have limited recourse as long as the third-party sellers acquired the merchandise legitimately.

While selling luxury goods can help Shein attract wealthier and older customers, it may pose challenges as the company aims to adopt a marketplace model like Amazon and Alibaba. The unauthorized luxury listings on Shein could adversely affect the company's reputation and relationship with well-known brands.

Dumping unsold merchandise with Shein may be one way that brands end up on the platform, but they are unlikely to talk about it due to Shein's association with low prices and criticism on social media. There is a "grey market" of new goods that were never authorized for resale, and tourists often take advantage of regional price differences and fluctuations to purchase these items.

How Shein wound up in the luxury fashion business 

What: Several major retailers, including Walmart, Target, and Best Buy, are launching early holiday sales to coincide with Amazon's fall Prime member sale.

Why it is important: These early holiday sales come as retailers are looking to meet consumer expectations for convenience and savings.

Walmart's "Walmart Deals - Holiday Kickoff" event will run from October 9th to October 12th, featuring online deals on electronics, home, fashion, and toys. Target is bringing back "Target Circle Week" from October 1st to October 7th, offering deep discounts on thousands of items, with up to 40% off for Target Circle members. Best Buy is planning a 48-hour flash sale starting on October 10th, with deals on TVs, laptops, headphones, and smartwatches.

Retailers are starting the holiday sales early

What: Luxury brands have understood that experience encompasses many areas of consumption, including food

Why it is important: we are getting to the point where even the most experiential brands, such as Gentle Monster, go the additional mile and open cafés to increase visit duration and customer retention.

Luxury brands are venturing into the restaurant business in Seoul to enhance their brand image and engage younger consumers. Gucci's restaurant in Itaewon boasts Michelin-starred dishes, and despite its premium prices, reservations sold out in minutes. Louis Vuitton and Swiss watchmaker Breitling have also launched eateries, while Korean eyewear brand Gentle Monster opened a dessert cafe. The shift towards offering gastronomic experiences comes as brands recognize the limitations of purely digital interactions. Offering food and beverages allows customers to immerse in the brand without the hefty price tag of luxury goods, effectively broadening the brand's appeal, especially among millennials and Generation Z. This strategy emphasizes experiential luxury and lifestyle over direct profitability.

Gentle Monster opens cafes in Korea

What: Saks Fifth Avenue is marking the third year of its designer accelerator program called "The New Wave" by celebrating the latest class of participants.

Why it is important: The programme is designed to nurture and support independent brands with high potential then showcase the brands. By showcasing these brands through various channels, Saks is helping to elevate and promote emerging talents in the fashion world.

The eight brands selected for the programme will receive extensive exposure through Saks' digital channels and a dedicated window installation at the New York flagship store. The brands chosen for the program were carefully identified by Saks' leadership team, who recognized their potential for remarkable growth. The company aims to provide these selected independent brands with the tools, resources, and visibility needed to thrive in the competitive fashion industry.

The designers include Armando Cabral, Áwet, Bernard James, Elisamama, Interior, June 79, Renowned and Sorellina. The window installations are on display now until September 20th at the Saks Fifth Avenue New York flagship.

Saks highlights designer accelerator program graduates 

What: Zara’s Pre-owned platform will be available in France starting September 7th.

Why it is important: The platform aims to promote sustainability and a circular economy by extending the lifespan of garments, reducing waste, and lowering the consumption of new materials.

The service will offer French customers access to services like garment repair, online buying and selling of used items (online and in-store), and clothing donations. It is part of Zara’s sustainability strategic plan to reduce emissions by 50% by 2030 and achieve carbon neutrality by 2040.

Zara’s second hand platform arrives in France

What: Stockmann commences a strategic assessment; considers changing the Group’s name to Lindex Group and investigates strategic alternatives for the Department Stores business.

Why it is important: This strategy reflects Stockmann’s focus on enhancing shareholder value and optimising its business strategy, particularly by emphasizing the significant contribution of Lindex to the overall performance of the company.

Lindex, which generated over two-thirds of Stockmann Group's revenues in 2022, will remain unaffected by the possible name change. The Department Stores business will evaluate options such as increased independence, ownership changes, strategic partnerships, or continuation under the current structure. The strategic assessment will not impact the daily operations or iconic brand of Stockmann Department Stores.

Any decision regarding the name change would be subject to approval at Stockmann's general meeting, with the assessment expected to be completed by 2024.

Stockmann considers changing its name and alternatives for the Department Stores business