What: Deals are starting early with Nordstrom and Nordstrom Rack with services, including gift wrapping, free gift help from stylists, and same-day or next-day order pickup.

Why it is important: Nordstrom has released a celebrity-backed campaign, announced in-store and online events, and refreshed its Balsam Hill Christmas tree lot offer at select stores, among other events and services for shoppers this holiday season.

The department store also plans to hire 20,000 employees across Nordstrom and Nordstrom Rack stores, supply chain facilities and customer support staff in order to execute its in-store and online goals.

Nordstrom boosts pre-holiday events and services

What: Frasers Newbridge is the latest investment for the group in its quest to expand across Europe.

Why it is important: Following the opening of Frasers Wolverhampton in 2021, along with renovations of standing locations, the recent opening of the Frasers Newbridge store is the first of three stores planned to open late this year.

The group remains committed to expanding across Europe by creating shopping destinations focused on experience, brands and services.

Frasers debuts signature flagship in the Republic of Ireland

What: John Lewis’ director spoke at the Bloomberg Equality Summit, expressing the highly uncertain outlook for the retailer’s performance for the end of 2022.

Why it is important: The high staff levels and employee-owned structure of the retail group are likely to make soaring inflation more impactful than the Covid-19 pandemic according to the John Lewis Partnership boss.

The cost-of-living crisis has intensely impacted consumer discretionary spending, with the retailer reporting a 99-million-pound loss for the first half of 2022.

John Lewis boss shares concerns on the effects of inflation

What: Marks & Spencer is heavily reviewing its real estate footprint.

Why it is important: Marks & Spencer’s move away away from city centre locations into easier-to-access stores that include bigger plots with free parking will likely reverse the vision of retailers in the UK and US.

Marks & Spencer is halfway through a costly plan to modernise its stores by 2028. The eventual bill will be more than GBP1bn, but the 138-year-old chain insists the strategy is starting to pay off. At a recent investor presentation, M&S cited a 30 % rise in clothing sales and a 75% increase in food since it shut a store in the centre of the Welsh town Llandudno and opened a new one in a retail park.

M&S wants to become a destination for large weekly shops rather than “top-ups” of treats and ready meals. To do that it needs large, open-plan stores with easy access and free parking, and fewer odd-shaped sites in town centres with limited access.

Marks & Spencer seeks out-of-town real estate 

What: The Tokyo department store located in Shinjuku has closed amid a comprehensive redevelopment project around the Shinjuku station.

Why it is important: Odakyu will continue selling goods in a building nearby.

Many visitors took photos and thanked staff as the building will be demolished following 55 years of operation. The moment is bittersweet for residents who have grown up with the landmark shopping mall.

Following the demolition, other department stores alongside Odakyu will be rebuilt. A pedestrian deck connecting the station’s east and west gates is also planned. In place of the former Odakyu building, a 260-meter, 48-story complex with offices and shops is to be built in 2029.

Odakyu Department Store closes for redevelopment

What: Made.com falls victim to post-pandemic optimism.

Why it is important: Made.com’s DTC and digital native advantages were short-lived as consumer habits changed post-covid leading to the brand about to go bankrupt after only going public in June of 2021.

The recent macroeconomic environment has caused freight costs to rise roughly fivefold between 2019 and 2022. Being digitally native at a time when consumers are returning to brick-and-mortar stores has counteracted their initial asset-light, vertically integrated business model.

Its decline is a reminder of the dangers of assuming both that Made.com’s millennial market was exceptional and that high demand during the pandemic was not.

Made.com bursts apart at the seams

What: New regulations are coming into force in Europe which will change the way that businesses operate and how startups will be financed and grown.

Why it is important: It is becoming more challenging for businesses operating in the EU to be able to comply with the various regulations that are being enforced. Startups have the opportunity to implement such regulations at the core of their businesses, but veteran companies will need to pivot to ensure compliance.

EU’s Sustainable Finance Disclosure Regulation (SFDR) came into force last year regulating disclosures of investee companies’ energy and water use, supply chains, waste systems and their gender pay gap, among other sustainability indicators. Further disclosure rules will come into effect on January 1, 2023, therefore the following steps should be considered in order to build a successful business model that will be sustainable over the long term.

1)    Make sustainability ingrained in the DNA of the business model

-    Regulations are cracking down on greenwashing claims, therefore companies need to make sure that all communication matches reality and does not mislead consumers.

2)    Track sustainability criteria and KPIs as soon as possible

-    These metrics need to go beyond environmental concerns and include social issues such as gender pay disparities and staff retention and should be captured as soon as possible.

3)    When choosing suppliers, have an ESG scorecard

-    Scope 3 emissions are part of SFDR’s reporting, therefore companies will need to understand their indirect impacts related to all suppliers, even outside of the EU.

4)    Appoint an ESG officer early

-    The C-suite needs to be involved and engaged in sustainability with an ESG advocate sitting at the top of the company.

How the changing ESG regulations in Europe will impact businesses

What: For the month of September, year-over-year, Spanish shopping centres saw visits increase by 10.2%.

Why it is important: According to the monthly index by Sensormatic Solutions, Spanish shopping centres grew in September following a 2.9% dip in August.

However, comparing this year with 2019, shopping centre visits decreased by 4.5%. The annual accumulated figure for 2022 is down 12.8% compared to 2019.

Spanish shopping centres grew 10.2% in September

What: Jane & Hall Associates’ latest investment research lays out Europe’s retail trends.

Why it is important: The firm reported that the most notable trend was weaker consumer spending in Europe compared to the US.

As well, there have been and continue to be a significant number of store openings and remodelling in London. Despite strong in-store assortments across apparel, accessories and footwear as well as tourism returning, the firm saw that consumer discretionary categories were hit harder in the US.

Jane & Hill Associates also expressed caution about brands with strong European presence such as Nike, Foot Locker, Abercrombie & Fitch, Levi’s, and VF Corp, among others.

Research shows weaker consumer spending in Europe

What: The U.K. retail industry is disappointed in the reversal of a tax-free government policy that will affect tourists’ shopping behaviours in the country and cost the sector USD1.36 billion.

Why it is important: The decision leaves the UK as one of the only European countries not to provide a tax-free shopping scheme to encourage tourism.

The tax-free scheme would have enabled overseas tourists to get a refund on the VAT paid on goods bought on the high street or in malls, at airports and other departure points, and exported from the U.K. in their personal baggage.

The policy would have delivered growth to accelerate post-pandemic recovery, and a significant boost to UK manufacturing as it forms part of the ecosystem of the sector and supports jobs across the country.

Tourists may now prefer to shop in other cities like Paris, Madrid or Milan instead of London because they can receive the return of the VAT; the policy would have helped to strengthen the UK’s position as a top destination for international shoppers. As well as other cities gaining GBP5 million a week from high-earning British spenders who can make cheaper purchases on the continent.

Walpole, a company which represent the UK luxury industry, said this is their immediate priority, they are asking the government to do a full economic review and will work closely with the new Chancellor to reach an outcome which supports the sector and the countless jobs and industries it supports.

Policy reversal slams hammer on UK tourism and British high street- Source 1

Policy reversal slams hammer on UK tourism and British high street- Source 2

What: Frasers has reportedly sent out letters to brands and suppliers that no fur products are to be supplied as they move towards fur-free.

Why it is important: Following numerous protests by the animal rights coalition, PETA, along with the organization’s investment in the business in 2020 to bring the discussion of fur-free to Frasers’ boardrooms, the group has announced it will move to end sourcing fur-based supplies and products.

The strategy is part of PETA’s shareholder campaign, which has seen it invest in an array of clothing companies to gain access to shareholder meetings.

Frasers Group to go fur-free

What: Peek & Cloppenburg has opened a store in Brussels this month, marking its return after the company withdrew over 20 years ago.

Why it is important: Located in the Westland Shopping Center with a sales area of close to 3,800 square metres, the new store represents Peek & Cloppenburg’s resilience in expanding into the Belgium market.

The highlight of the new location is its sports area which targets a young demographic that Peek & Cloppenburg hopes to attract.

Peek & Cloppenburg expand in Belgium

What: This is the second collection of luxury hotel brand The Ritz, done in partnership with Frame, a trendy fashion label.

Why it is important: Through collaborating with the trendy fashion label Frame, the Ritz seeks to bring a new and younger vision to the hotel brand through a branded luxury fashion offering.

A range of about twenty items from pyjamas to sports jackets, jeans and pet items accent the heart of the collection which seeks to deliver high-end basics featuring the institution’s logo.

The Frame X Ritz Paris line is sold in the Frame chain with 15 stores in the UK and US, major retail sites like Net-a-Porter, Moda Operandi, Louisa Via Roma and Frame’s Tmall Flagship store. The collection is also in several retailers such as Harrods, Le Printemps, Le Bon Marché, Holt Renfrew in Canada and NK in Sweden.

The brand recently opened a large pop-up boutique at Bergdorf Goodman during New York Fashion Week.

Frame X Ritz Paris transforms the hotel into a luxury fashion brand

What: Inflation has started to be visible in the US and reflects in a new channeling of the instore traffic.

Why it is important: There is a contraction of the market, as every class of customer is starting to worry about its spending power, even though luxury customers are less affected than middle-class. The winter season is going to be a stress test for many retailers inside and outside the US.

In the US, all companies are not affected in the same manner. Placer.ai has analysed the foot traffic and determined that the when it comes to mass retailers, Dillard’s has been the most affected in terms of traffic between June and September, compared with Kohl’s, Macy’s and Belk.

Nordstrom was also the most affected in the luxury market, and Saks Fifth Avenue was the only one which was able to grow its YoY traffic between June and September. Mid-range retailers are favored by customers while luxury stores keep the top end of their clientele, which is not that affected by financial woes. As a consequence, this impacts the foot traffic as only the core customers for each segment remain loyal.

In the US, Saks Fifth Avenue is the only department store growing its foot traffic 

What: Klarna is launching an app that integrates e-commerce functions, shoppable content and improved consumer-to-retailer connections through digital optimization.

Why it is important: Social commerce appears to be a continued focus as Klarna announces the launch of Klarna Spotlight and its creator platform that connects content creators and merchants to scale and optimize campaigns.

The smart search functionality of the app is aimed at consumers, to cut time on searching for the lowest deals. Features also include shoppable video content, delivery tracking, digital receipts and “seamless” returns to establish the BNPL company as a leader in e-commerce and a ubiquitous connection between brands and shoppers.

Klarna's enhanced app for consumers, retailers and content creators

What: John Lewis partners with Hurr to launch a ‘dress for hire’ rental service as part of the department store’s continued efforts to cater to shoppers suffering from the cost-of-living crisis.

Why it is important: The partnership also acts to offset the environmental impact of John Lewis while hopefully securing a slice of the rental clothing market set to reach 2.3 billion pounds by 2029.

In 2020, the retailer launched a furniture rental service and earlier this year in May the retailer announced its subscription service for rented children’s clothes in partnership with the kidswear rental platform, Thelittleloop.

John Lewis partners with Hurr

What: Falabella has confirmed the donation of up to 4.8 tons of clothing to the Fundación Banco de Ropa to benefit up to 6,500 people.

Why it is important: Falabella has allied with the Fundación Banco de Ropa as part of its ‘+Green’ strategy focused on the circular economy, conscious brands and sustainable operations.

In addition, Falabella Peru has donated more than 1,800 clothing items, 50% of which have been allocated to the NGO Remar to benefit women in Peruvian territory who are economically vulnerable and in violent situations.

Falabella donates 4.8 tons of clothing

What: To give a well-needed boost to tourism, Hong Kong has announced a 500,000 airline ticket giveaway worth 254.8 million USD as well as dropped inbound quarantine requirements.

Why it is important: Luxury and retail markets will likely see a boost in business in 2023 due to Hong Kong’s plan to support an increase in tourism.

The ticket giveaway and the removal of all remaining travel restrictions will begin in 2023 as part of the city’s plan to attract visitors from around the world.

The airport authority had purchased the tickets from Cathay Pacific back in 2020 as a pre-emptive measure to boost tourism once restrictions eased.

Hong Kong offers free flights to boost tourist economy

What: Germany’s retailers struggle with consumers’ reluctance to spend due to fears about rising inflation.

Why it is important: The Wiesbaden authorities adjusted the statistics to account for price increases in real terms, which showed that revenues had fallen 1.3% from July to August, and a 4.3% drop for August, year-over-year.

Food trade revenues fell to their lowest levels since January 2017. Real declines in sales also appeared in the trade of textiles, shoes, household appliances and building supplies, as well as internet and mail order business.

Gas stations were the outliers in August with a 14% increase due to the tank discount motivating many drivers to fill up.

Retail revenues drop

What: LVMH has signed a three-year contract with Chinese developer Hang Lung Properties that will see the groups working together to reduce energy use and environmental impact.

Why it is important: As part of LVMH’s overall reduction plan, the group aims to measure and track energy consumption at its stores and source 70% of its materials within 300 miles of those stores in partnership with Hong Kong-based real estate developer Hang Lung Properties.

The Chinese developer will cut its energy consumption by 18% by 2025 across its 100 shopping malls.  This follows LVMH’s overall energy reduction plan, which aims to cut consumption by 10% worldwide by October 2023 while China aims for total carbon neutrality in 2060.

LVMH is currently seeking out similar agreements with property groups in the U.S. and Europe.

Duty-free sales soar in Japan following the borders reopening 

What: A similar evolution to that of the customer journey is happening in the workplace as employees now require a personalized experience and benefits packages which address the specific needs of each associate.

Why it is important: NMG’s People team has used advanced analytics to drive a renewed focus on four key pillars of the associate experience: total rewards, flexibility, career development, and ESG.

These focuses have had a notable impact on recruitment and retention, with Bloomberg recently reporting that workers are now willing to trade 5% of their compensation for more flexibility. The business’s remote working culture, known internally as the NMG Way of Working, also encourages associates to integrate life and work to accommodate their professional and personal commitments in a way that prioritizes health and well-being.

Neiman Marcus Group transforms the associate experience

What: Unibail-Rodamco-Westfield (URW) has unveiled Westfield Rise, its in-house media, brand experience and data partnerships agency.

Why it is important: Rise “will be able to serve the advertising and media industries in a bespoke way to create durable and measurable partnerships and explore new tailor-made opportunities”. The “client-centric approach, powered by data-driven insights and metrics, will serve brands, agencies and media buyers by delivering compelling off- and online media campaigns and marketing activations to our incredibly engaged audience”.

Rise is meant to be “a one-stop-shop for brands and media-buyers to create measurable campaigns across URW’s platform which includes a network of 1,700 digital billboards, 170 brand experience locations, and a range of online advertising capabilities.

Rise offers clients access to a fully GDPR-compliant platform “leveraging qualified audience data on the company’s massive footfall, including 550 million yearly visits in Europe, along with 40 million consumers online”.

Unibail-Rodamco-Westfield launches in-house retail media agency

What: The Belgian company is back to profitability after having lost more than €20m in the past two years.

Why it is important: The company is in a similar situation experienced by Magasin du Nord a few  years ago, by being profitable and growing but owned by a parent company deeply in trouble.

Belgian department store chain Inno is back to profitability after ending 2020 with a loss of €10,1m and 2021 in similar numbers. In 2022, the department store company expects to end the exercise with a positive EBITDA of €10m.

This is the result of 21 strategic projects, some of which were detailed in the IADS Exclusive article dedicated to Inno, including its own procurement strategy, dedicated ERP, and the company expects sales to rise to €350m in 5 years, up from €314m this year.

Since most of Inno’s operations are disconnected from its owner, Galeria Kardstadt Kaufhof, the difficulties experienced by the German parent company do not have any impact on Inno.

Inno is back to profitability after 2 years 

What: After a 40% drop in sales during 2020 due to the pandemic, 2021 was much better; their revenue rose 28% to GBP653.4 million but is still not the same level of revenue that they had before Covid hit, with GBP852.9 million.

Why it is important: The rise in revenue is a start and reflects the end of lockdowns, greater confidence among shopping going into physical stores and the slow return of international tourists.

During the year the company took several steps that strengthened its balance sheet, receiving investments from its immediate parent company adding up to a net GBP50 million.

And the recovery of UK retail got under way with international tourists returning to the country in relatively large numbers and British shoppers also feeling more confident about going into stores.

On the downside, the cost-of-living crisis is affecting British consumers and the past two months have seen a wider downturn in UK retail. It’s unclear yet whether the more affluent shoppers who makes Selfridges a regular habit are still shopping in large numbers.

Selfridges’ sales bounce back post-pandemic but remain loss-making