What: Three major Japanese department store operators saw their sales in the March-November 2020 period drop 30% to 40% year-on-year.

Why it  is important: retailers, and especially department stores, have been hit hard by the covid-19 crisis and many of them are facing serious losses.

The declines in sales are due to both the closure of stores at the peak of the pandemic, and the significant decrease of tourists and foreign travellers in Japan. For the first three quarters of the current business year, operating loss totalled JPY 10.5 billion at Takashimaya Co., JPY 7.0 billion at Sogo & Seibu and JPY 3.2 billion at Matsuya Co.

J. Front Retaining Co., which operates Daimaru and Matsuzakaya stores, however secured an operating profit of JPY 1.8 billion in the period, helped by cost-cutting efforts and steady real estate business.

Four major Japanese department stores suffer sales drops of 30%-40%

What: Harvey Nichols has promoted Manju Malhotra to the role of CEO, reporting to Sir Dickson Pool.

Why it is important: Contrary to John Lewis, Harvey Nichols bets on its own veterans.

Manju Malhotra has been with Harvey Nichols since 2003, where she held various positions in finance until being appointed CFO in 2010 and COO in 2018. She is replacing Stacey Cartwright who let the position in 2018, and will oversee UK, international and online businesses.

Harvey Nichols Promotes Manju Malhotra to Chief Executive Officer – WWD

What: the launch of a new category through a pop-up dedicated to sexual wellness featuring inclusive lingerie and sextoys.

Why it is important: in April 2020, sexual wellness brands saw sales spike during lockdowns, as people were looking for ways to take care of themselves. Nordstrom follows up on that trend and launches a new sexual wellness category through their latest pop-up:  Pop-In@Nordstrom Self Love.

The pop-up features lingerie and loungewear brands with a focus on inclusive sizing and shades, sustainable fabrics and ethical production. The taboo-free curation of products also features jewellery, personal care and sextoys.

Nordstrom's Vice President of Creative Projects Olivia Kim said: "We wanted to take a different approach to the idea of wellbeing, whether it’s about looking good or feeling good, self-care, empowerment, and love are at the heart of our latest Pop-In@Nordstrom." "I’m excited to bring our customers a modern, bold, and inclusive shopping experience designed to destigmatize pleasure and leave our customers feeling strong, confident, comfortable, and non-apologetic about self-love,” she added.

The Self Love Pop-Inwill run from 15 January to 14 March in selected stores and online.

NORDSTROM’S SEXUAL WELLNESS CATEGORY LAUNCHES WITH VIBRATORS, LINGERIE, AND MORE

Link to website: Pop-In@Nordstrom Self Love website

Related item:

• Sexual wellness brands see sales spike during lockdowns.

What: Alibaba fined for forcing department store InTime to exclusively use its e-commerce platform.

Why it is important: This move is part of a larger probe with political origins, however, it seriously questions Alibaba’s omnichannel strategy

Alibaba has been fined USD 76.464 due to monopolistic practices with department stores Intime, which it acquired between 2014 and 2017 for more than USD 3,3 bn. By forcing the 27-large department stores chain to exclusively use Alibaba for e-commerce and live streaming operations, Alibaba was considered faulty by Chinese Authorities. Since this was a key point of the e-commerce giant to acquire the department store chain, these questions, in the long run, the relevance of this strategy.

Alibaba hit with anti-monopoly probe in China 

What: A strong Christmas season for the UK retailer.

Why is it important: John Lewis’ omnichannel strategy proved resilient during lockdowns, leading to a better performance than the competition during Christmas, and the anticipation of a better financial year than previously announced.

John Lewis is a leading department store when it comes to e-commerce. Pre-pandemic, it was already achieving GBP 2 of every GBP 5P of sales through e-commerce, and during the pandemic, GBP 7 out of each GBP 10 was performed online. This sales structure (noting that click and collect is not anymore available at department stores, to limit costs) allowed John Lewis to raise its expectation for the full financial year results, to be announced in March.

The Christmas performance also allowed the retailer to repay in advance a loan of GBP 300 million, which adds up to a strategic savings plan that was already made concrete by the closure of 8 department stores in 2020 and reduction of HQ expenses by GBP 300 million (amounting to 3,000 redundancies).

John Lewis repays £300m Covid funding and raises FY guidance 

What: the acquisition of the UK bankrupt department store

Why it is important: Debenhams filed for administration in April 2020 and started liquidating stores in December 2020. After announcing that some stores would permanently shut, the retailer has been bought by UK retail group Boohoo

Boohoo is acquiring the Debenhams brands, its fashion sub-brands (such as Mantaray and Principles), and its websites for GBP 55 million. Retail stores, stock and financial services are not included in the deal. The closing down sale will continue in stores (when allowed to reopen following the government guidelines) and once the stock is liquidated all the UK stores will be permanently closed. Which means that thousands of jobs should be lost.

The acquisition is the opportunity for Boohoo to expand into beauty and homewares, and extend its brand offering. It plans to “rebuild and relaunch the Debenhams [established online] platform […]” in order to operate a giant online marketplace, which will also support the group’s other labels including Pretty Little Things, Nasty Gal, Oasis, and more.

According to Debenhams' press release, the deal does not affect Danish department store Magasin du Nord, which continues to operate independently.

PR: boohoo to acquire certain assets of Debenhams UK [...]

FN: Boohoo buys Debenhams for £55m, marks big move into beauty, home

FT: Boohoo set to acquire Debenhams brand

What: the search for a new CEO at US chain JCPenney

Why it is important: JCPenney has been saved from bankruptcy and purchased by real estate giants Brookfield Asset Management Inc. and Simon Property Group last November. Now former CEO Jill Soltau has exited the company, and Chief Investment Officer of Simon Property Group Stanley Shashoua is acting as interim ceo since 1 January

The owners also said a temporary office of the ceo, to include key members of Penney’s current leadership team, will be established. Soltau has had an extensive career in retailing and worked within Kohl’s and Sears before joining JCPenney in October 2018.

J.C. Penney Seeks New CEO

Related item:

• JC Penney exits bankruptcy

What: a new rental option for a retail giant

Why it is important: in a bid to support a difficult market (kidswear) and to offer sustainable options to customers, H&M is turning to rental fashion, a sustainable and economical trend that has been expanding over the past few years

Through a partnership with Amsterdam-based online shop and clothing subscription Circos, H&M’s Arket label will start offering items from its children’s collection for rent. The monthly Circos subscription is available to European customers, and rented clothes can be kept and used for as long as they fit and returned when it’s time to size up or update the wardrobe for a new season. Several families will share and enjoy the same piece of clothing, and once the product wears out, the materials are repurposed to make new products. Rental clothing is a way to respond to the sustainability demands from customers, especially in the kidswear market where you cannot hold on for so long to a pieces as children never stop growing.

ARKET starts renting out childrenswear to encourage reuse and re-wear

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What: a second location for Macy’s newest concept “Market by Macy’s” launched last year.

Why it is important: department stores have been declining and in need of reinvention, even before the covid crisis. Last year Macy’s launched a new model, smaller than traditional spaces, with a major focus on community -a trend that has been strengthened by the pandemic

The Market by Macy’s is a community-centric, flexible retail store format with community-driven events. Following the opening of a first outpost in Texas in February 2020, Macy’s said it has “maximized learnings from the initial Market by Macy’s national debut to create a scalable store format” for the second outpost, also located in Texas. The store features items across fashion, beauty, home and gifts; it is a selected assortment of what’s available at full-line Macy’s stores.

Since the pandemic, big retailers such as department stores have been suffering from the loss of clients (Macy's is actually reducing is department store network), while the demand for community and local retail has been increasing (read about it in our exclusive article: The Rebirth of Local Retail) and retailers have been rethinking their models in order to cater to their local customers.

Macy’s is not the first retailer to develop local concepts: Nordstrom launched its Nordstrom Local concept in 2017 and continues to expand it; not to mention Neighborhood Goods, a “new type of department store” that offer a curated ever-rotating assortment based on the local-community needs  Sports retailers Nike and Foot Locker both recently launched community-centric concept: Nike Unite and Foot Locker Community Power Store.

Macy’s Latest Format Gets a Second Site 

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• IADS White Paper: “Global pandemic, local department stores”
• Macy’s reducing its network by 45 stores

What: Working from home is not new.

Why is it important: We need to look closely and imaginatively at the advantages and disadvantages of remote work, and we can use some lessons from history to do so.

Contrary to first reactions as companies around the world went into lockdown and instituted remote working schemes, working from home used to be the norm until the early 20th century in today’s industrial countries. The Economist looks at remote working from a historical perspective. In spite of the abuses and hardships involved, it also allowed workers control over time.

The beginning of factories (and offices) around the 1800s increased the time spent at work and crucially allowed employers to control workers’ time. On the other hand, the development of the factory system also allowed workers to join together in trade unions to demand higher wages for their higher productivity. Wages were some 10-20% higher in factories.

How permanent is the shift to remote working from home today? And will it have the same far-reaching consequences as the shift away from home had in the process of industrialisation?

Home-working had its advantages

What: the opening of a space dedicated to the musical universe

Why it is important: following Printemps Group announcement to close three Citadium stores, the Haussmann flagship has been undergoing major changes. It started with a review of the assortment in order to become a genderless store, and is followed with the opening of an new event space. Retailers, and department stores, have suffered from the covid crisis and need to find new ways to attract customers instore; hosing events is an option.

The Citadium Studio is located on the store’s 1st floor, and hosts talks, programs, mini-concerts and signing sessions. Citadium has joined forces with four entities that operate in the world of urban music, namely Ptit Délire TV (youtubeur), Rinse France (radio), Hotel Radio Paris (radio) and Wave (media). The cultural place hosts various events from Wednesdays to Sundays (except Fridays), and a sales area features t-shirts and vinyls as well as hi-fi equipment. The events are broadcast live on the store screens, as well as on the merchant site.

Le Citadium Haussmann ouvre un espace événementiel dédié à la musique

Citadium Haussmann opens an event space dedicated to music

Related item:

• Printemps closes stores

What: the revamp of the private label Xersion, ahead of the launch of new private brands in 2021.

Why is it important: the re-launch follows the repositioning of JCPenney and the launch of other private labels last year including its Stylus apparel and Linden Street home brands. It is also a strategic move to rebrand its activewear line as the demand for athleisure and comfort clothing has skyrocketed since the pandemic.

Initially launched in 2008, Xersion activewear assortment is now redesigned from the inside out with Penney’s new innovative and exclusive EVERAIR™ fabrication, a quick dry, breathable technology. The size-inclusive line is available at all JCP stores and online, and caters to men, women and children, regardless of the fitness level.

JCPenney has been saved from bankruptcy in November 2020 and is now repositioning itself under new ownership. It’s not the first retailer to rethink its assortment: this month UK Marks & Spencer extended its existing women activewear line Goodmove to cater to men and children also. Last October US competitor Kohl’s launched new athleisure private label dubbed FLX.

JCPenney Reinvents Xersion® Activewear Brand 

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What: a series of pre-emptive moves from Lotte Duty Free in Vietnam to anticipate the travel demand recovery.

Why it is important: by teaming up with the Vietnamese leader and proposing new payment services, Lotte is significantly expanding its footprint on a fast-growing market.

Lotte Duty Free, which already operates 3 stores and building another one, just announced its partnership with IPPG, the leader on the market with 70% market share, to open the fifth location in the oldest mall in Hanoi, the Trang Tien Plaza. This move is made in expectation of a travel demand surge during the second semester of 2021. In order to be completely on par with market’s expectations, Lotte also launched an e-wallet payment service, a premiere for a Korean retailer. E-wallets are highly popular in Vietnam, as they are used by 21% of customers.

Lotte Duty Free launches Vietnamese e-wallet payment services

Lotte Duty Free signs agreement with IPPG to open downtown store in Hanoi next year

What: Globus announced to Press its intention to maintain its CHF 300 million investment plan in spite of the difficulties created by 2020 and the pandemic.

Why it is important: Globus was acquired by Central Group and Signa in Feb 2020, showing the investors’ support in spite of the context, significantly degraded since then.

Franco Savastano, Globus CEO, declared to press that the CHF 300 million investment plan that was in the pipe will remain maintained, with a clear focus on store renovations (Zurich in March 2021, followed by Geneva and Basel in 2022) and e-commerce. Globus is clearly aiming at positioning itself as a luxury destination, and reports an increase of 50% in e-commerce sales, from 10 to 15% of total contribution.

Globus confirme son intention d'investir 300 millions et de maintenir ses sites 

What: a major gain for Qatar Investment Authority.

Why it is important: the owner of luxury department store Harrods sold its shares in Tiffany & Co as part of LVMH’s acquisition of the U.S. jeweller.

QIA had acquired a 5.2% stake in Tiffany & Co in late 2011 and had since then increased its stake up to 9.3%. QIA made a gain of around USD 892 million, as part of LVMH’s $15.8 billion acquisition of Tiffany & Co. “It represents a very good return for a listed equity in any environment,” said Diego López, Global SWF managing director.

Harrods Owner Nets $892 Million Gain From Tiffany & Co Sale

What: the redesign of the Belgium department store chain

Why it is important: The renovation is part of a strategic relaunch programme, in which the retailer wants to focus more on a premium positioning

The Belgian division of Galeria Karstadt Kaufhof has planned to renew its 16 stores across Belgium in order to focus more on a premium positioning. The retailer will also open an online marketplace this year and plans to partner with new and key players, especially in the food sector. The change should take place over the next three years.

A first store, in Schoten near Antwerp, has already been remodeled -read the article below for the details.

Galeria Inno department stores get extreme makeover

What: the reopening of a bankrupt US department store.

Why it is important: Barneys New York filed for bankruptcy last year. After being bought out it will be reopening small outposts, including one inside an existing department store.

Department store Barneys New York has reopened inside Saks Fifth Avenue’s flagship store in NYC, occupying the entire 5000sqm fifth floor with a large area devoted to pop-up shops for emerging designers. “We’re bringing Barneys to Saks in a way that’s relevant to today’s luxury consumer and focused on discovery, the unexpected, and fun.

Barneys at Saks is an extension of our current offering, with established and emerging designers. It’s an extension of what we always do,” said Tracy Margolies, chief merchant of Saks. The move is part of Saks’ elevation strategy to offer customers the best choices in fashion; which comes complementing the renovation of Saks flagship floors.

For the relaunch at Saks, Barneys will display contemporary and designer men’s and women’s collections, accessories and denim - marking the first time men’s and women’s labels are merchandised on the same floor. The assortment includes exclusive brands and labels available at Saks for the first time.

A second Barneys at Saks store will open later this month in Greenwich. The two-storey store will feature men’s shoes and accessories, and women’s fashion.

The services provided by Barneys at Saks include “VIP” private dressing suites, prepared by Saks associates with merchandise and refreshments; virtual shopping tours of the Barneys space with style advisers via video conferencing technology, so people can shop from home, and same-day delivery in Manhattan and Greenwich.

Barneys at Saks: Resurrecting a Luxury Legend

Related item:

• Barneys New York to reopen at Saks

What: WWD reports GDP rose 2.3% in 2020, but retail sales contracted -3,9% although they grew +4.6% on Q4.

Why it is important: The overall V shape recovery is fragile, although IADS member SKP posted record sales on 2020 as a whole.

The 2020 GDP growth for China is 2.3%, the lowest in 40 years, and retail sales amounted to USD 6.05 trillion, -3,9% compared to LY. Interestingly, online sales represent a quarter of total sales, from 4% last year. GDP forecast for 2021 is estimated between 7.1 and 7.9%. The equilibrium of the recovery is still fragile, at a moment when CNY is approaching and some clusters have been spotted in Heibei, Heilongjiang and Jilin, leading to massive lockdown responses in order to circumvent the danger.

China Full Year GDP Rose 2.3%, Retail Sales Contract 

What: another acquisition for the UK retail group

Why it is important: Frasers Group has been making many purchases across the retail scene lately, extending its footprints both in UK and worldwide.

The purchase of Psyche include a 3700 sqm multi-brand store and a webstore, featuring high-end brands such as Barbour, Belstaff and Boss.

The operations have been affected by lockdown-driven closures, and the sale to Frasers Group helps to face the huge pressure the sector is under.

Former Psyche boss Steve Cochrane, who run the business for 38 years, will become CEO of the store. He said it will carry out an appraisal over the next six to 12 months to decide "where Psyche fits into its retail offer. We sit between Flannels and House of Fraser with the brands we sell. Hopefully there will be a space for us."

Read IADS exclusive case study on Frasers Group to learn more on the business and on the group’s ambition.

Mike Ashley's Frasers Group buys Psyche

Frasers buys Psyche, founder to stay at helm

Related items:

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What:  A talk from Marc Metrick at the CEO summit

Why it is important: a strong message in favour of sticking to what is done best by department stores and see how to improve it

Marc Metrick dismissed the idea to adapt the offer to the situation (by, for instance, selling essential products) by reminding that Saks Fifth Avenue is all about fashion. With this clear message in mind, he advocates for the implementation of Buy now Wear now, a heated debate that started 4 years ago between retailers and brands, in order to sell the right product to the right customer at the right moment. For him, it is time to get rid of this disconnection between seasons and customers.

Marc Metrick on Luxury Disrupted, Remaking the Matrix and Buy-Now-Wear-Now

What: a live event conducted on 18 December for the first-ever shoppable live-stream event

Why it is important: it is the first time that a major retailer, and not a brand, is making a significant move on this social media platform; a move comparable to what is now common practice in China with other platforms

Walmart launched on 18 December a one hour live event, during which viewers were able to purchase what Walmart was showcasing on Tiktok. It is a way, for Tiktok, part of the Facebook Group, to explore further shoppable social media, while, for Walmart, a test-drive for potential new retail events in the future.

Walmart is launching on Tiktok

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What: The Webster is to open a first store outside the U.S.

Why it is important: The model thrives with developing the relationship with customers.

The Webster plans to open its first store outside the U.S. – and eighth overall – in Toronto next summer, signalling that customer service-oriented, multi-brand boutiques can escape the downturn facing other parts of the wholesale and bricks-and-mortar sector. It is expected to see sales grow between 10% and 20% year-over-year in 2020, and September marked the most successful sales month in the history of the company, despite the lack of tourists and downturn in spending this year.

Owner Laure Hériard Dubreuil attributes that success to the company’s close relationships with luxury shoppers, who are catered to by The Webster’s private client team. “I am definitely not in the chase of recruiting clients, recruiting clients, recruiting clients, and all the massive investments that have to do with that”. “I’m more into developing relationships, building relationships, building trust, building a curated assortment, building wardrobes”, she said.

The Webster to Open First Store Outside the US

What: a sold-out for the department store star product

Why it is important: the critical situation has had terrible consequences on retail, but there are some silver linings as some products sell better than ever to ensure a semblance of festive Christmas

Famous for its luxury hampers, British Fortnum & Mason may is running out of its popular picnic backets as there was an unprecedented demand from shoppers sending gifts to loved ones they won’t see due to the covid-19 restrictions. There was an earlier order for presents and hampers this year as customers want to ensure a delivery in-time for the Holidays, as needs for courier have increased across the country.

“It’s not surprising that more people are spreading Christmas cheer in that way. But we have also seen more demand for hampers for self-consumption this year as they seek to make the most of their own festive period,” outgoing chief executive Ewan Venters said.

Fortnum & Mason hampers running out: “demand this year has been unlike any other”

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