What: The company collected almost USD 50 million in rent and close to USD 100 million from its attractions, among other revenue sources, but incurred more than  USD 230 million in expenses according to its filing with the Municipal Securities Rulemaking Board.

Why it is important: The ongoing pandemic continues to affect customer behaviour, supply chains, and the economy which has led the The American Dream mall to lose close to USD 60 million last year.

American Dream lost USD 60M last year

What: The Saks “ecosystem” of dot-com and stores is sustaining momentum as their assortments grow, diversify and capitalize on a pickup in women’s luxury fashion sales.

Why is it important: Sales at Saks.com, on a gross merchandising value basis for the first quarter of fiscal 2022, increased by 69% compared to the “strong” first quarter of 2021. On a two-year basis, GMV was up by 107%.

The Saks Fifth Avenue “ecosystem,” (Saks.com and the Saks Fifth Avenue stores) GMV was up 50% compared to the first quarter of 2019.

By diversifying the business model, Saks can more quickly add categories and brands it previously did not sell and expand those where it sees opportunities.

Women’s fashion is back in a big way. Respondents shared that they are spending more time in the office, and shopping for both travel and events. Furthermore, across the Saks Fifth Avenue combined digital and physical ecosystem, there is an ongoing appetite for luxury fashion; as such, women’s ready-to-wear, particularly dresses, and accessories were top-performing categories in the first quarter.

Saks is putting in place several initiatives to further customer service and personalization and an array of recent events and experiences to engage customers, including a post-purchase “ambassador” service program for higher-spending customers, a 360-degree campaign featuring Academy Award-winning actress Lupita Nyong’o, and a New York Fashion Week dinner at L’Avenue at Saks.

Saks’ Women’s Fashion is back in a big way

What: Pride + Joy take center stage as Macy’s kicks off National Pride Month and honors the contributions of the LGBTQ community.

Why is it important: In support of the company’s mission to build a brighter future with bold representation, Macy’s will launch its round-up and donation campaign in stores and online at macys.com to benefit its longtime partner The Trevor Project.

Macy’s will also recognize Pride with exclusive merchandise available at select stores, on macys.com and its app, bring joy to local community Pride parades in select markets nationwide, highlight LGBTQ-owned brands and host special events at select stores.

Macy’s honors Pride month

What: Target announced a series of leadership shifts by elevating its chief supply chain and logistics officer to the leadership team.

Why it is important: The retailer claims that the updates being made to the C-Suite reflect the size and scale of the USD 100 billion business while positioning the company for continued momentum into the future.

The retailer admitted that it will be much more difficult to generate growth in the coming years, but the focus is now on guest experience where customer friction and frustrations need to be minimized and delight needs to be amplified.

Target focuses on customer experience, supply chain in latest leadership shuffle

What: Nordstrom will be closing its personalised clothing service and will instead focus its efforts on e-commerce styling

Why is it important: Subscription box service models have recently been questioned. Nordstrom acquired Trunk Club back in 2014, for a reported USD350 million. The startup was created during the initial wave of subscription box services, where stylists would ship clothing to customers once they had fashion consultations.

Nordstrom bought the business to update its personal styling but failed to make Trunk Club profitable. In 2016, Nordstrom took a USD197 million write-down on the business.

Over the years, Nordstrom expanded Trunk Club into womenswear and also opened retail locations, but shuttered Trunk Club stores back in 2020.

Nordstrom to close the Trunk Club

What: Fashion companies are looking to build their own resale channels, giving rise to a new class of B2B start-ups that aim to help them navigate the nascent industry.

Why is it important: Resale, once dismissed by brands as an engine for counterfeits has now become a rapidly growing part of mainstream e-commerce. The US secondhand fashion market is slated to reach USD57 billion by 2025. In 2020, resale accounted for 10% of all US retail sales, up from 5% in 2016. In the past decade, the bulk of this market has been dominated by third-party giants like The RealReal, ThredUp, and Poshmark. But, as the space continues to expand, brands themselves are looking to control the customer journey in the pre-owned realm.

This trend has given rise to a flurry of resale-as-service platforms that handle the backend process of a brand’s owned resale business, which includes inventory collection, verification, and ultimately, sale. Some of the category’s newest entrants include Lululemon, Net-A-Porter, and Hugo Boss, working with RaaS firms such as Trove, Reflaunt, and Faume.

For brands, resale isn’t necessarily a revenue driver but about being part of a consumer experience that’s happening with or without them. While retailers are betting it may eventually become a profitable part of their models, most are focused currently on resale’s potential for driving customer acquisition and loyalty.

Brands are racing into resale

What: Coresight reviews the reasons why the horizon is not bright for mass-market retailers.

Why it is important: Department Stores should take notice and focus on two parallel strategies, the first one being to nurture luxury and less price-conscious customers, and the second one being to review the assortment for the most price-conscious ones, in order to compensate by volumes the margin that will not be achieved otherwise.

Deborah Weinswig, the editor in chief of Coresight, reviews the current situation in the US, as most retailers have noted that customers passed up higher-margin and big-ticket items (home furnishing, apparel) in favor of essential or low-margin items (groceries, beauty). This is mainly due to the rising inflation and affecting mostly low and modest incomes, as luxury retailers (Nordstrom) appear to be unaffected so far.

On a worldwide basis, the situation in China is complicated as retail has been hit by the Covid lockdowns in Beijing and Shanghai, and this adds up to the renewal of trade barriers and fears of a global food shortage.

As a consequence, Weinswig expects that mass-market retailers might keep on suffering for the next year or so.

The current market might favour smaller tickets and margin products 

What: Flannels is doubling down on its partnership policy: after the Barry’s gym club, a ESHO clinic.

Why it is important: The partnerships are especially well chosen when it comes to targeting a specific demographic or customer.

Flannels has made a partnership with ESHO, a DTC cosmetic brand launched in 2021 renonwed for its non-injectable treatments for lips, to open a social media ready clinic with live streaming screen which will transmit to the shop, a Hydrafacial bespoke suit, a champagne recovery room for non-injectable customers, and customers will also have the possibility to buy in person the products, which is a premiere.

The Flannels store in Liverpool will span over 12,000 square meters and will also include two restaurants and a roof top.

Flannels to open a cosmeceutical space in partnership in its new Liverpool store 

What: Online retailers have competed to offer cheaper, more convenient shopping experiences but one of the world’s biggest apparel sellers may stop the trend.

Why is it important: Zara had earlier this month begun charging UK customers GBP1.95 to return online purchases by mail. The policy, in place in 37 other countries, doesn’t apply to online orders returned in stores.

Many shoppers took to social media to complain. Some talked about long queues and slow service when they attempted to bring items back to Zara’s stores. Others argued that Zara should improve its sizing and fits if they were going to charge for returns. A few applauded the new policy, saying it would nudge consumers toward more mindful consumption habits.

The environmental case for Zara’s switch is iffy as a delivery van picking up multiple returns will likely generate fewer emissions than individual customers driving to stores to avoid the fee

Online shopping, which boomed over the pandemic, has a much higher rate of customer returns than in-store purchases. Shipping and processing returned items create mounting logistical costs, as well as carbon emissions. However, many shoppers have become accustomed to free and easy returns.

Cutting overproduction, or the volume of clothes discounted at end of season, from 40% to 30% every year could save 158 million tonnes of carbon emissions. While reducing an e-commerce return rate from 35% to 15%, could save 12 million tonnes of greenhouse gas emissions per year.

Regardless, charging for online returns will no doubt reduce the number of orders sent back. Incentivising in-store returns, which immediately puts products back in circulation, can also prevent waste.

Other tactics include improving product pages and virtual sizing technology, or letting customers know about fit and styling advice if they start to add multiple sizes of the same item to their online cart. Some retailers offer repair and alteration services, hoping some minor adjustments to fit will ward off some returns.

Are free returns coming to an end?

What: A luxury store is not only for shopping anymore, but can also involve dining, drinking, having a cultural experience, or showing off on social media.

Why is it important: Social media and pop culture increasingly turned luxury brands into key signals that “you are living your life well.” This desire to spend time with the brand coincides with the need to sustain and increase the traffic in the stores. For large brands, the increase in productivity of existing stores has become as important as opening stores and it starts with generating additional traffic.

Flagships are key places to host the most exclusive clients, who need more than amazing products and a VIP salon but experiences that will make the moment memorable. The “right” experiential feature is the alchemy of a specific narrative that both fits the brand DNA, and the flair of the specific store location, as it creates the sense of cultural depth that makes for a truly satisfying lifestyle experience. Cafés, art galleries, concerts, barbers, clubs, and experiences that are meant to be relived several times are recommended.

Experiential flagships are the next big thing

What: The Neiman Marcus Group communicates on its social and environmental commitments, as an illustration of its ability to reinvent itself through employees empowering.

Why it is important:  The group has released its first ever ESG report in March 2022, confirming that sustainability and social commitments are now must haves for all retailers.

The Business of Fashion makes an extensive coverage on how Neiman Marcus is nurturing a growth mindset within its organisation, to make sure that the USD $600mn investment planned in technological, store and supply chain areas will be exploited at its fullest potential by the teams. This involves:

• The adoption of Farfetch’s technologies to power the Bergdorf Goodman website and app (following an investment of USD $200mn made by Farfetch into the group). This also involves upskilling employees to make sure they use the in-house digital tools,
• A focus on sustainability and social commitment, through a majority women-led leading team and the use of ESG KPIs in daily operations. The company has released its first ever ESG report in March 2022.

Geoffroy van Raemdonck, the CEO, has formalized this mindset under the name “the NMG Way”, based on 5 pillars: be bold, be memorable, be trustworthy, be all heart and be the best. He also encourages what he calls “micro-ideas”, i.e. making sure that everyone in the teams has the possibility to voice new ideas and put them into action.

Digital and cultural transformation at Neiman Marcus Group 

What: M&S has just launched on Europe-wide premium activewear site The Sports Edit, where it will sit alongside more than 50 brands on the platform.

Why is it important: Since the launch of Goodmove in 2020, M&S said it has become the UK market leader for full-price sales in the women’s activewear category selling 1.6 million Goodmove items annually.

The Sports Edit will offer Goodmove’s best-selling womenswear products including the ‘Go Move’ “squat-proof” leggings in a variety of styles and colours, which M&S claims it sells 5,000 in black every month, as well as the Extra High Impact sports bra.

M&S Goodmove makes Sports Edit debut

What: Neiman Marcus is establishing regional "corporate hubs" but will still maintain a significant corporate presence in Dallas.

Why is it important: The majority of the NMG corporate workers will remain in Dallas, though hubs are being established in New York City, as well as in Bangalore, India, where NGM has its shared services functions, and elsewhere.

In Dallas, NMG is expected to receive USD5 million in incentives to open a corporate hub in Tower at Cityplace on North Central Expressway just north of downtown.

However, the luxury retailer will maintain its three levels of office space at the downtown Dallas Neiman Marcus store.

NMG’s leadership team meets physically at a different store around the country every month. For example, the team met last week in Florida, at the Bal Harbour store, as well as at the Coral Gables unit.

Neiman Marcus decentralizes

What: The Wangfujing Group is set to spend USD134 million to buy the outlet business outright, paying USD24 million in cash and assuming USD116 million due in shareholder debt and interest.

Why is it important: The Hainan Outlets Tourism Development business was listed for sale by its former owner Juyuan Xincheng, , after suffering a loss of USD4.5 million last year on a turnover of about $USD10 million.

The investment marks Wangfujing Group’s entry into the travel retail and duty-free sector. The company was granted a duty-free licence in June 2020 but has yet to use it.

China’s Wangfujing Group acquires Hainan Outlets Tourism Development

What: Galeria is strengthening its team in order to accelerate the Covid-19 recuperation.

Why it is important: Galeria is turning back to former talents in order to steer the changes within the company.

Olivier Van den Bossche is leaving the Dutch cosmetics player Rituals where he was COO, to join Galeria as the Managing Director Sales for the group. Van den Bossche had already been CEO of Inno (part of the group) from 2014 to 2017, and then of Galeria Kaufhof from 2014 to 2017, prior to the merger with Karstadt in 2018.

The current Sales Director, Engelbert Thulfaut, will be dedicated to the store concept, while a new head of e-commerce, Michael Drexler, has been recruited to launch the webshop during the summer 2022.

Changes at Galeria management 

What: In a pop-up format, Nordstrom Local will occupy an 850-square-foot site in Southampton, from Memorial Day weekend to Labor Day weekend.

Why is it important: The pop-up will provide pickups of online orders made on nordstrom.com and nordstromrack.com, returns, alterations, fashion advice from a stylist and gift wrap, and take-in used clothing and shoes for donations to Housing Works, and empty beauty packaging for recycling.

The ‘Closer to You’ strategy leverages the physical assets of Nordstrom’s full-line department stores, Nordstrom Rack, and Nordstrom Local to increase services, conveniences, merchandise choices, and speed deliveries. For example, shoppers can return items bought online or at Nordstrom department stores to a Rack or Nordstrom Local location, which may be closer to them. Nordstrom sees the strategy as strengthening customer engagement and the company’s customer-centric culture.

Nordstrom Local pops up in the Hamptons

What: EBay is opening a pop-up store dedicated to sneakers on Fairfax Avenue in Los Angeles.

Why is it important: “Wear ’Em Out Store,” offers lower pricing for customers who wear purchases out of the store.

EBay previewed the Wear ’Em Out Store’s inventory at the Sneaker Con in Anaheim, California, and has collaborated with rapper Offset to help curate the offering.

The store is set to open for the duration of the Memorial Day weekend, from May 27 through May 29.

EBay to open sneaker pop-up 

What: The electronics retailer is adding electric transportation, outdoor living, and health and wellness products to its in-store assortment.

Why it is important: Best Buy is moving beyond its core product offerings with this latest assortment expansion.

Following the acquisition of Yardbird in November 2021, which signaled the retailers pivot away from inside living spaces, Best Buy has partnered with Traeger, Weber and Ooni to showcase cooking and grilling products in stores.

Best Buy also kicked off its electronic transportation push last year as it started selling products like bikes, mopeds and scooters online featuring brands such as Super73, Unagi and Segway-Ninebot. Now this category will also be offered in stores.

As mentioned in the 2nd IADS CEO Exchange of 2022 with former Best Buy CEO Hubert Joly, in March 2021, the Best Buy teamed up with Apple to release health and safety tools for elderly consumers via the Apple Watch. Best Buy acquired Current Health, a home care technology platform, last October for an undisclosed sum, which came about three years after its acquisition of connected health and emergency response provider GreatCall.

Best Buy has also expanded its skincare technology assortment from brands like Foreo, Vanity Planet and PMD Beauty to nearly 300 stores, including electric facial cleansers and products that use LED light therapy.

Best Buy expands in-store assortment of beauty and e-transportation products

What: European shopping malls are rebranding to become closer to their customers.

Why it is important: Working out the retail branding is key to create awareness, generate trust and drive traffic.

Unibail Rodamco Westfield, owner of Westfield shopping malls, is rebranding 3 flagship destinations in Spain (Parquesure, Madrid), Sweden (Taby Centrum, Stockholm) and Poland (Galeria Mokotow, Warsaw). The goal is to drive new revenue through media advertising and brand experiences across its destinations.

It is also a way to catch two birds with one stones: make the most of the resilient European market, and also position these malls as local, an increasingly valued feature by end customers.

Westfield rebrands three European malls 

What: Kohl’s is reinvesting in its four-wall footprint and trying to modernize it.

Why is it important: Kohl’s is accelerating the opening of smaller store formats that have successfully been piloted; introducing what it calls “zones” for diverse, female-owned and emerging brands; testing self-serve return drop-offs; testing self-checkout, and reflowing key active and casual brands such as Calvin Klein, Draper James RSVP and Under Armour, in proximity to the in-store Sephora shops for better exposure.

They are also continuing to roll out self-serve stations for picking up online orders and already offer the ability to drive up and pick up packages and make Amazon returns.

Kohl’s said its new zones for diverse and female-owned companies will provide an element of “discovery” to its stores. It will also offer some differentiation from the preponderance of major national brands and private brands.

Kohl’s self-serve buy online, pick up in-store service will by the end of the year be available in all stores. Self-serve returns are being tested in over 100 stores, but there are more planned through the next 18 months. The self-return experience is unique to Kohl’s, offering a simple in-store drop-off process.

Kohl’s doubles down on store experience

What: Dillard’s reported that total retail sales (excluding the company’s construction business) rose 22% to USD1.6 billion, with store comps up 23% year over year.

Why is it important: Retail gross margin expanded to 47.3% of sales, a record high, from 42.6% a year ago, per a company press release. The strongest categories were men’s apparel and accessories, women’s apparel, and junior’s apparel.

Net income rose 59% year over year to USD251.1 million. Dillard’s ended the quarter with USD862 million in cash after the share repurchases.

Dillard’s apparel sales strengthen Q1 revenue and margins

What: Alannah Weston, chairman of Selfridges Group, is moving on after nearly 20 years of family ownership.

Why it is important: Weston’s late father Galen Weston purchased the store in 2003. Last year, the Weston family sold the store to Thailand’s Central Group and Austria’s Signa. Alannah Weston will be taking a break before working on her environmentally focused projects.

Selfridges’ chairman is leaving the company 

What: As Shanghai and other Chinese cities continue their weeks-long lockdowns, fashion and beauty brands are having to adapt the way they do business.

Why is it important: From Hong Kong to Shenzhen and Shanghai, businesses in cities that play a key role in the fashion economy have been halted or hampered by the pandemic one after the other.

Shenzhen, along with Beijing, Shanghai, and Hong Kong, has formed the front rank of China’s fashion industry, becoming an important symbol and contributing to the improvement of the country’s fashion image on the global stage, marking its progress toward becoming comparable to Europe and America. Meanwhile, Shanghai, as the city with the country’s largest economic output, is the window of Chinese fashion to the world and the center of the supply chain for the domestic market.

At this critical moment, fashion companies headquartered in Shanghai have strategic layouts. For example, K-Boxing menswear has done research and development into a product called the “Angel’s Armor,” which can accommodate all kinds of nucleic acid testing sampling items in a timely manner.

Department store group Lane Crawford provided free outdoor electronic advertising screens for charity promotion, prepared fresh vegetable gift packs for Shanghai customers who are self-quarantining at home, provided gift boxes for customers containing Protector Daily masks with professional-level filtration and elegant designs and protective spray sets from Bondi Wash, an antibacterial plant brand from Australia. It also enhanced training for staff on communication with customers remotely during the closure.

These actions are similar to what occurred in the West in 2020 and 2021 during its various lockdowns as a result of COVID-19. Luxury, fashion, and beauty groups from LVMH Moët Hennessy Louis Vuitton to Clarins pivoted their operations to producing sanitizer or personal protective equipment, while retailers including Walmart Inc., Target Corp., Macy’s Inc., and Costco saw their online sales boom.

For customers who are unable to visit stores, Lane Crawford provides personalized services through online channels such as live streaming and online communication with style consultants. To provide customers with a convenient and diverse shopping experience, it continues to improve its online services by launching initiatives such as holiday wish lists and membership of WeChat apps.

How Chinese fashion companies adapt to three years of the pandemic

What: Net sales across Nordstrom stores exceeded pre-pandemic levels in the first quarter with a 23.5% jump thanks to Americans buying designer apparel and footwear as they return to offices and social events snapped up. Both Nordstrom and Nordstrom Rack banners post double-digit sales growth.

Why it is important: Counting on demand from affluent consumers to help overcome inflation, Nordstrom shows confidence by raising its annual profit and revenue forecasts.

Nordstrom, which also authorized a new $500 million buyback, projected fiscal 2022 revenue to rise 6% to 8%, compared with a prior forecast of 5% to 7% growth. Full-year adjusted profit per share is expected between $3.38 and $3.68, higher than $3.15 to $3.50 earlier.

Meanwhile, its off-price division, Nordstrom Rack, posted a 10.3% increase in quarterly sales.

Total revenue rose 18.7% to $3.57 billion in the first quarter, surpassing analysts' estimates of $3.28 billion. The retailer said net income for the quarter ended April 30 rose to $20 million, or 13 cents per share, from a loss of $166 million, or $1.05 per share, a year earlier.

Nordstrom Q1 results