What: The Indian department store company is entering a new market.

Why it is important: While many department store companies in the world go upmarket, Shoppers Stop aims to pre-empt a lower segment, probably having in mind the arrival of new players on the market.

Indian department store company Shoppers Stop is opening a new store format, based on “value” in fashion and lifestyle categories. The new format, between 700 and 800 sqm, will be opened in Tier 2 cities outside of metropolitan areas and the first pilot is bound to open in the next months.

This marks a change for a company which has traditionally relied on premium and mid-segments in metropolitan cities.

Shoppers Stop to open a new store format 

What: Due to the economic context, France is postponing by 4 months the implementation of a very visible measure related to environment.

Why it is important: It might not remain an exception and other countries might follow suit, even though the economical context is, for now, not encouraging. Be ready.

France was planning to ban receipt tickets starting 1st of January 2023, due to anti-waste concern (and as a part of a wider set of measures, including having shops keeping their doors closed when heating or AC is on). However, due to inflation and the fact that receipts are still important to customers, it has been decided to postpone the enforcement of this measure to 1st of April 2023.

The measure still allows customers to get their printed receipts (including bank card receipts, ATM receipts etc..) but on request. They represent 30bn pieces of paper a year, difficult to collect and recycle due to their size.

France delays ban on sales receipts due to inflation 

What: Reliance’s acquisition seems to be an answer to Shopper’s stop latest move.

Why it is important: Galeries Lafayette are set to open two new stores in India within 2024. India seems to be accelerating into becoming a serious rival to China when it comes to retail growth.

Indian conglomerate Reliance Retail has acquired the Indian division of German retail company Metro for $344m.

Metro entered India in 2003 and currently operates 31 stores with 3,500 employees, mostly in prime locations. It recorded $930m in sales in 2022 (ending September).

Interestingly, the market is accelerating and this move seems to be a response to Shopper’s Stop new store format that we reported here.

Reliance retail acquires Metro AG India for $344m

What: Fenwick has sold its London flagship store in order to focus on its regional stores fleet.

Why it is important: Strategic alignment requires difficult decisions and being able to get rid of symbols, in order to guarantee the perennity of the company.

Fenwick has sold its Bond Street building in London for an estimated amount of 430m pounds. The store, the fourth smallest in the fleet of 8 stores will remain open until Q1 2024. It currently makes half of the Newcastle historic flagship location.

The proceedings from the sale will fund significant investments in the other stores, especially the Newcastle and the Kingston upon Thames ones, as well as improve its digital presence.

Fenwick to close its London store 

What: A debit card now allows customers to perform their payments in cryptocurrencies.

Why it is important: Even though the model is unclear, retailers should be aware of their customers’ evolving needs and expectations when it comes to payments, especially the ones with their own credit card program.

Revolut, the “easy banking” app, adds a new feature coming on top of already all the specific elements its credit card already allowed customers to do (such as buying crypto directly or trading gold), as customers are now allowed to pay in crypto via their credit card simply by tweaking parameters in their app.

It is not clear from the article if this feature is ‘transparent’ for the retailer, however this move is an additional step towards democratization of payments via crypto, even though cryptocurrencies are currently out of favour.

Revolut adds crypto spending feature to debit card 

What: Frasers Group has revealed detailed plans for its new North East mega flagship which will house its major brands alongside a gym.

Why it is important: Back in August, Frasers revealed that the group had snapped up the former department store in the Metrocentre’s Red Mall, in which the Partnership agreed to a 15-year lease on the 130,000 sq ft unit which will include a 70,000 sq ft Flannels on the ground floor, and a 60,000 sq ft Sports Direct on the first floor, incorporating an area for Evans Cycles across 1,000sqft.

The new addition of the Everlast Gym will be on the first floor, according to the plans, plans show, taking up 33,800 sq ft of space including changing areas, two treatment rooms and a large reception area.

The new store is part of the retail giant’s plan to create several UK flagship sites bringing everything under one roof.

Frasers to open gym in new Metrocentre megastore

What: Alibaba is expanding its presence in Spain with the launch of Miravia, a new fashion, beauty, food and lifestyle marketplace.

Why it is important: Alibaba’s Miravia platform seeks to offer a different shopping experience to consumers, giving them access to the latest trends in fashion, beauty and lifestyle through innovative solutions, such as exclusive content created by influencers or virtual make-up trial tools.

Miravia also offers a wide variety of products in categories as diverse as beauty, fashion, body care, electronics, food, babies, pets and health, with big international brands, Spanish brands, and local young entrepreneurial brands.

Alibaba launches a new fashion and lifestyle marketplace in Spain

What: Nordstrom CEO cites strain across all consumer demographics affecting the shift in its merchandising mix as part of its plan to improve the retail group’s performance in 2023.

Why it is important: As a response to the uncertainty surrounding the next year with low-income households the most affected economically, clean inventories, improving Nordstrom Rack and elevating the customer experience are step one for the 2023 agenda.

At the beginning of 2022, Nordstrom announced its mission to simplify its outlet offshoot Nordstrom Rack’s focus “to great brands at great prices.” Thus, the company is looking to differentiate by offering brands not normally available in off-priced channels, and which customers can identify from the regular Nordstrom assortment.

Like many other retailers, Nordstrom is looking to clear out inventory in light of softening demand for clearance during the inventory glut.

Finally, the supply chain is a key focus for reactivity in the next year for Nordstrom and other companies hoping to survive a potential recession.

Nordstrom’s 2023 Focus 

What: China is abolishing its zero Covid strategy likely due to a shrinking economy, but Covid increases may delay recovery plans.

hy it is important: China’s production and retail sales missed November forecasts, resulting in the country’s worst output data in six months, with growth at 2.2%, down compared to October’s 5%, and below expectations of 3.6%.

Al Jazeera reported China’s retail sales fell 5.9%, with the service industry especially hit. The slump in retail sales was higher than expected, with online sales of physical goods rising by 4% year-on-year, down sharply from October.

As the world continues to see inflation and higher cost of goods caused by the Russian invasion of Ukraine, demand for China’s exports also fell by 8.7% compared to 2021.

Covid surge dampens China’s retail reopening

What: Odakyu department store business has been considerably affected in 2022.

Why it is important: The bad performance is not linked to traffic or consumption as the transportation and the hospitality businesses of the same group are both rising on the same period.

Odakyu department stores, which belong to the Japanese railway company Odakyu Electric Railway, saw its revenue down -41.1% to JPY5.78bn, for the full year 2022. Interestingly, this is not correlated to traffic, as the total passenger traffic carried by the train division increased +5.6% and the hotel business division increased its sales by +90.3%.

Odakyu department stores are down -41,1% FY in 2022 

What: Korean department stores are entering in the second-hand business in order to remain relevant to younger generations.

Why it is important: Even in such a hot market, customers are becoming price-conscious and concerned about the environment. Second-hand is now a worldwide trend in department stores, even though the profitability of such operations remains to be proven.

Korean department stores are increasingly looking at second-hand items in order to attract younger and price-conscious customers. With that in mind, Hyundai has opened an entire floor dedicated to second-hand in its Sinchon branch (Western Seoul), after a sneakers-only resell store in the Hyundai Seoul which opened in February 2021 and proved successful in attracting new customers.

otte is testing the idea through popup stores, the latest one being a second-hand store called “Closet Share” in Busan in September, which sold out within two days. The company also invested in Joongonara, the largest e-market for second-hand products in Korea, for $23.04 million.

To be noted, Shinsegae also invested in another second-hand specialist last January.

Hyundai and Lotte venture into second-hand items stores 

What: Falabella announced that in the last meeting of the board of directors the resignation of Hernán Büchi Buc from his position as director of the company, effective December 13.

Why it is important: The departure of Hernán Büchi Buc follows the conciliation agreement approved this November in Chile by the Free Competition Defense Court and signed between the National Economic Prosecutor's Office and Falabella, to end the trial that began in December 2021 for allegedly Violation of the horizontal interlocking prohibition.

Falabella proceeded to appoint Ricardo Cruzat Ochagavía as the new director, who will replace Büchi Buc during the most recent board of directors meeting.

Falabella director replaced by Ricardo Cruzat

What: The John Lewis Partnership has revealed plans to build 1,000 rental properties on its land as part of a plan to diversify its business.

Why it is important: John Lewis Partnership plans to utilise its own property portfolio to build 5,000 out of 10,000 homes within the next ten years, which will be available in different sizes with short- and long-term tenure options as well as the option to be furnished by John Lewis.

The first three proposed sites include building over Waitrose shops in Bromley and West Ealing in Greater London, as well as replacing a vacant John Lewis warehouse in Mill Lane, Reading.

The project, which is subject to planning permission, includes commitments to affordable housing and sustainability tied to its 2035 net-zero pledge.

John Lewis looks to diversify through rental properties Source 1

John Lewis looks to diversify through rental properties Source 2

What: The cold weather in the UK is keeping Christmas shoppers at home resulting in increases in online shopping and declines in foot traffic.

Why it is important: Pre-Christmas footfall dropped 10.2%, down 20.1% compared to 2019 according to figures from Springboard.

The high street saw 15.7% fewer shoppers. Central London took a massive hit, seeing 31% fewer shoppers than the week prior.

Cold weather dampens UK footfall

What: Printemps opened a department store in Doha the last week of November, extending over 40,000 square metres on three floors which showcases 600 brands, 200 of which are exclusive to Printemps

Why it is important: Printemps’ newest location is the largest luxury department store in the Middle East and the group’s second-largest brand after the boulevard Haussmann flagship in Paris.

Touted to be the ‘next-generation’ of department stores, ultra-personalised product offers will utilize technology echoing Printemps’ recent launch in Web3 (Digital Fashion by Printemps). A VIP lounge will give customers privacy to use 3D services and holograms to interact with on-site personal shoppers and staff of the Haussmann branch in Paris from Doha.

As well, Printemps has partnered with M7 to create a talent incubator programme which offers a three-month mentorship to local designers that can eventually showcase their creations within the complex. Titled the ‘Doha Oasis’, the complex includes a 5-star hotel, amusement park, cinema, and Printemps’ 2,600 square-metre spa.

The store’s interiors have been designed by Canadian studio Yabu Pushelberg, which also designed the La Samaritaine complex in Paris.

Printemps Doha opens with innovative customer experience

What: Platforms selling vintage and upcycled goods are gaining popularity in cities including Shanghai and Beijing as customers become more price-conscious.

Why it is important: Rising prices, more environmentally conscious consumers, and the celebrity effect are normalizing secondhand shopping for Chinese shoppers, buying not only resale luxury goods but pre-owned fashion and accessories across price points.

According to data released by the Chinese National Bureau of Statistics in October, apparel prices rose by 0.5% compared to last year, leading some to adopt secondhand shopping. Gen Z is becoming more accepting of resale, however, they tend to visit secondhand markets for social reasons rather than environmental ones. As well, in a July survey, online technology platform Youth36kr found younger generations are increasingly inclined to save rather than spend.

Recently, sustainable lifestyle company Bottle Dream and content platform Xiaohongshu launched a recycled fashion initiative in Shanghai complete with used clothes exchanges, upcycling craft workshops and other activities. According to Xiaohongshu, the three-day secondhand marketplace brought more than 2,000 people together.

Xiaohongshu is watching engagement around secondhand rise: circular fashion has garnered more than 20,000 notes as of September 2022, a 693% increase on the prior year.

Secondhand shopping starts to take off in China

What: Disappointed with Farfetch’s declaration for the luxury platform, shareholders sent shares of its stock down 34.9% to USD 5.53.

Why it is important: As customers are beginning to favour in-store shopping again, and in light of the global economic strain, Farfetch’s general goals for driving growth in a fragmented luxury market were not enough to satisfy investors who sent the stock down 34.9%.

Neves presented Farfetch as a collection of three main and intertwined businesses: Platform Solutions, which provides e-commerce capabilities to brands and retailers; the Marketplace, connecting buyers and sellers via e-commerce, and the New Guards Group, which develops brands.

Investors are questioning Farfetch’s capabilities to add up all its ventures, especially how it can leverage New Guards.

Farfetch stock drops 34.9%

What: The New York Times reviews the situation of luxury in the country.

Why it is important: China is not anymore the global growth engine for the industry, but this is only a temporary setback as it is expected that 40% of luxury shoppers will be Chinese by 2030.

2022 has been a difficult year for luxury retail in China, as shown by the new project Taikoo Li Qiantan in Shanghai, which opened on 120,000 sqm at the end of 2021, but stood mostly empty throughout the year, due to mass lockdowns. According to the New York Times and Blomberg, China’s luxury goods market share might have been halved in 2022 due to store closures and customers’ reticence to come back once they reopened.

Only brands such as Hermes or Moncler posted growth in the country, the rest did not experiment the expected V-shaped recovery. While during the pandemic brands focused on opening new locations in second and their tier cities, as well as in Hainan, the New York Times reports that they now redirect their investments in the US, which is growing faster.

As a consequence, there is now a wait and see attitude in China, as, even though no one challenges the fact that the country still remains an important part of the business, players lack visibility on when the market will take off again. As Bain states it, “over dependence on China is risky, but not as risky of not being there at all”.

In China, Luxury shopping faces headwinds 

What: A light Christmas article about the joys of shopping luxury at Bergdorf Goodman.

Why it is important: A very good promotional piece allowing to casually emphasize the behind-the-scene details to make sure customers looking for exceptional Christmas pieces and service know where to go in Manhattan.

The NY Times journalist spends some time within Bergdorf Goodman, which is at the same time a pretext to review the state of department stores affair and also promote the iconic NY luxury destination store. The article astutely insists on the “unique” status of Bergdorf Goodman as a place where true luxury is displayed and where no one ever says no.

Surviving 10 hours and 32 minutes at Bergdorf Goodman 

What: Retail may have been under pressure in recent years, yet Savills report has shown how retail real estate is one of the most resilient for its asset class with major investments during 2022.

Why it is important: Property specialist Savills said that 26.9 billion euros have been invested into the European retail sector so far in 2022, which is up 25% compared to 2021. Investment in shopping centres accounted for 27% of all the retail activity, compared to 14% for the same period last year.

Savills has also observed that there appears to be little change in expansion strategies despite the economic headwinds in Europe. Off-priced retailers and fashion retail investment is continuing with only a small drop in pace during Q3 of 2022.

Prime high street locations are being viewed more favourably due to footfall recovery and rent drops. Savills said on average, prime high street rents across Europe are 34% down on Q4 2019 levels, and they’re even down 29% in usually strong London. The report said that grocery stores still account for around a third of all European retail investment activity and discounters' investment has doubled this year.

Savills reports retail as most resilient real-estate asset class

What: The Emirati retail conglomerate Majid Al Futtaim (MAF) stated that it had raised 1.25 billion dollars a revolving credit facility linked to the company’s environmental, social and governance goals.

Why it is important: The loan aims to cut MAF's Scope 1 and 2 emissions and implement LEED certification for its malls.

First Abu Dhabi Bank led the fund raising, the conglomerate's second sustainability-linked loan, as sustainability coordinator and agent. In June, MAF raised USD 500 million with perpetual green bonds, refinancing existing hybrid bonds.

Majid Al Futtaim raises USD 1.25 billion linked to ESG goals

What: Due to economic strain and uncertainty, companies must navigate properly by retaining employees, investing in emerging roles and building the skills of current leaders to ensure they have the talents to grow even in 2023.

Why it is important: As most companies are hiring or hoarding employees, the dialogue between companies and recruits is changing, leading to competitive employer branding campaigns and benefits packages.

Business of Fashion highlights Macy’s shift in communication to recruit new employees which has led to 97% of corporate jobs filed and “close to that number” for hourly positions. The crisis caused a huge labour shortage and record quitting rates which has created the challenge of developing new policies such as working from home to attract and keep employees. A potential recession in 2023, means that layoffs will be necessary even as the labour shortage keeps key roles unfilled. Instead of assuming employee loyalty instead, over-hiring or resorting to layoffs when the recession hits, experts stress the importance of grooming and leveraging current talent or creating cross-functional roles.

022 showed a C-suite turnover trend making it difficult to redefine who should lead a fashion company. Leadership is more about partnerships, creating transparency and developing community as new and evolving roles around diversity, sustainability and social governance continue to appear. Hourly employees may be concerned about the lack of or mismanagement of these roles, making them important from top to bottom.

Finally, companies need to be mindful of the impact new policies around flexibility and work-life balance affect the working culture. Leader bias toward certain employees who opt to work in the office instead of online could create dysfunctional dynamics. Thus, being intentional, agile and open to adapting to new work models can help with creating an efficient and desirable workplace environment.

Workplace trends of 2023 defined by BoF

What: The Australian department store company is being sold off by its owner, the South African retailer company Woolworths to Anchorage Capital Partners.

Why it is important: David Jones, just like Myer’s, has been lagging in terms of profitability for a number of years, as the Australian market is increasingly polarized.

Woolworths Holding, the South African retail giant who bought Australian David Jones in 2014 for $1.41bn, is reported to sell the company to Anchorage Capital Partners, a private equity firm. According to the newspaper, the selling price would be between $120m and $130m and the deal should be closed before the end of this year.

Woolworth has created an agreement with Anchorage Capital Partners due to a disappointing return on investment, resulting in Woolworth’s withdrawal from the department store market and Anchorage’s takeover of 43 stores, some of which had already closed as part of Woolworth’s turnaround efforts.

It is specified that David Jones' flagship on Bourke Street is not included in the sale and that with its estimate of AUD 250 million it would likely be sold next year. The current CEO, Scott Fyfe, is expected to stay on, with the new owner backing his recovery plan (referred to as Vision 2025+), with the company expected to continue to focus on physical and online sales.

David Jones, after suffering from the Covid-19 pandemic like other retailers, turned a profit in 2021 for the first time since 2018, and revamped its flagship stores in Sydney and Melbourne.

David Jones to be sold to private equity firm SOURCE 1

David Jones to be sold to private equity firm SOURCE 2

What: Vogue Business reviews the main retail trends worth to be remembered that took place in 2022.

Why it is important: 2022 was the return of the high-scale collaborations, not only between brands, or between a brand and a retailer, but also between retailers themselves. The IADS expects more of such collaborations as it is a great way to generate brand visibility and open up databases, while maximizing the local aspect of both retailers at the same time.

Vogue reviews what happened in retail in 2022, in terms of store openings, collaborations and consolidation. According to the medium, physical stores made a comeback in 2022 and the formula for brick and mortar evolved since the pandemic, with more experience and entertainment.

This is the reason why the collaboration that took place were interesting: Dior takeover at Harrods (reported to be ‘overwhelmingly positive’ even though on another note, Harrods sent a promotional email with 50% discount as early as the 24th of December), Dior and Sacai collaboration at Browns, Jacquemus in Selfridges, or the collaboration between Machine-A and Smets, or Nordstrom and 11 Honoré. More collaborations of that scale are planned to take place in 2023.

The year in retail and a look at collaborations