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% 

What: Lotte to open a pop-up store showcasing merchandise from the National Museum of Korea.

Why it is important: Culture is increasingly a category per se, especially when it overlaps with national pride.

The pop-up store will be located in one of the basement levels of the department store’s Myeongdong branch. It will offer approximately 200 different kinds of merchandise for sale until June 4.

Among the items available for purchase will be a miniature statue of Maitreya in meditation, which gained popularity after BTS member RM was seen with one.

Lotte to open National Museum of Korea popup 

What: John Lewis is creating a unified retail experience by focusing on what the consumer wants and knowing the strengths of each of its channels.

Why it is important: Unified retail is increasingly being adopted across the industry.

John Lewis is focused on what the customer wants and how it can be there while also figuring out the characteristics of each channel and what makes them successful.

The John Lewis app helps unify the experience and has been an increasingly important part of the department store’s offer, as it accounted for a quarter of all online sales last year.

The retailer has seen a large number of consumers using the app and then shopping in-store and is also a great way for them to communicate their message.

As a heritage retailer, the company is focusing on educating its staff as it ramps up its digital strategy and pivots as 60% of its sales come from online.

How John Lewis is moving toward unified retail

What: The Indian company will take a 51% stake in the fashion group in a deal valued at 1650 crore rupees (about USD 202 million).

Why it is important: ABFRL is prepared for its next phase of transformational growth with this acquisition as it expands its ethnic wear portfolio.

TCNS Clothing’s portfolio includes traditional Indian brands which the company has sold through more than 650 exclusive brand outlets, 2,300 large format stores, and 1,100 multi-brand outlets in its home market.

Aditya Birla Fashion and Retail acquires TCNS Clothing

What: SM Investments reported a 33% growth in its net income to PHP17.3 billion in Q1 2023 driven by strong performances from its banking, property, and retail businesses.

Why it is important: The positive results of the conglomerate, which is invested in market-leading businesses in retail, banking, and property, reflect the resilience of consumer demand in the Philippines despite the challenges brought by the pandemic.

SM Investments, the country's largest conglomerate, reported a 33% increase in its consolidated net income to PHP 17.3 billion in Q1 2023, compared to PHP13.0 billion in the same period last year. The conglomerate's revenues in the January to March period rose 21% year-on-year to PHP 138.2 billion.

Meanwhile, the banking segment of the group accounted for 47% of reported net earnings from core businesses, followed by property at 26%, retail at 17%, and portfolio investments at 10%. BDO Unibank, Inc. reported a net income of PHP16.5 billion, up 41% year-on-year, while China Banking Corporation recorded a PHP5.0 billion net income for the first quarter, up 3% from the same period last year.

SM Prime Holdings, Inc. registered a consolidated net income of PHP9.4 billion, 27% higher than the PHP7.4 billion in the same period last year. SM Retail's net income grew 51% year-on-year to PHP3.9 billion, while revenues were up 22% year-on-year to PHP91.2 billion.

SM Investments Q1 net income grows 33%

What: Both sales and profitability improved.

Why it is important: The Stockmann Group’s revenue increased by 1.2% and was EUR 198.5 million. Net result amounted to EUR 19.5 million.

Both the Lindex division and the Stockmann division strengthened sales and profitability. The adjusted operating result improved to EUR -2.4 million. The operating result was EUR -2.9 million (9.8). The gross margin decreased to 56.4%.

In 2023, Stockmann expects the Group’s revenue to be in the range of EUR 960–1 020 million and the Group’s adjusted operating result to be EUR 60–80 million. The guidance is based on the assumption that the continuing high inflation will increase costs from 2022 and have an adverse impact on consumer demand.

The department store is being transformed into a destination hub that offers customers an inspiring environment not only for shopping but for entertainment and socialising as well. Stockmann is therefore refocusing on the Helsinki flagship experience. As the first step of this journey, a new inspirational children’s section has been built in the Helsinki flagship store. Another example of ongoing strategic repositioning is an expanded range of luxury and affordable luxury brands: Louis Vuitton’s store opened in Stockmann’s Helsinki flagship store. The partnership is an important step towards the targeted position.

Stockmann Group’s 2023 Q1 sees a positive start to the year 

What: The e-commerce platform reported USD 1.5 billion in revenue for the first quarter and announced that it would be selling the majority of its logistics business, resulting in 20% of its staff being laid off.

Why it is important: The company saw its revenue increase 25% compared to last year and is looking towards AI to help its customers.

In addition to an increase in revenue, Shopify reported USD 717 million in gross profit and an operating loss of USD 193 million, with the operating loss representing 13% of revenue, up from 8% of revenue last year.

In a public memo, Shopify said it had spent the last year focusing on its primary mission of making the best possible e-commerce product that is easier to use, more participatory, and more common.

The company is selling the majority of its logistics business to Flexport who will become their partner and preferred provider. Additionally, Shopify will receive stock representing 13% equity interest in addition to its existing equity interest. As a result of the deal, around 2,300 employees will be laid off.

Shopify is now looking to AI and the the new capabilities it can unlock to better help its customers. In the last quarter, the e-commerce platform launched a new AI assistant on its shopping app and also launched Pinterest as an advertising channel for Shopify Audiences.

Shopify reports USD 1.5 billion in revenue, lays off 20% of workforce