What: Nike is leaning into wellness with its newest initiative.

Why it is important: In an effort to further expand its reach beyond Sports, Nike announced the launch of the Nike Well Collective.

This initiative seeks to expand on ideas of mind, body and life, and to serve as a guide for “wellness journeys” for all of its consumers.

Nike will be transforming its Nike Live stores to become Nike Well Collective locations.

Using what it has designated as its five holistic fitness pillars (movement, mindfulness, nutrition, rest and connection), the brand also has plans to bring on more than 1,000 new global fitness trainers and will tap a roster of experts, from academics, researchers, scientists, medical professionals and academic authors to expand content across its holistic fitness pillars. Reproductive health will also be included in the initiative.

Nike’s Well Collective to shift focus from sports to holistic health 

What: 200 UK companies have been publicly denounced by the government for failing to pay minimum wage.

Why is this important: We live in world of transparency where every mistake, even unintentional, can provoke great brand damage.

Marks and Spencer, WHSmith, and Argos are among 202 companies in the UK named by the government for failing to pay the minimum wage to 63,000 workers, amounting to GBP 5 million in underpayments.

The offenses, which occurred between 2017 and 2019, led to £7 million in financial penalties. WHSmith was the biggest offender, underpaying over 17,000 staff by more than GBP 1 million.

The government emphasized that paying the legal minimum wage is non-negotiable and that companies must face consequences for non-compliance. Several companies, including Marks and Spencer, WHSmith, and Lloyds Pharmacy, claimed the underpayments were unintentional and have been rectified.

UK Retailers named and shamed for not paying minimum wages 

What: In his quarterly letter to vendors, Saks’ CEO shared that luxury customers are becoming more deliberate and value-focused in their spending.

Why it is important: Due to the current macroeconomic environment in the States, luxury retailers are having to adapt to luxury consumers’ changing behaviors.

Consumers are shifting their discretionary spending more towards work clothes and fashion for dining out and parties and pulling back spending on casual clothes, sneakers, and handbags.

Saks, its e-commerce operation, saw an 8% decrease in gross merchandise value in the first quarter while Saks Fifth Avenue saw GMV fall 15%. For the entire Saks ecosystem, GMV fell 13% in the first quarter but was up 22% on a two-year stack and 31% compared to pre-pandemic levels.

Despite the expectation of consumer spending staying soft throughout the remainder of the year, the CEO is confident that Saks can weather the challenging macroeconomy. The company will continue on a path toward a lot more scale and efficiencies.

Saks CEO to vendors: luxury sales stay soft

What: British online fashion retailer Asos on Thursday reported a 14 percent drop in quarterly revenue but said its new strategy was starting to work as it returned to profitability, sending its battered shares higher.

Why it is important: The group, led by chief executive officer José Antonio Ramos Calamonte, detailed his strategy is to prioritise profit over top-line growth by re-vamping the retailer’s supply chain, cutting costs and increasing innovation last October.

Asos said core earnings, or adjusted earnings before interest and tax (adjusted EBIT), rose more than £20 million ($25.3 million) in the three months to May 31, its fiscal third quarter. It did not disclose the actual adjusted EBIT figure for the quarter.

“We are delivering on our plan to turn the business around: to right-size our stock; to generate cash; to reduce our net debt; and to structurally improve our profitability,” said the CEO.

Asos sales fall 14% last quarter as it prioritises profit 

What: An opinion about Macy’s and Kohl’s recent results announcements.

Why it is important: It is high time that US stops considering itself as the centre of trade innovation, as many department store companies are doing extremely well in the world.

In this article, the author argues against the idea that department stores are making a comeback, instead stating that without significant changes, they will continue to struggle. The author uses Macy's and Kohl's as examples. Both companies recently reported quarterly results that, while exceeding Wall Street expectations, were "objectively terrible."

Macy's and Bloomingdale's comps were down 8.7% and 3.9% respectively, and year over year net income was nearly halved. Kohl's comparable store sales fell 4.3%, and its profit was primarily due to cost cuts. Both companies expect continued negative sales growth for the rest of the year.

The author criticizes Macy's for making bold claims about innovative strategies while delivering little change. Its initiatives such as the "Backstage," the "Market by Macy’s," the introduction of Toys R Us shops, the acquisition of Story, and an updated rewards program have not led to significant improvements. Despite competitors closing hundreds of locations, Macy's first quarter sales only went from $4.98 billion in 2019 to $5.5 billion recently.

Kohl's, despite initiatives like the roll-out of Sephora shops, a new small store format, in-store Amazon returns, and various merchandising initiatives, has seen its sales decrease from $4.1 billion in the first quarter of 2019 to $3.4 billion recently.

The author concludes by suggesting that these retailers are not doing enough to adapt to the changing market. They are failing to win, retain, and grow a sufficient customer base, and their market share continues to decline. In contrast, retailers like Ulta Beauty, which now has a market value more than three times Macy’s and Kohl’s combined, continue to outperform them. The author argues that unless these retailers make more significant changes, they will continue to struggle.

Macy’s and Kohl’s keep running to stand still 

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

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

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

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

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

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

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

How wellbeing is remodeling the malls of the future

How wellbeing is remodeling the malls of the future

What:  Aldi prepares itself for a new law on waste in Luxembourg, effective January 2024

Why it is important:  This is an example of a sustainable practice that could at the same time contribute to the top line, by increasing sale thanks to marketing, and the bottom one, by saving a few productivity points too.

Aldi Luxembourg is set to distribute its promotional leaflets via WhatsApp as part of a digitization process and in response to a new waste law in Luxembourg.

This law, effective from 1 January 2024, requires consumers to expressly state if they wish to receive physical mailings. Aldi has been promoting its digital leaflet via QR codes on various products, and now customers can also request the leaflet through WhatsApp, receiving a weekly message with a link to the new leaflet.

This move is reportedly a first for Luxembourg.

Aldi distributes leaflets via WhatsApp in Luxembourg 

What: Falabella has reported a negative performance for the first quarter of 2023.

Why it is important: The retailer is focusing on its efficiency plans and the digitization of its processes in aim to see significant improvements for the remainder of the year.

Falabella reported revenues of USD 3,476 million for the first quarter, a 6% decrease compared to the same period last year. The company’s sales also fell 9% and online sales were down 11%.

Despite the decline in online sales, the sales of its vendors increased by 23% to USD 173 million.

Gross profit contracted by 17%, which the company attributed to a 36% decrease in its department store division and a 24% decrease in its home improvement format.

Losses for the retailer reached USD 76 million, plummeting its triple-digit net income by 186%. Additionally, Ebitda fell 57%.

Falabella’s CEO stated that the company plans to continue to work on the transformation of its business, as it is advancing its efficiency plans and the digitization of its processes.

Falabella posts USD 76 million loss, plummeting 186%

What:  Shein is going around Indian regulation by making a deal with Reliance, which in turns earns the capability to both supply Shein worldwide and sell the products in India

Why it is important:  In spite of some protests against Shein, it seems that its growth cycle is not over yet.

Reliance Industries, India's largest company, is partnering with Chinese retailer Shein in an attempt to dominate India's $10 billion online domestic fashion market. This partnership comes three years after Shein was banned in India as part of a broader crackdown on Chinese companies following border clashes between the two countries.

Under the recently approved license agreement, Shein will receive a percentage of profits from its fast fashion sales in India, while Reliance will assist Shein in establishing a supply chain within India's garment industry for global exports12. The partnership could also enable Shein to shift about 25% of its sourcing to India, a significant move given that Shein currently sources 93% of its products from China.

The Shein partnership will allow Reliance to cater to younger consumers at lower price points, which is important given that many online shoppers in India are young adults from smaller cities. On the other hand, Shein is expected to benefit from access to India's online market, which is the world's third largest e-commerce market and worth an estimated $50 billion in 20221. This move comes as Shein's expansion in Europe and the US begins to slow, and the company expects its gross merchandise value to almost triple by 2025 to $80.6 billion.

In the fashion ecommerce space, Reliance lags behind Myntra, a company that merged with Walmart-backed Flipkart in 2014 and accounts for around half of the online fashion market in India. Reliance's ecommerce fashion business Ajio holds about 4% of the market share.

Reliance seeks retail dominance in India with deal for Shein 

What:  Discounter chain is heavily penalized for increasing theft in store

Why it is important:  Theft starts to be a theme in US press, which suggests that the phenomenon is growing, all the more that investors notice and penalize retailers hit by this wave.

Dollar Tree reported a 44% decline in net income despite strong sales growth, largely due to a shift towards lower-margin essentials and a significant increase in losses from theft, termed as "shrink" in the retail industry. This theft has contributed to the shrinking of gross margins by 3.4 percentage points to 30.5%, leading Dollar Tree to cut its profit forecast for the year.

The company is in the midst of a turnaround, showing positive signs such as increased store traffic, but it needs to address this issue of theft and convince investors about its profit improvement strategy.

Theft and Thrift squeeze Dollar Tree 

What: Frasers Group's CEO Michael Murray explains the success of the Flannels chain, targeting "new luxury, aspirational" customers, via the fast-growing 60 Flannels UK stores.

Why it is important: The article highlights how Flannels, a high-end retail chain, has succeeded in the midst of a cost-of-living crisis by targeting young, aspirational customers. This insight is valuable for retailers looking to adapt to changing consumer behaviors and preferences.

Fraser Group's CEO Michael Murray has attributed the success of the company's Flannels chain to its ability to target young, aspirational customers who are willing to spend money on luxury goods despite a cost-of-living crisis.

Flannels' success has contributed significantly to the Group's "premium lifestyle" brands, which saw revenues of just over GBP 530 million in the six months to the end of last October, up nearly 25% on the year.

Murray has targeted 18-30-year-olds, who aspire to expensive products after exposure on social media, as the Flannels' key demographic. Many of these young people are still living at home and have been sheltered from rising interest rates, rents, or high energy bills.

Murray has stated that he is reinventing the company, targeting "new luxury, aspirational" customers with the fast-growing 60 Flannels UK stores. He is looking to transform the business from a discount sports retailer to Europe's biggest, most aspirational retailer.

Frasers' CEO on the chain’s ongoing success

What: In the US, retailers replaced technology firms in cutting the most number of jobs in April.

Why it is important: The retail sector has cut 36,000 jobs this year and companies are preparing for consumers to tighten their spending as interest rates increase in an uncertain economy.

With higher interest rates to control inflation and a potential recession, retailers in America are preparing for consumers to start spending less and taking measures to protect themselves from the fallout.

US retailers cut most number of jobs in April 

What: John Lewis has partnered with an online safety organization to train its staff in 34 stores to become experts in family technology.

Why it is important: The retailer has become the first department store in the UK to offer specialist advice to families on internet safety.

The retailer recently conducted a survey of 1,000 parents which showed that over two-thirds were concerned about internet safety when their child uses an electronic device. As a result, the department store is equipping its partners with specialist knowledge, tools, and skills to support parents and caregivers in internet safety.

The John Lewis staff will support parents and caregivers with the safe and secure set up and use of electronic devices. This will include in-person advice on new and previous purchases, developing healthy gaming habits, balancing screen time, creating a positive digital footprint, and using tech to support digital wellbeing.

John Lewis to offer specialist advice to families on internet safety 

What: The retailer is expanding its off-price division with 10 new stores scheduled to be open within the next two months.

Why it is important: The move comes as the off-price segment is performing well as consumers become more conscious of their spending due to inflation and economic uncertainty.

With the expansion, Backstage will now have 319 locations, with 310 of them being located inside Macy’s department stores and nine being freestanding locations.

In its Q4 earnings report, Macy’s reported that Backstage store-within-a-store locations outperformed full lines stores by 2 percentage points. Additionally, 18% of customers at the store-in-store locations cross-shopped and Backstage customers drove 32% of the building sales.

Customers who shopped both Backstage and full line shop 6.6 times a year in comparison to 3.2 times a year for all shoppers.

Based on data from selected off-price chains, the overall off-price category was up 5.7% during the first quarter of this year.

In January, foot traffic to these chains had also increased by double digits according to analytics from Placer.ai, who also reported that Macy’s with Backstage locations are outperforming stores without the off-price offering.

The off-price offering gives the retailer the opportunity to create a unique space where customers can shop the fullness of its brand, from treasure hunting for bargains to a full-scale department store with luxury brands.

Macy’s adds 10 Backstage locations as off-price sector takes off

What: Frasers Group will be bringing Guilio, Choice, and Base Childrenswear under its Flannels umbrella.

Why it is important: The group has been on an acquisition spree, with JD brands being the latest in its string of deals.

The group acquired the three chains along with 12 others from JD Sports for GBP 47.5 million in December of 2022.

Choice and Guilio will be brought under the Flannels brand, while Base Childrenswear will be rebranded as Flannels Junior in the coming months.

Closing down sales have begun and Frasers will close the stores permanently in areas with existing Flannels outlets.

Frasers brings former JD-owned brands under Flannels umbrella

What: Brick-and-mortar stores remain important in the post-pandemic era as they offer many benefits that e-commerce pure players can’t match.

Why it is important: Despite the growth of e-commerce, physical retail has been proven to drive sales and customer growth.

Brick-and-mortar stores remain a vital backbone to the retail industry as they help drive customer acquisition and complement online brands.

The International Council of Shopping Centers found that if a store opened in a market, their online sales in that market would increase by 37% and if a store closed in a market, their online sales decreased by 33%. These figures prove that a physical retail space can act as a billboard for retailers because if a brand is out of sight, it’s out of mind for customers.

Having a physical presence also helps with customer acquisition costs as customers are coming in-store but also visiting the store’s website. E-commerce companies with pop-up locations have seen online growth, including one brand which saw growth of around 40% in their market.

Building the case for brick-and-mortar stores

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

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

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

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

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

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

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

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

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

The turnover of Inno climbs by EUR 50 million

What: Nordstrom is betting on its off-price stores with plans to open 20 new stores this year as consumers become more value-conscious.

Why it is important: The brand has remained a weak spot in the company’s portfolio, and its success or failure could shape the company’s future.

In FY 2022, Nordstrom Rack reported sales below pre-pandemic levels and in the holiday quarter, its sales dropped 8%. Despite these numbers, Nordstrom is looking to turn the brand into a growth driver as discretionary merchandise is under pressure as a result of inflation.

Nordstrom Rack has formed a dedicated leadership team and also focused on its best-selling brands as part of its strategy. The off-price retailer’s competitors, such as T.J. Maxx, Ross Stores, and Burlington stores, have seen success in opening more stores and driving higher foot traffic, while also seeing higher sales in comparison to the Rack.

The retailer plans to open nearly 30 new locations within the next two years as it hopes to turn the chain around during a “golden moment” for off-price as many retailers and brand have excess inventory.

As shoppers look for savings, Nordstrom hopes Rack stores can fuel its revival

What: Lidl is advocating for change in kids consumer habits and hopes the industry will follow suit.

Why it is important:  low cost retailers are usually not the ones calling for industry-wide change, and department stores should take note.

Supermarket chain Lidl is urging other retailers to make fruit and vegetable packaging more appealing to children, following the success of its own Oaklands Funsize range.

Sales of this range, which features fun names and cartoon characters, increased by over a third after its launch in 2017. To promote healthier eating among children, Lidl also plans to remove cartoon characters from unhealthy products by next spring. This decision, affecting at least 30 products across 14 categories, follows a similar move in 2020 when Lidl removed cartoon characters from cereal packaging.

Peter de Roos, Chief Commercial Officer at Lidl GB, highlighted the positive impact of these small changes and expressed hope that other supermarkets would follow suit.

Lidl is calling other supermarkets to make fruit and veg packaging appealing to children 

What: Manor interviewed the director of the Swiss Retail Federation to discuss the current state of retail.

Why it is important: According to the director, department stores have the opportunity capitalize on the changes happening within the industry.

The start to 2023 has been bumpy, as retailers announce store closures, layoffs, and a decrease in profit. Digitization and the pandemic have changed the retail landscape, however many retailers are adapting and thriving.

While some have reported that department stores have missed the change, Dagmar disagrees with this statement. The director stated that department stores have the advantage of having everything in one place, giving them the best conditions for innovative store concepts.

With constant change, competitive pressure increasing, and customer needs being more demanding, retailers can no longer rely on traditional concepts. Dagmar suggests that to survive in the market, retailers should have excellent curation and brand selection, an atmospheric experience, and integrate digital media and elements in stores.

Retail trade – where opportunities and risks are close together

What: Burlington High School in the US (Vermont) was condemned and is currently being demolished.

Why it is important: After 10 weeks of adaptation works, a former Macy’s department store found a new purpose to become a new temporary school which will run until 2026. Brand names such as Levi’s and Michael Kors are still visible.

A school in a former department store

What: The US’ largest manager and developer of shopping centers recorded positive first-quarter results.

Why it is important: The results have led to the group raising its quarterly dividend and increasing the midpoint of our its full-year 2023 guidance.

Net income attributable to common stockholders was USD 451.8 million compared to USD 426.6 million in 2022 and funds from operations were USD 1.03 billion compared to USD 1.02 billion last year.

The group is seeing strong demand from the retail sector across many categories in terms of leasing despite economic uncertainty.

Simon’s Other Platform Investments (OPI) group, JCPenney, and SPARC joint venture all remain profitable, with an expectation to remain profitable in the next two quarters, but seeing a majority of the profit in Q4.

JCPenney is also making a comeback according to the group as they bring better brands into the store, fix up stores, and improve beauty floors.

Domestic property net operating income increased 4% and portfolio net operating income increased 3.9% compared to the same period last year.

Occupancy at Simon’s US malls and premium outlet centers increased 1.1 percent to 94.4%. Base minimum rent per square foot was USD 54.84 compared to USD 54.14 in Q1 of the previous year.

Reported retailer sales per square foot also saw a 3.3% increase to USD 759 per square foot.

Simon Property Group posts healthy first quarter

What: Richard Price, MD of Clothing and Home at M&S is joing Fabacus as a member of its advisory board.

Why it is important: As one of UK retail’s highest-profile executives, Price is joining the board at a pivotal time for licensing and retail as reporting regulations come into effect.

Fabacus is a data management and bureau service for the licensing industry founded by entrepreneur Andrew Xeni.

With mandated reporting regulations coming into effect, there is a need for more visibility and transparency across the sector.

With over three decades of experience working for the UK’s biggest retailers, Price’s appointment to the board brings invaluable retail experience to the company.

M&S clothing chief Price to join Fabacus board