UPDATE 12.01.21: M&S has confirmed the acquisition of the Jaeger brand. It will complete the purchase of Jaeger’s stock and other assets by the end of the month, and will exclude Jaeger’s 63 remaining stores. The deal is currently being finalised but no purchase price has been released.

What: a department store chain buying a struggling brand

Why it is important: UK retail scene has been particularly hit by the crisis, with big names such as Debenhams and Arcadia falling into administration. Yet it can be the opportunity for some to make strategic acquisitions

08.01.21: UK Edinburgh Woollen Mill Group is struggling and had Peacocks and Jaeger brands filed for administration last November -a results from the covid crisis. The group, owned by billionaire Philip Day, is now looking for buyers for the brands and Marks & Spencer could be one of them. M&S is increasingly looking at adding new brands to its formerly-own-brand-only offer and this could be the perfect opportunity. The department store would buy the brand but not the physical stores, given its own already huge estate of department store across UK.

Marks & Spencer buys Jaeger fashion brand from administrators

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What: the necessity for Lotte Group to undergo innovative changes and portfolio revisions to respond to the post-Covid-19 market changes.

Why it is important: South Korean Lotte Group is one of the biggest retail group but was not spared by the covid-19 pandemic. The group Chairperson Shin Dong-bin is firmly warning CEOs about the necessity to make drastic changes to the structure in order to respond to the retail group’s “sluggish performance”.

Shin Dong-bin also reprimanded executives that failed to defend the group’s previous lead in the retail market. “Those that succeed in the post-crisis era are those that manage to achieve innovation during crisis. […] Portfolio adjustment may be considered for companies that fail to innovate themselves. A company that only pursues survival has no future” he said.

In November, the group already carried out an executive reshuffle, replacing the chiefs of 13 out of its 35 affiliates.

Lotte Group chief calls for drastic changes in post-COVID-19 era-프린트화면

The Financial Times has reported examples of workplace surveillance dressed up as safety measures. Amazon has introduced AWS Panorama which uses footage from security cameras to detect employees who are not distancing. But as the article says, it’s not hard to imagine a future where workers are blamed for contracting Covid with implications for sick pay. Walmart has filed a patent for a system of sound sensors placed near cashiers which “could determine a performance metric for the employee based on the audio data”.

Research has shown that close and constant monitoring is injurious to human health. Monitoring at work is seen as increasingly important with remote work which puts the time factor back into the hands of the employees.

Workplace surveillance may hurt us more than it helps

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: 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 talk from Anne Pitcher at the CEO summit

Why it is important: Some of the key messages delivered give a hint of the Selfridges’ group strategy and could be very well examples to follow

After the BoF last week, Anne Pitcher gave an interview to WWD where, in addition to the reflection over 2020 and its consequences, she detailed some of her insights, which should be considered by other department stores:

• On sustainability: all stores are now powered by green energy, with a plan to reduce carbon footprint by 100% and greenhouse gas emissions by 64% within 2050. She also mentioned new ways to sell and shop, such as the Oxfam shop in shop (initially launched as a popup),
• On the role of department stores, “places for social and human experiences”, with a need to think beyond sales and look to hotels, museums and galleries, a position that we also explored earlier this year in various articles and the White Paper, to become houses of content and experience.

2020 CEO Summit_ Anne Pitcher and a Year of Radical Thinking at Selfridges

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What: panorama of 5 top retailers’ actions for Christmas.

Why it is important: they all have a very distinct strategy and approach to windows in a Covid-19 context.

Bergdorf Goodman decided to team up with associations and structures involved in diversity, equality, access to food, to disclose windows that are simpler than usual, focused on the core values of the retailer without dispersing on sophisticated setups. This is also linked to the fact that they were pre-build and only assembled on-site, instead of being fabricated in the store, to ensure teams’ safety.

Bloomingdale’s unveiled its windows via a virtual event with benefits given to an association protecting children, and the theme of the season is “give happy”. The traditionally interactive windows with touch components are replaced this year by scented windows, with fragrance diffusers.

Saks Fifth Avenue decided to celebrate New York by representing six windows staging quintessential moments of the city life. They were co-designed with brands (Dries Van Noted, Alexander McQueen) and were unveiled through a series of live-streamed events, each one supporting a charitable cause. In addition, SFA is planning to make a donation to non-profit organisations dedicated to the city.

Macy’s celebrates the essential workers with a ‘Give, Love, Believe’ campaign. They were designed and produced in a record time of half what it normally takes.

Nordstrom’s building structure does not include boxed-in windows, and instead, chose to use its façade as a décor. They decided to use superlative numbers of lights, ornaments and symbols to translate the Christmas spirit and attract customers.

How 5 department stores updated their holiday window displays for 2020

What: a ransomware attack forcing to close down stores.

Why it is important: are you prepared?

E-land is a major and well respected Korean conglomerate operating in retail malls, restaurants, theme parks, and others, as well as 59 stores and 60 brands.

It underwent on the 22nd of November a ransomware attack (a malware hacking a system and used to put the organisation under pressure to pay and eliminate the threat) which forced the company to close half of its operations, for an undetermined period of time.

According to the Korea Times, this kind of attacks against retail businesses has increased worldwide by 14% during the first half of 2020 and is expected to keep on growing due to the increasing weight of digital operations and teleworking.

Korean Retailer 'E-Land' Suffers Ransomware Attack—Almost Half of its Operations Face Shut Down!

What: Shinsegae seeks local retail paradigm shift with new content offer.

Why it is important: The retailer breaks down barrier between shopping and television content markets.

Shinsegae Group will introduce a new paradigm in retailing by combining TV shows and online shopping with a concept the company calls "drama commerce." This brings the shopping experience to another level where people can purchase products while watching dramatic content on their mobile phone. TV commercials are nothing new but Shinsegae's drama commerce will deliver TV shows that place the featured products squarely before any kind of storyline. The group hopes that this advertising model can help its retailing unit gain momentum to become a top player in the e-commerce sector.

Shinsegae seeks local retail paradigm shift with 'drama commerce'

What: John Lewis will stop taking online orders outside of United Kingdom

Why it is important: in a moment where online retail is soaring, a big department store player has decided to focus its business on its home market and to cater locally only.

As stores will be reopening in UK following a new month of lockdown, John Lewis & Partners has decided to close its international business and put a stop to international online orders starting 9 December. Shipping costs are too expensive for the retailer, especially with the end of the Brexit transition period profiling (on 1 January 2021) -which will higher even more the costs. International sales don’t play a major role in the company turnover, and has fallen by nearly 17% compared to last year. A John Lewis spokesman said: “As part of our Partnership Plan for the next two years, in John Lewis we have decided to focus on areas of the business that will deliver products and services for our local UK customers. As such, we are no longer pursuing international expansion.”

John lewis stops taking non-UK online orders

What: a new proof of concept implemented in 4 stores designed to address omnichannel.

Why it is important: they rethink their stores: reduce the shoppable area, edit sku assortment, allow space for pickup and ship from stores. Is that an idea for department stores with regional networks?

Best Buy has open 4 new store formats in Minneapolis to be stores and fulfillment hubs: SKU assortment is limited to bestsellers, the shoppable area is reduced by half, pickup and ship from store spaces are increased. It is supposed to be rolled over 90 stores with a network ship from store capability of 70% in Q4 2020.

This move is unusual during the holiday season but reflects both the need for agility and the understanding that the key to omnichannel is to rethink the role of the store and its contribution to value.

Best Buy tests limited SKUs on store floor to make space for fulfillment

What: Milan store renovates its women floors with a EUR 6 million investment.

Why it is important: Logistical support is now key for department stores.

Milan's department store has invested over EUR 6 million in renovating the fourth and fifth floors, which together with the third floor, dedicated to footwear with brands of the calibre of Christian Louboutin, Jimmy Choo, Chanel, Bottega Veneta and many others, make up the offer dedicated to the universe of women. The first floor of Annex Rinascente has also undergone a major restyling.

Rinascente Milano renews its plans dedicated to women with an investment of 6 million euros

What: Frasers Group Plc is in last-ditch talks to buy Debenhams.

Why it is important: Debenhams employs 12 000 people and has 124 stores, all rented.

Mike Ashley’s Frasers Group confirmed it was in negotiations to buy the ailing Debenhams department store in a move which could save thousands of jobs. News of Ashley’s interest comes just a few days after Debenhams said it could have to liquidate the business after talks with JD Sports Fashion Plc ended. Frasers already owns the House of Fraser chain, which it also bought out of administration, providing potential synergies if he were to merge the two.

Read IADS Exclusive article on Frasers Group to get insights on the group’s business model, on its opportunities and the risks it is facing.

Mike Ashley’s Frasers Group in Talks to Buy Debenhams

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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

After filing for Chapter 11 bankruptcy protection in August 2019, department store chain Barneys New York was acquired by Authentic Brands Group ABG and B. Riley Financial Inc. in November 2019. All stores entered liquidation and were closed.

Now ABG is planning to reopen two first stores early 2021. One will open inside Saks Fifth Avenue NYC’s flagship store -it was supposed to make its comeback last September as a boutique on the fifth floor of the Saks flagship, but it was delayed by the health crisis. A second small standalone shop will open in Connecticut. Fred, the restaurant within Barneys, will also be resurrecting sometime next year.

ABG has licensed Barneys’ name to Saks to run websites, pop-ups and the store inside Saks’ flagship location. ABG has six Barneys stores in Japan and plans to expand it into China and Korea in the next two years.

Barneys Returning to NYC Next Year Inside Saks Fifth Avenue

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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What: another department store going virtual for this year’s Christmas season

Why it is important: with the health crisis still very critical in Europe and in America, retailers are taking a new approach with the Holiday season differently this year, many of them launching online event in order to protect customers and bring them the Christmas spirit at the same time

In Southern US, department store chain Belk has launched several digital events to celebrate the Christmas season, which include an online holiday home decorating contest, and free phone calls from Santa.

The first-ever Holidays at Home Contest invites customers to post a photo or video of their house, or of their favourite holiday-inspired room on Facebook or Instagram, tagging @Belk and #BelkHolidaysAtHome2020 for a chance to win gift cards.

Belk also launched its Very Merry Surprise event selecting one in-store or curbside pickup customer per day, per store, to receive a surprise Belk gift card in the value of their online order.

Belk Offers Virtual Holiday Festivities and Continues to Spread Cheer this Season

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What: An expanded reach in China for Gucci, a position consolidation for Ali Baba

Why it is important: at a moment when e-commerce is consolidating worldwide, Ali Baba confirms its central position in the game, by teaming up with a luxury giant, even though the brand already has its own operations

Gucci will launch two flagships on Tmall, the first one dedicated to Fashion on 21 December, and the second one, in coordination with licencee Coty, in February for its beauty products. Interestingly, it comes as a complement to the already existing infrastructure Gucci built in China, with dedicated business unit, website, marketing approach, products.

This agreement comes at an opportunistic moment, as Kering, owner of Gucci, had previously stated in the past that it would never work with Ali Baba due to concerns over counterfeit goods sold on Tmall’s various platforms. As Bain estimates that in 2025, Chinese customers will represent 50% of the luxury business, and 30% of purchases in China, it seems that Gucci is adopting a pragmatic attitude in order to preserve its growth reservoir.

This partnership confirms the prevalence of Ali Baba, which, through its recent partnership with Farfetch and YNAP, is moving fast to be at the center of the worldwide luxury e-commerce business.

Gucci Inks Partnership With Alibaba’s Tmall

Gucci targets China’s post-Covid luxury surge with Alibaba tie-up

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: First insights from John Lewis who had only 3 stores opened for Black Friday

Why it is important: A record online sales day with interesting insights from the top sellers

On the busiest Black Friday day, John Lewis reports a 35% increase on e-commerce on last year. Overall, this represents a volume increase of 65% compared to last year. Interestingly enough, when it comes to the top sellers by categories:

• In electronics, John Lewis clearly attracted customers thanks to deal on otherwise non discounted products (Apple)
• Fashion is still lagging behind: the top sellers are commodities (umbrellas, underwear)
• Home and beauty reflect the homeworking trend and the impact of lockdown in the UK.

Johnn Lewis back friday 2020 update 

What: Rinascente introduced its physical Christmas windows via a Zoom call.

Why it is important: a perfectly executed communication plan both offline and online.

Rinascente, which expects a sales decrease of 30 to 40% this year, has introduced its Christmas windows from Milan, Florence and Rome shops with an efficient strategy making the best of all dimensions: a physical event, introduced by a Zoom call, backed by a love letter to Milan in Corriere della Serra signed by la Rinascente CEO and Milan flagship director. A good opportunity to have a look at their Christmas windows too.

Under the impetus of its owner Central of Thailand, Rinascente has been pushing its digital game over the past two years. It debuted its online store last June and announced it would be introducing a “gamification” element to its site. Read more in our IADS Exclusive: E-commerce & Department Stores.

Christmas at Rinascente Comes With Tradition, Investments and Digital Learnings

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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 C to C resale platform from an ecommerce player

Why it is important: digital shopping has accelerated during the pandemic. Now French online store La Redoute, part of Galeries Lafayette Group, is opening a space on its website dedicated to the sale of second-hand fashion between customers. Not only this move will reinforce the brand’s digital operations, it is also a good way to offer sustainability options (at bargain price) to its customers.

Dubbed La Reboucle, the new section will allow for consumers to sell and buy second-hand clothing, and is accessible through La Redoute website and app. It follows the same business model as Lithuanian pure-player Vinted. The resale trend has also been accelerated with the pandemic as people are looking for sustainable way to get fashion. The platform will accept articles from any brands, and not just La Redoute private brands or items purchased on the website.

The new service launches mid-December for consumers to put items to sell, and transaction will begin in January 2021.

La Redoute déploie "La Reboucle", son offre de seconde main

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What: The group sets its sights on U.K. struggling Debenhams and Arcadia.

Why it is important: ABG believes in reviving retailers in critical condition.

Authentic Brands Group held talks with administrators over the weekend for both Debenhams and Arcadia, and is eyeing a deal to take over the troubled retail groups, with Debenhams currently under administration. If it is successful, ABG will make a significant step into the UK and add the department store chain and flatlining fashion empire to a list of “dead on arrival” retailers that it has snapped up in a little over a year, including Barneys New York, Forever 21, and Brooks Brothers.

Authentic Brands Group is not the only one interested in the bankrupt brands. Mike Ashley's Frasers Group has expressed several times its interest in both Debenhams and Arcadia. He also is used to buying struggling brands with the ambition to revive and elevate them, like he is doing with House of Fraser. Learn more about this business model in IADS Exclusive article dedicated to Frasers Group.

From Barneys To Topshop, Authentic Brands Looks To Build Retail Empire

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What: Dickson Concepts saw a rise in first-half profit despite lower sales.

Why it is important: For the 6 months to the end of September, they saw turnover fall 42.7%.

Harvey Nichols owner Dickson Concepts has reported a rise in profit for the first half of its financial year, despite lower sales. For the six months to the end of September, Dickson Concepts, a Hong Kong luxury goods company which owns Harvey Nichols and also operates retail stores in Asia under the Roger Vivier and Tod’s brands, saw turnover fall 42.7% to GBP93.4 million. However, a “substantial increase in profit contribution from the investment portfolio, a doubling of profit in Taiwan, profit contribution from China and tight control in operating costs at all levels of operation” helped the company turn to a profit.

Harvey Nichols owner posts half-year profit despite lower sales