What: Unibail Rodamco Westfield plans to reduce US exposure from 2022, once market conditions improve.

Why it is important:  the end of big is beautiful: URW plans to focus on high quality locations, enhanced by data analysis collected at a global level.

URW is expecting a market rebound in 2022 in the US, and is prepared to wait until then, to offload US location once their value comes back to acceptable levels. The group plans to focus on choice locations, carefully animated by well selected and often renewed brands, supported by consumer data collected at a global level, and step away from the pure mall operation job.

Unibail-Rodamco-Westfield Expects to Start Selling U.S. Malls in 2022 

What: Two key women executives, leaders in digital operations and merchandising, are leaving the company.

Why it is important: Neiman Marcus is entering next phase of its digital efforts.

Katie Mullen, chief digital officer since July 2020 will step down this summer. “Katie has set Neiman Marcus Group on a course for long-term success, and we are well-positioned to move to our next phase of digital capability building,” the company said in an emailed statement.

Melissa Lowenkron, a 24-year veteran who started at the company as an assistant buyer in children’s is leaving the company as senior vice president and general merchandise manager of handbags, ladies shoes, beauty and jewellery. “Her leadership, deep merchandising experience and passion for developing people throughout the organization had a significant impact on our business,” the company said.

Last week, Neiman Marcus said that it had hired Bob Kupbens to be executive vice president and chief product and technology officer to lead the next phase of its digital efforts. He started Monday and takes over from Mullen who is staying for a transition period.

A couple of key executive departures at Neiman Marcus 

What: the live sale will offer customs-cleared luxury fashion goods

Why is important: Lotte enhances domestic duty-free sales through digital events

Lotte Duty Free aims to match the success of its first LuxeMall Live event hosted on 4 February. The event featured customs-cleared duty free luxury fashion products (that do not require customers to leave the country) for discounts of up to -70%. More than 60% of the customers were from outside of Seoul and finding it difficult to purchase offline.

Stakeholders and customers’ expectations are high following the success of the first event. The event can be watched through the LuxeMall homepage (ldfluxemall.com) or on the LuxeMall mobile app.

Lotte Duty Free plans on adding new brands and products through seasonal exhibition and other sales events to attract domestic customer purchases. The next LuxeMall product update will see the addition of 13 000 new items from 80 brands.

Lotte Duty Free will also introduce these products at its Lotte Duty Free COEX store. More than 40 brands, including Burberry, Givenchy and Ferragamo will be available at the COEX store from 2 March. Lotte Duty Free will also continue to sell customs-cleared domestic duty free goods through the integrated online platform Lotte ON.

Lotte Duty Free to host latest live sales show on dedicated LUXEMALL platform

What: Target expands its 15-year collaboration with Apple

Why is it important: new initiative is built on the success the retailer has established with other national brands, including Disney, Ulta Beauty and Levi’s

Target is pulling shoppers away from malls as it begins to open dedicated Apple shops in 17 of its locations starting this month.

New initiative builds on the success the retailer has established with other national brand partners, including Disney, Ulta Beauty and Levi Strauss & Co.

Beauty retailer Ulta and Target forged a similar deal last November. Ulta will open shops in over 100 Target stores in the second half of 2021, with plans to establish even more in the future. Similarly, 25 Disney stores were plotted for Target locations in 2019 and helped the retailer expand its toy profile.

Target to roll out dedicated Apple shops inside 17 locations 

Target - Apple press release

What: the expansion of virtual store technologies

Why it is important: these technologies grew from nice to have to crucial in the customer journey

Machine-A, a concept store in London, has decided to transpose the full store into a virtual experience accessible to anyone, coinciding with the London Fashion Week. The virtual space will allow to discover the new designers, their collections, unfinished pieces and even personal messages. Virtual stores, as explained in our exclusive article and developed also by the likes of Gucci or L’Oréal, are, in addition to being obvious answers when stores are closed, an astute way to make the physical store (and the experience related to it) available 24/7.

Frictionless experience is key, and probably the most difficult to achieve (i.e. allowing the customer to fully stay in the experience even when buying a product, without having to land on another page).

An augmented reality shopping boutique is here 

What: Impressive results for this company. Will it continue to grow?

Why it is important: Covid has served as an accelerator of growth for many online formats. Shopify represents a variant of a growing model offering “retail as a service” (including to brick and mortar stores).

The Canadian e-commerce platform has doubled its sales for the third quarter in a row. However, it warns that it is unlikely to keep up that growth rate through 2021. Shares have tripled in value to give the company a value of almost $ 180 bn. Hundreds of thousands of new sellers adopted Shopify’s services which allow brands to sell directly to customers.

Spending by consumers on the 1.7 m merchants selling through Shopify’s software and services grew to $41.1 bn in the fourth quarter. Net income in the quarter was $ 123.9 m compared to $ 771 000 in the same period the year before.

A representative of Shopify is due to address the IADS CEO meeting in April.

FT Shopify doubles sales for third consecutive quarter 

What: landlords may have to consider repurposing unfilled retail sites for leisure or residential use

Why is it important: the collapse of Debenhams and Arcadia has left the country with 15 million square feet of empty retail space

The collapse of Debenhams and Arcadia has magnified a problem for landlords: what to do with the glut of redundant retail space tainting Britain’s towns?

Neither Boohoo nor Asos, which have picked up Debenhams and Arcadia brands have opted to take on the leases for the shops. That means almost 15 million square feet of space will hit the market in the UK. Debenhams sites will be even harder to fill than the individual units left behind by Arcadia, because of their larger floor space.

Potential new tenants include discount stores B&M and Home Bargains, as well as fashion brands that have performed better during the pandemic, such as Zara, Mike Ashley’s Fraser Group and JD Sports, which last week announced plans to raise almost GBP 500 million as part of an expansion drive. Are also considered leisure and gym activities as well as turning spaces into flats and offices.

As an example, a Coventry shopping centre anchored by a Debenhams was recently sold for GBP 4.9 million. Eight years ago, the mall was valued at GBP 37 million.

What will happen to all of Britain’s empty shops?

What: Walmart is looking for new sources of income beyond retail.

Why it is important: They want to make the most of the “ecosystem” they are building, beyond stores and e-commerce. This is an echo of the notion of “audience” we promote at IADS: each department store should find its own voice, to address the right community. Ultimately, the community of customers is the most important asset and strength.

Walmart is planning to make the most of its audience (150 million unique visitors a day) to diversify beyond retail. This strategy follows what Apple and Amazon have been doing: selling services over products. The success of Walmart + emboldens the retailer to think outside the box: provide healthcare services to its app users, sell the screens in its 4,700 locations as advertising spaces, use its parking lots for events.

The topic will be addressed during our next Cross-Functional meeting scheduled for 26 April 2021, on “new business models, new sources of income”.

Why Walmart is looking to beyond retail for future growth

What: Offering lower rents is not enough to keep duty-free stores open.

Why is it important: The travel industry continues to struggle.

Two major South Korean duty-free operators, Lotte and Shilla, will close their stores at Incheon Airport’s Terminal 1 next month, leaving more empty space at the airport. Both Lotte Duty Free and Shilla Duty Free’s leases expired in August but were extended for an additional six months after new bidders backed out before signing contracts.

Their departure is the latest sign of dwindling fortunes for the aviation and travel industries, which are among those worst hit by the pandemic.

In January last year IIAC began the bidding process for new duty-free store operators, offering lower rents in an attempt to keep shopping at the airport alive. But the airport’s efforts proved insufficient to fend off growing scepticism and uncertainty surrounding duty-free shopping, prompting the search to continue for nearly a year.

Lotte and Shilla close duty-free stores at South Korea’s Incheon Airport 

What: The continuing and growing strength of the convenience format in the county.

Why it is important: Convenience is developing even further as a customer demand. Ubiquitous convenience stores are also shifting to cater to more of their customers’ needs.

According to The Korea Herald, convenience stores in the country outperformed department stores in 2020 for the first time in terms of offline sales. The combined sales of GS25, CU, and 7-Eleven took 31% of total offline sales, up from 29.2% the previous year.

The big three department stores Lotte, Hyundai and Shinsegae, took 28.4%, down from 30.4% the previous year. The rise of convenience stores is largely attributed to the anti-crowd, shop-near-home trend amid the strict social distancing measures put in place to contain covid. Also, convenience stores are selling a wider range of products.

Korea Herald Convenience stores outperform pandemic-hit department stores in 2020

What: outside brands will soon feature on the Mango’s online shop

Why it is important: the pandemic has forced many retailers to reinvent themselves, especially online. In order to differentiate from competition, and in a move to attract more customers, Spanish brand Mango has decided to sell outside labels on its webstore, compatible with the brand’s positioning.

A first deal has been signed with Italian lingerie label Intimissimi, which will be sold on the ecommerce in six countries: Spain, the Netherlands, Germany, the UK, Portugal and France. The objective is to gradually extend the service, to add more product and reinforce the offer.

Following the store closures in 2020, Mango already reviewed its offer to adapt to the situation: it entered the activewear segment, and launched a home decoration line.

Marketplaces are emerging as a convenient solutions during the pandemic, for businesses and for customers. In Canada, Hudson’s Bay Cie is also opening a digital marketplace to extend offer.

Mango to retail third-party labels via its e-shop

Related items:

• Hudson's Bay launches online marketplace
• Can marketplace replace department stores?

What: a support to the education system at a time when schools across UK are closed because of the virus

Why it is important: in a move to serve the community, as well as staying in customers’ review mirror, Marks & Spencer is disclosing resources and teaching topics M&S’s heritage in leading on quality, innovation and service

Created by the M&S Company Archive, the series of free engaging online learning resources are inspired by the group activities and include the history of food, the science behind textiles, the process of designing packaging and delivering for customers as a business. They feature films, printable worksheets and practical tasks such as pitching business ideas or creating food packaging. According to the press release: “As well as offering children the unique opportunity to get a behind-the-scenes insight into working at M&S, the resources aim to support skills in maths, science, art and design, and business studies and have been developed by education experts in collaboration with teachers and home-schooling coordinators”. It is a way for M&S to stay in touch with their customers during the lockdowns, and perhaps also to train future consumers or future employees.

M&S DIPS INTO ITS ARCHIVE TO LAUNCH NEW FREE DIGITAL LEARNING RESOURCES FOR FAMILIES ACROSS THE UK

What: Wittington Investments, the parent company controlled by the Weston family, has committed to supporting the business

Why it is important: lockdowns and removal of tax-free shopping may trigger a GBP 680m write-down

The company has been faced with a devastating drop in tourist flows as well as enforced store closures and is also dealing with the end of the previous tax-free shopping regime for tourists who visit Britain.

Those are the key points to come out of the accounts filing of SHEL Holdings Europe, parent company of the department stores operator (also including Brown Thomas, Arnotts, and De Bijenkorf).

The firm filed its accounts at Companies House covering the year to February 2020 and said that in the year concerned, its revenue rose to GBP 1.522 billion from GBP 1.452 billion. Pre-tax profit fell to GBP 37.8 million from GBP 103.3 million and net profit fell to GBP 31.1 million from GBP 82.2 million. But EBITDA rose to GBP 299 million from GBP 206 million.

But what was more interesting was that it warned of a “severe but plausible” situation in which its UK banking covenants might be breached due to the ongoing coronavirus restrictions.

And while it also said it's confident it would be able to renegotiate these, it also said that Wittington Investments – the ultimate parent company controlled by the Weston family – has committed to supporting the business in the “unlikely event” it can’t successfully renegotiate those covenants.

Fashion Network: Weston family may need to pump cash into Selfridges

Retail Gazette: family behind Selfridges poised to fortify department store

Related item:

• Brexit may kill London as a luxury shopping destination

What: A duty-free hub is taking the share of the lion on the Chinese market

Why it is important: With a tripled duty free allowance, this market is becoming especially attractive to Chinese customers, who might change their purchasing behaviour even when travelling is authorised again.

Hainan Island is China's smallest province but the region where most potential lies, since it is a much-liked touristic spot for Chinese customers unable to travel abroad. Michael Kors is building its 4th store there, Capri group and other luxury companies consider this market to be the only alternative to duty free sales, which are not expected to recover until 2023. This is fuelled even more by the Chinese government, which increased the allowance for duty free purchases to USD 15,500 per person, tripling the amount from last year.

Ralph Lauren, Coach, Estee Lauder look to China’s Hainan Island as US luxury brands ...

What: Sales doubled in 2020 to reach EUR 1,37 billion.

Why it is important: it reflects the consumer’s shift in terms of attractive categories, but also expectations: they want to be enabled with tools and advice, instead of provided a ready-made solution.

ManoMano increased sales by 100% in 2020 to EUR 1,37 billion and claims to have 7 million active customers, and 50 million unique visitors a month. Founded in France and well represented in Southern Europe, ManoMano is now eyeing at the UK.

ManoMano doubles sales in 2020 

What: Luxury retailer launches its Black history month campaign focused on Black futures and Black excellence

Why it is important: how NMG responds to activists’ push for back-owned brands

Through numerous long-standing and new partnerships, Neiman Marcus Group has also announced the achievement of raising and donating $1 million over a three-year period to non-profit organizations that support Black communities across the US.

"Neiman Marcus Group is investing in a strong foundation of educational support, mentoring, and leadership skills, which are all crucial to the success of our communities," said Amber Seikaly, Vice President, ESG and Chief Communications Officer, Neiman Marcus Group.

As part of its three-year partnership with Boys & Girls Clubs of America, Neiman Marcus Group has pledged to continue fundraising in stores throughout February, with the goal to deliver more than $1 million towards the advancement of youth.

NMG has more than a century-long history of philanthropic partnerships within the community. In addition to philanthropic partnerships, NMG will continue to celebrate Black History Month by hosting Nikole Hannah-Jones, a Pulitzer Prize-winning reporter covering racial injustice for The New York Times Magazine. Black-led businesses and designers of brand partners are also highlighted through Neiman Marcus' "Spotlight on Diversity" story on NeimanMarcus.com.

PR: Neiman Marcus honors black history

Related items:

• Nordstrom reaffirms commitment to diversity and inclusion
• Macy’s highlights black brands and creatives
• IADS exclusive: diversity, a strategy of silence

What: a shift in kidswear offering, moving from ‘special occasion’ toward ‘everyday style’

Why it is important: casualwear is the key trend of 2020, and customers are keen for a more relaxed & fun range from M&S Kids

As part of its ongoing shift to everyday clothing, M&S Kidswear is launching a new character range on M&S.com – Mr Men™ Little Miss™. The range is available up to aged seven across daywear, sleepwear, accessories and bedding.

Focusing on everyday kidswear is an important part of M&S’s Never the Same Again programme to offer relevant product for the new consuming habits, now and post-covid. Last month it extended its activewear label Goodmove to men and children.

EVERYDAY STYLE & VALUE FOR THE LITTLE ONES: M&S LAUNCHES NEW CHARACTER RANGE [...]

Related item:

• M&S extends activewear line-up

What: Government help for large German department store group.

Why it is important: The rescue package argues that department stores are indispensable for the life of cities.

The German department store chain Galeria Karstadt Kaufhof has reportedly been offered a subordinated loan from the German government of up to EUR 460 million. The aim is to safeguard jobs and help the hard-hit company through the crisis.

According to the government, department stores also have an important anchoring function in city centres. They are considered indispensable “crowd-pullers” and their disappearance would also jeopardise the existence of many surrounding shops. Some oppose this measure arguing that it distorts competition as well as assuming that city centres cannot exist without department stores.

Several months ago, the company’s creditors agreed to a sweeping rescue plan for Galeria Karstadt Kaufhof by which it closed 40 stores and lost 4000 jobs.

German government supports Galeria Karstadt Kaufhof 

What: a major expansion with the department store adding 50 new brands across fashion and beauty to its portfolio in order to respond to the new trends

Why it is important: consumers lifestyle and habits have dramatically changed this past year, and retailers’ assortments needs to evolve with this shift. The trend for ‘casualisation’ accelerated, with a demand for more comfortable and casual styles

To respond to the new consuming habits of customers, John Lewis will be adding 50 brands across fashion and beauty; for women, men and children. Additions include established brands (such as Mango or New Balance) and emerging, independent and predominantly online brands. The new brands will offer contemporary styles for a casual day working or relaxing from home, as well as athleisure styles as the population has gotten more active since the pandemic. Conscious shopping will also continue to be a priority with new sustainable brands.

John Lewis is not the first retailer to adapt to the new consuming trends (see IADS exclusive on the new consuming habits): this month, Rinascente launched a pop-up store dedicated to sports and fitness in Turin. Kohl’s is also expanding its athleisure and lifestyle offer with a new private label, the launch of a wellness market and a partnership with outdoor brand Eddie Bauer. Target saw excellent results for its athleisure private label All in Motion generated USD 1 billion in its first year.

IADS next Merchandise meeting will focus on Sports & Lifestyle and will take place on 21 April 2021.

JOHN LEWIS BRINGS TOGETHER 50 NEW FASHION AND BEAUTY BRANDS [...]

Related items:

• IADS Exclusive - Adapting to new consuming habits
• Ready-to-Move at Rinascente
• Target's activewear brand generates USD 1 billion in first year
• Kohl's turns to Eddie Bauer as outdoor sales surge
• Kohl’s continues its shift with new Wellness Market
• Kohl’s bets on athleisure; launches new private brand

What: a partnership with resale platform Goodfair to sell vintage clothing online

Why it is important: Nordstrom has set for itself sustainability goals for 2025, and one way to achieve it is through resale. With this partnership with Goodfair, the retailer will drop new items every month; a way to attract younger shopper thanks to the limited-edition collections

Monthly drops initially consist of over 50 vintage items sourced from Goodfair’s supply stream. The majority of pieces are considered true vintage, meaning they were made before 2000 and follow certain guidelines dictated by Nordstrom with some pieces even bearing the “Made in the USA” moniker. The first instalment of the monthly Goodfair shop went live on 28 January, selling out within hours. The vintage picks are merchandised into Nordstrom’s existing website under its Sustainable Style vertical, the department store online shop dedicated to environmentally friendly products launched in 2019.

This is not the first time Nordstrom plays in the resale market: last year it launched See You Tomorrow, a resale pop-up store available online and at the New York flagship store.

Behind Nordstrom’s Online Vintage Shop With Goodfair

Related items:

• Nordstrom launches online curation of sustainable goods and joins G7 Fashion Pact
• Nordstrom launches resale shop
• Nordstrom sets sustainability goals for 2025

What: After acquiring Debenhams, Boohoo takes over the remains of Arcadia Group.

Why it is important: Boohoo has become an opportunistic acquirer of faded brands.

Boohoo has agreed to buy Burton, Dorothy Perkins and Wallis out of administration, marking the final stage in the break-up of Sir Philip Green’s Arcadia Group. The online retailer said it was set to acquire the digital assets and intellectual property of the brands for GBP 25.2 million.

The transaction will lead to the closure of 216 shops across the UK occupied by the three brands which made about GBP 428 million in revenues last year.

John Lyttle, Boohoo’s chief executive, said the deal ensured that the brands’ “heritage is sustained, while our investment aims to transform them into brands that are fit for the current market environment”.

The acquisition of the final parts of Arcadia — after Asos last week announced it would buy Topshop — closes a chapter for UK high streets. When Green in 2002 acquired Arcadia for GBP 850 million, Asos’s revenues were just GBP 4.1 million and Boohoo did not exist.

Boohoo to buy Burton, Dorothy Perkins and Wallis brands for £25m 

What: new wave of lay-off as a result of the impact of the crisis on retail

Why it is important: The pandemic has a significant impact on non-essential retailers which have been facing forced store closures for months, and they are exploring ways to save costs, sometimes at the expense of workers

The permanent lay off of more than 600 workers across Canada represents less than five per cent of the HBC’s total workforce; and the decision was made while nearly half the company's department stores remain temporarily closed. Workers concerned, both part-time and full-time, have worked for the retailer for between 10 and 30 years, predominantly in sales and middle management. "The pandemic continues to have a significant impact on non-essential retailers," said Tiffany Bourre, a spokeswoman. "Due to these circumstances beyond our control, the company has had to make adjustments which have resulted in a reduction in workforce."

Hudson's Bay permanently laying off more than 600 workers across Canada

What: new sustainability standards for denim

Why is it important: sustainability is an essential part of the business for retailers, in terms of processes and in terms of merchandise. By taking a new step toward more sustainability, M&S commits to more transparency and to offer more sustainable solutions for customers, across a timeless and essential category: denim

The three key aspects of Marks & Spencer new sustainability standards are:

• Sourcing: 100% of the cotton used is always responsibly sourced, through the Better Cotton Initiative for the major part
• Washing: thanks to a partnership with Jeanologia -the leader in sustainable finishing technologies– M&S jeans are now made with 86% less water compared to the industry standard
• Dying: the switch toward indigo dyes with cleaner alternatives that are kinder the planet and require less water and chemicals to produce

M&S CLOTHING SETS NEW SUSTAINABLITY STANDARDS FOR DENIM