What: John Lewis Partnership has a very different capital structure, and its employees are also its shareholders.

Why it is important: The transformation plan of the company is painful and long, the Chairwoman of the company might pay the price of such issues as the partners of the company are growing discontent.

John Lewis Partnership (JLP), once a paragon of British retailing excellence, is facing challenges as its performance declines and the unique business model comes under scrutiny.

JLP Chair, Dame Sharon White, might face a secret vote of confidence due to growing concerns. Losses have increased to USD 294.6 million, leading to the appointment of the first group CEO, Nish Kankiwala, and the abandonment of staff bonuses. A controversial plan to sell a minority stake in the partnership-owned business has caused protests.

While the confidence vote is not binding, a significant rebellion could increase pressure on White. Despite this, White remains positive about the industry and insists that being purpose-led is still key. JLP is exploring new revenue streams, such as private rental apartments above its Waitrose stores, but critics argue that the company should focus on retail fundamentals.

John Lewis Chair is facing growing discontent 

What: Peek and Cloppenburg Düsseldorf announced the first restructuring measures of the bankrupt fashion chain, with 350 jobs being cut.

Why it is important: The company is restructuring its organization and reducing its costs considerably as it looks to bring its company back into the profit zone.

The German department store will be cutting about 350 of over 1,500 jobs in its central departments in Düsseldorf. Peek & Cloppenburg KG will be the first to be affected, with around 200 of the 800 jobs at its headquarters being cut.

Sales in all 67 sales outlets in Germany and online as well as the approximately 6,000 employees who work in the stores shouldn’t be affected by the situation.

P&C Düsseldorf is cutting jobs

What: UK fast fashion retailer managed to reassure markets in spite of a 11% loss in revenue.

Why it is important: Boohoo.com owns Debenhams, which still retains a footprint in many UK customers’ minds.

Shares in online fast-fashion retailer Boohoo rose by up to 12% after the company reassured investors about its growth prospects, despite reporting an annual loss. The UK group's revenue fell 11% to GBP 1.7bn in the year to February 28 due to the cost of living crisis and a return to physical stores post-pandemic.

Boohoo, which also owns Karen Millen and Debenhams, reported a pre-tax loss of GBP 91m, compared to a profit of GBP 7.8m the previous year. However, CEO John Lyttle said the group would reverse the decline in sales and losses this year.

The company is focusing on cost-cutting measures, including reducing stock levels by over a third, and is planning a significant US expansion with a new distribution centre to cut delivery times.

Boohoo reassures investors after slumping to loss 

What: The Higg Index, which has been scrutinized in the past for claims of greenwashing, has been rebranded as Worldy.

Why it is important: Worldly is an attempt to reintroduce the label to fashion as it expands its range beyond the Higg Index. The consumer-facing transparency program remains on hold after it was flagged for being ‘misleading’ last year.

The Higg Co, the organization behind the Higg Index, which measures the sustainability of fashion brands, has rebranded itself as Worldly. The rebranding comes after the company had to pause its Higg Index due greenwashing claims that were flagged as misleading last year. The new name reflects the company's aim to provide a global platform for sustainability data. Worldly plans to expand its services to include other industries beyond fashion, such as beauty and home goods. The company aims to help businesses measure and improve their sustainability practices by providing data-driven insights and tools.

Higg Co, the data platform behind the paused Higg Index, rebrands as Worldly

What: Shein embraces sustainability by moving into circular fashion.

Why it is important:  This move might be very well at the same time misleading for customers (thinking that their consumption could go greener without having to change their habits) and unfair for competition, which is much more scrutinized than Shein when it comes to sustainability efforts.

Fast-fashion brand Shein has partnered with circular economy company Queen of Raw to source and repurpose deadstock fabric materials, aiming to achieve full circularity by 2050. This move is expected to reduce Shein's reliance on new materials and clear out unused stock from other brands.

However, critics argue that this initiative does little to shift the industry towards true circularity and may perpetuate the cycle of wasteful overproduction. They suggest that the environmental footprint of the garment is not reduced through this process as the deadstock material was still produced in the same way as a newly ordered fabric.

Critics also warn that this could incentivize Shein to produce new garments at a faster rate, further fueling their hyper-fast fashion model. They argue that significant sustainability improvements can only be achieved by fundamentally overhauling operating models, producing more durable garments, and avoiding overproduction.

Why Shein’s new sustainability campaign might perpetuate 

What: Saks has launched a campaign that spotlights the importance of mental well-being in collaboration with a mental health and wellness influencer.

Why it is important: The retailer is highlighting the importance of mental health while also raising funds for its foundation which aims to make mental health a priority in every community.

The campaign will feature custom content across Saks-owned digital platforms throughout May and will also include a curated collection of wellness items that support mental health with 10% of online sales from the items and Saks brand merchandise being donated to the Saks Fifth Avenue Foundation.

Saks Fifth Ave and the Saks Fifth Avenue Foundation have donated more than USD 6 million to US mental health initiatives and reached more 6.6 million individuals with messages that combat the stigma and shame around mental health.

Saks launches multifaceted campaign for mental health awareness month

What: The retailer will be closing its full line store at San Francisco Centre and its Market Street Rack location as crime and safety issues continue to impact the city.

Why it is important: The market has significantly changed due to crime, impacting customer foot traffic to stores and the retailer’s ability to operate successfully.

While the retailer didn’t state how many employees will be impacted, it will continue to operate its 16 other stores in the Bay Area region.

Nordstrom to close 2 San Francisco stores (WWD)

NORDSTROM TO CLOSE 2 SAN FRANCISCO STORES (WSJ)

What: The legal framework in EU related to fast fashion and its environmental impact is starting to get tighter.

Why it is important:  It might be a double-edged sword for department stores, as the new regulation might be helpful to compete with fast-fashion operators, provided they can also cope with the new laws.

The European Commission is proposing stricter regulations to combat overproduction and overconsumption of clothing and shoes, as part of the Green Deal.

The regulations would aim to ban fast fashion, ensuring that products are made of as much recycled fiber as possible, free of hazardous substances, and more durable, reusable, and recyclable.

The EU also wants to stop the destruction of unused or returned textiles, reduce microplastics and microfibers in nature, and regulate "green claims" better.

MEP Delara Burkhardt believes that the EU must legally oblige manufacturers and large fashion companies to operate more sustainably, as leaving the market to self-regulate would leave the doors open for a fast fashion model that exploits people and the planet's resources.

EU wants to ban fast fashion with stricter clothing rules 

What:  Marketplace giants, local department stores and foreign e-tailers are fighting for the top spot in Japan as Japanese luxury consumers are becoming omnichannel shoppers.

Why it is important: Japanese department stores are seeing omnichannel purchasing journeys thrive as more shoppers embrace digital channels.

The pandemic-induced surge in e-commerce that was seen globally was even more pronounced in Japan. The country’s fashion e-commerce grew 27% between 2019 and 2021, rising to 2.4 trillion yen (USD 18 billion).

Although analysts believe the e-commerce market has peaked, experts suggest that companies will be able to get more milage out of the luxury segment. A survey conducted by McKinsey found that 41% of Japanese luxury consumers are researching and purchasing across channels rather than heading straight to department stores and boutiques.

Marketplace giants, Rakuten and Zozo are top competitors as they both have been adding luxury brands to their assortment in recent years, with their offerings focusing on luxury accessories.

The fate of Japanese e-tailers is important to global brands because digital channels have a growing role to play in what remains one of the world’s largest, most mature, and dynamic luxury markets. Bain estimates that sales of luxury goods in Japan are worth around EUR 24 billion this year, which amounts to half of the value of all other Asian countries combined, excluding China.

Japan’s luxury consumers also shop at foreign luxury e-tailers, however the barriers to purchasing from overseas platforms is high as poor translation can turn consumers off and the trust factor plays an important role in their purchase decisions.

In Japanese department stores, the security is trusted by consumers in terms of customer service and after-sales service, giving them a leg up in comparison to Rakuten and Zozo who are stronger in mass and medium-priced markets.

Many department stores were reluctant to embrace online sales before Covid, but most of the top department stores selling luxury goods- including Iestan Mitsukoshi, Daimaru Matsuzakaya, Takashimaya, and Hankyu Hanshin-are now seeing omnichannel purchasing journeys thrive as they increased efforts to digitize during the pandemic.

Isetan is among those with a fully-fledged international e-commerce service as they launched a shopping app to connect shoppers and sales associates in November of 2020.

Global luxury brands and Japanese consumers are still loyal to the department stores that served them for generations, however that loyalty is put to the test when their offering doesn’t align with customers’ expectations.

To benefit from the growth of the luxury market, these legacy stores will need to look beyond their current core demographic of loyal but older shoppers.

Multi-brand boutiques are also seeing success as they worked to grow their online business before the pandemic hit and capitalize on foreign demand for Japanese luxury brands.

Despite the progress seen in Japan’s luxury e-commerce market, there is still room for growth as most e-tailers are still lost when it comes to Gen-Z and social media. Online retailers will need to work harder to encourage more affluent shoppers to buy online and choose them over their rivals.

Who will win Japan’s Luxury e-commerce race? 

What: Ikea is investing in new store formats as customers complained that its locations were too far away.

Why it is important: The retailer is listening to customer feedback and focusing on providing new store formats that are convenient for shoppers.

Ikea is investing USD 2.2 billion in its US omnichannel strategy, supporting the opening of eight new stores, nine Plan and order points, and 900 pickup locations and an additional EUR 3 billion in new and existing stores internationally.

Despite the retailer reporting eight in ten customers starting their shopping experience online, Ikea is focusing on its in-store experience as there will still be a need to touch and feel products in person according to the retailer’s COO.

In addition to introducing smaller city store locations, Ikea is also opening Plan and Order locations which range from 1,100 square feet to 8,600 square feet. While these locations only offer delivery, customers can also meet with associates for design assistance.

The success of these smaller format stores is reliant on Ikea’s ability to be more effective at inventory management and outbound logistics as well as the functionality of its e-commerce platform.

Ikea is also leveraging technology to improve logistics and inventory management, using drones and automation to use its existing store footprint in new ways.

Ikea banks on new store formats to sustain success 

What: The luxury retailer has launched a five-part program which focuses on edit, repair, alter, resell, and give back.

Why it is important: Bergdorf’s new program will help customers extend the life of their luxury items and supports the circular economy.

Bergdorf’s has partnered with the resale platform, Fashionphile, as part of the program where the retailer’s personal shoppers will be able to sell their clients’ luxury pieces in exchange for gift cards.

The program starts with a consultation with a stylist who will review a customer’s closet and suggest what should be taken out, repaired, altered, or resold.

Bergdorf’s and Nemain’s have also partnered with Give Back Box, allowing customers to donate their gently used clothing, shoes, accessories, and jewelry to local participating charities.

Santana Leather Care is also partnering with the retailer, offering its services to prolong the life of shoes and handbags.

The new program is considered as complementary of their Conscious Curation program which promotes exclusive ethical and sustainable items from a variety of fashion and beauty brands.

The Conscious Closet will help Bergdorf’s reach its goal to extend the life of 1 million luxury items though circular services by 2025.

The cost of the program will depend on the relationship Bergdorf’s has with the client; for long-time loyal customers the service could be complimentary while for a newer client the cost would be based on the alteration or change needed.

Bergdorf’s launches a ‘Conscious Closet’

What:  The iconic luxury brand stays true to its “invitation to travel” motto

Why it is important:  Louis Vuitton is accelerating in hospitality, travel and leisure. The mega-brand slowly grows outside of the pure retail boundaries. Department stores should take notice.

Louis Vuitton has opened a lounge on top of its store in the Doha airport. The space includes designer furniture pieces, as well as a 3 star Michelin restaurant. The conditions of use are not specificied.

Louis Vuitton opens an airport lounge 

What: The Chilean company opened four new stores, transformed nine stores into new formats and concepts, and remodeled ten stores in the first quarter of the year.

Why it is important: Cencosud is committed to growth and innovation as it continues to open new stores and improve existing ones to better its shopping experience.

The company is set to open 49 new retail stores as well as remodel 47 retail stores and 16 shopping centres this year as part of its 2023 investment plan. Of the total number of stores opening, 80% will be related to the company’s supermarket division.

Cencosud optimizes its presence in the physical channel with new stores, transformations, and renovations

What: Target aims to simply the return procedure in the US in order to decrease their operational costs.

Why it is important:  While it is not suitable for all markets, some retailers might very well have to follow the success of this new service, in order to define if it can help save a few productivity points.

Target has introduced a new national service called Drive Up Returns, which allows customers to return items without leaving their cars. This service is an extension of its Drive Up online order pickup program and is expected to encourage more sales and lift customer loyalty.

By offering easy and convenient returns, Target hopes to encourage customers to make more in-store purchases. Additionally, this service can reduce shipping costs and increase efficiency, contributing to the bottom line.

While curbside return services are no longer a distinguishing competitive edge, Target's Drive Up Returns service can still retain customers and encourage loyalty. The company may consider integrating its Target Circle rewards program into Drive Up Returns to further deepen customer engagement.

Target introduces Drive Up returns 

What: In February 2023, a new Simon Kucher study surveyed 15,440 consumers’ purchase intentions in 17 countries for the next twelve months.

Why it is important: French consumers are the most pessimistic of the panel. On average, they expect to reduce their expenditure on fashion by 7%.

Also on fashion expenses, the following countries are expecting a decrease:

•    Denmark: -6%.

•    Spain: -5%.

•    Germany: -4%.

•    Turkey: -4%.

•    Mexico: -1%

UAE and China remain positive.

Pessimistic outlook for consumption in the coming months

chart

What: Selfridges hosted a car boot sale with proceeds going to Women for Women International.

Why it is important: The event encourages customers to shop second-hand and backs the department store’s Worn Again initiative which encourages circular shopping through a variety of shopping experiences.

Customers could find pieces up to 75% from more than 100 brands and VIPs who donated items as part of Selfridge’s Worn Again initiative.

All proceeds went to Women for Women International, a charity which works with women living in countries affected by conflict.

Selfridges hosts upscale car boot sale 

What: The insolvency proceedings for Galeria Karstadt Kaufhof ended as a result of the decision from the Essen District Court.

Why it is important: With the end of the proceedings, a reorientation in the operative business should begin and a new CEO will take command.

Germany’s last large department store group will get a restart as a court in Essen will lift the insolvency proceedings on June 1st.

The proceedings will be cancelled after confirmation that the insolvency plan has become legally binding.

The company will focus on selling fashion items, optimize its own brands, and reduce the range of products such as toys and stationery in the future.

The remaining branches will also be completely modernized within three years and will be controlled on a more decentralized basis with a more locally adapted product range.

In order to implement the insolvency plan, Signa Group intends to provide up to EUR 200 million.

Galeria Karstadt Kaufhof ends insolvency proceedings

Galeria Karstadt Kaufhof ends insolvency proceedings WirtschaftsWoche Article

What: Harrods’ managing director has called on the UK government to reintroduce tax-free shopping

Why it is important: UK retailers are losing out to competition in other countries as travel returns and tourists can no longer reclaim VAT on purchases in the UK.

Tax-free shopping was scrapped as the UK Treasury claimed it would save GBP 2 billion, however, retailers are feeling the negative impacts of the legislation, including Mulberry who closed its Bond Street store this year as a result.

Many retailers including Harrods and Selfridges have called for a review of the tax as they fear London is losing out to rival cities such as London and Milan and the decline in visitors is impacting footfall and sales.

Harrods boss tells government to ‘stop burying its head’ and bring back tax-free shopping

What: Dubbed ‘Le Club Printemps’, the new loyalty programme is said to be simpler and more generous.

Why it is important: Retailers are increasingly relying on top customers which makes loyalty programmes key to retain these top spenders. The 3-tier status programme features Club Printemps Days which offer members up to a -15% discount in cash back paid on the Printemps Club pot.

Many services, surprises, private invitations, previews and a gift on birthdays are offered to members.

Printemps has a new loyalty programme 

What: The department store was found to be the cheapest UK rental platform for the ten most popular wedding guest dress brands.

Why it is important: The research shows that department stores can have a competitive advantage when it comes to rental services.

The savings site, VoucherCodes.co.uk, compared the prices of dresses from the ten most popular wedding guest brands on Selfridges Rental, Hurr, and By Rotation, finding that nine out of ten items were priced the lowest on Selfridges Rental when rented over a four-day period.

In comparison to smaller rental service platforms, retail giants are able to provide customers with the best value for their money as their business models create cost savings that are reflected in their pricing.

Selfridges named most affordable rental platform 

What: Cencosud’s shopping center division is starting the year off strong with an increase in revenue of 16.3% to USD 93 million.

Why it is important: The growth is attributed to the recovery of tourism in Chile and an increase in the occupancy of its complexes.

With the recovery of tourism in Chile, visits increased by 5.7% year on year, with its Cencosud's Costanera shopping center increasing its visits by 530,000 compared to 2022’s first quarter.

The company’s Ebitda increased 12.8% which was a result of higher revenues and updated contracts with better conditions.

Additionally, Cencosud Shopping has reported that its mobile app has more than 385,000 downloads and 46,000 registered patents just one year after its launch.

Cencosud Shopping increases its revenue in the first quarter driven by the recovery of tourism

What: European luxury stores will need to wait longer for the mass return of tourists as flights from China remain limited and expensive.

Why it is important: Industry executives and analysts state that it may be more important to consider the type of Chinese visitors to Europe rather than just the numbers when it comes to luxury shopping overseas.

Air ticket prices are up to 80% more expensive than pre-pandemic and the number of travelers over the May holiday period was 64% lower than in 2019. As a result, those returning to Europe are business travelers and wealthier people who are less sensitive to flight prices and more likely to secure visas.

Despite the decrease in travelers, the average transaction value by Chinese travelers in Europe in March was 28% above 2019 levels according to Planet, a VAT refund provider.

Overall, luxury companies are focusing on courting wealthier shoppers and seeing the gradual return of Chinese tourists in Europe. Before the Labor Day holiday, Chinese consumers represented the third-largest spend after French and Americans.

Luxury brands are struggling to see what the baseline to compare with is, as 2022 was a strangely depressed year, 2021 saw unusual growth, and in 2019, 70% of the luxury spend of Chinese consumers was made abroad. Even in the long term, analysts say a return to that level of spending abroad is unlikely.

Fewer luxury shoppers but bigger spenders as Chinese return to Europe

What: The Parisian department store has been transformed into a summer market as part of its new campaign, “Les Bons Marché de L’été.”

Why it is important: The summer campaign features a multitude of brands across a variety of categories, creating an attractive and immersive experience for customers.

Le Bon Marché’s summer campaign started on April 29 and will continue until June 18, with  Parisian label Sézane as the special guest.

Striped canvas awnings decorate market stalls throughout the store with crates, baskets, and trailers creating a rural atmosphere. There is also a refreshment area and the various entrances throughout the store feature card shops and lottery stalls.

In addition to Sézane, a variety of other brands are participating in the summer market with their own seasonal products.

Le Bon Marché turns into summer market as part of its new campaign

What:  The iconic Dutch chain is getting back on track

Why it is important:  This is the third year in a row that Hema posts a profit, after a decade of losses.

Hema, a Dutch retail chain, has reported a significant increase in sales and profits, with gross sales rising 20% to 1.966 billion euros in the financial year 2022, and profit before tax rising to 31.6 million euros. The number of customers in stores and online grew by almost 35%, which the retailer attributes to a strategic course set two years ago to "make Hema really Hema again".

The new strategy is being implemented in renovated stores, with four stores reopened in March and April 2023 after extensive remodeling and successful testing of new concepts. Based on this success, Hema plans to renovate more stores by summer 2023.

Hema sales are up +20%