News
JCPenney closes more stores
JCPenney closes more stores
What: another round of store closings for the US department store chain
Why it is important: after filing for bankruptcy in May, the retailer started closing 154 stores in June. Now that it has been saved from bankruptcy it announces new store closures for early 2021
The retailer has emerged from bankruptcy after being acquired by mall owners Simon Property Group and Brookfield Asset Management, Inc. Now it said it will be closing another 15 stores by the end of March 2021, adding to the list of stores already closed down this year. "As part of our store optimization strategy that began in June with our financial restructuring, we have made the decision to close an additional 15 stores," J.C. Penney said in a statement.
J.C. Penney closing more stores after exiting bankruptcy [...]
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Selfridges new retail concept
Selfridges new retail concept
What: a new space to support independent designers
Why it is important: the fashion sector has been hit hard by the pandemic. Now department stores are reinventing their store space by offering new options and services in order to optimise their attract more customers. As a response to the crisis, Selfridges opens a new space dedicated to emerging designer brands. The initiative allows for the store to offer exclusive items and deals, and to support independent European designers at the same time.
“Rewiring Space” opened at Selfridges flagship on Oxford Street and is the first tangible result of “Rewiring Fashion,” a series of virtual meetings between designers, brand operators, retailers and advisors looking for ways to reshape the fashion system as a result of the pandemic. The Twenty Europe-based designers selected to enter the space were hit hard by the pandemic, and suffered from cancelled orders and late payments. Through “Rewiring Space” they sell current and past-season for up to 70 percent off the original retail price. Selfridges does not buy the merchandise, but provides its floor space, retail fixtures and sales personnel free of charge, and will take a 15 percent commission on sales to pay for operating fees. Through this initiative, the department store both support young designers and reinforce its ties with them.
Selfridges Launches New Retail Concept in Support of Independent Designers
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Korean retailers focus on “homebodies”
Korean retailers focus on “homebodies”
What: Retailers build communities to battle big tech and gain “homebodies”.
Why it is important: Consumer spends more time shopping from home.
Korean retail companies are racing to form their own online communities so they are not so dependent on the likes of Facebook and Instagram. This is especially urgent as people spend more time indoors: "homebodies" are increasingly looking to fulfil their needs for shopping and community from the comfort of their couches.
Retailers build communities to battle big tech, gain 'homebodies'
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IADS website: a renewed experience
IADS website: a renewed experience
IADS has been redesigning its website to offer its members an easier and more efficient navigation process.
In order to ensure a seamless experience on this working tool, information have been reorganised to simplify the access, and a new section named 'Members Club' has been created to encourage exchange between all IADS members.
IADS has also relaunched its public website part to share more information about its activities and its members to a broader audience.
Download below the guide to this new tool.
Ikea opens first second-hand store in Sweden
Ikea opens first second-hand store in Sweden
What: a first store dedicated to second-hand furniture for giant Swedish furniture retailer Ikea
Why it is important: sustainability can no longer be ignored in retail and resale is one of the way to enter the circular economy and eventually become more sustainable. It is important to note that a player like Ikea, which is sort of a fast-fashion retailer for home that has been producing furniture in huge quantities to sell all over the world, is now redefining its business model to reach its sustainability targets by 2030 (including being circular).
The new second hand store is located in Eskilstuna’s ReTuna mall, famous for being the first shopping centre in the world offering only recycled and second-hand products. The used furniture will be repaired or brushed up in an adjacent repair shop, and will then be sold at a reduced price. This is a trial for the retailer that will evaluate results in six months. If those are conclusive, the project could be rolled out to other markets.
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Debenhams launches virtual beauty room
Debenhams launches virtual beauty room
What: another digital initiative in retail and in beauty
Why it is important: with lockdowns still remaining in some parts of Europe and across the globe, retailers need to extend their digital presence in order to reach out to customers who cannot come in the physical stores
UK department chain Debenhams has opened a Virtual Beauty Room to offer customers access to expert advice and virtual consultations while stores remain temporarily closed. Working in partnership with a collection of premium beauty brands, costumers can book one-to-one virtual consultations on debenhams.com with leading skincare brand Shiseido and make up brands Givenchy and Bare Minerals. The 30-minute bespoke consultations are individual and focus on answering every beauty need. Debenhams also uses its social media platforms with social masterclasses featuring beauty experts sharing tips, tricks and expert techniques.
DEBENHAMS LAUNCHES VIRTUAL BEAUTY CONSULTATIONS [...]
JD.com plans aggressive brick-and-mortar expansion
JD.com plans aggressive brick-and-mortar expansion
What: a ecommerce giant make a push into physical retail
Why it is important: as the pandemic has forced an increase in online retail, such moves show that physical retail still remain relevant and essential for retailers
Chinese retailer JD.com plans to expand its brick-and-mortar reach and aims for a network of 5 million physical stores in the next 3 years, as a response against online Chinese competition. The retailer won’t open 5 million units but will rely on its partner stores to reach its objectives. Through this aggressive physical push, JD wants to reach out to all customers, including the ones in smallest cities that are courted by competition, including rival Alibaba.
JD.com wants a network of 5 million stores as e-commerce battle heats up
How to manage the crisis
How to manage the crisis
What: good results at Dillard’s in spite of the crisis
Why it is important: According to an article in The Motley Fool, Dillard’s is one of the few department stores which has actually managed to successfully navigate the Covid-19 period so far. After surprisingly good Q2 (May – July) results, analysts were still expecting problems for its third quarter. However, Dillard’s unexpectedly published a quarterly profit in Q3 (ending 31 October).
After a massive loss in its first quarter, the company cleared its inventory down more than 14% over the year. So while sales fell 35% in Q2, gross margin was up to 31.1% from 28.7%. Inventory clearing continued in Q3, boosting gross margin to 36.6%. Although sales remained weak, down by 25%, it managed to reduce retail expenses by 24% keeping costs flat as a percentage of revenue. It also managed to generate cash flow and reduce its short-term borrowings significantly.
This Department Store Chain Is Making Money Despite COVID-19
John Lewis is repurposing its property estate
John Lewis is repurposing its property estate
What: John Lewis is converting part it its real estate to homes and offices.
Why it is important: the move is relevant of how the real estate issue should be swiftly addressed and gives a hint of the changing face of high streets.
John Lewis is now turning landlord with plans for homes across 20 of its sites and this week got the greenlight to convert almost half of its flagship Oxford Street store into offices. The repurposing of its property estate says much about the crisis gripping bricks and mortar retail, as stores grapple with the toxic combination of the pandemic and competition from online rivals. It also hints at the changing shape of the UK’s high streets.
According to the Local Data Company, the number of retail units in the UK fell 7 per cent between 2015 and July this year, as 32,500 more stores closed than opened. The number of shops lost each year has grown steadily. Even so, 2020 stands out: there has been a net loss of 7,834 units in the first half of the year, ahead of every other full year on record and not far short of the 9,169 lost in 2019.
Kingfisher puts physical stores at heart of online sales push
Fortnum & Mason names new CEO
Fortnum & Mason names new CEO
What: the luxury retailer has appointed Tom Athron (picture here) as their new CEO.
Why is it important: Tom Athron will replace Ewan Venters after he announced in September that he would leave the company. Venters has been chief executive since 2012 and will start a new job at art gallery Hauser & Wirth.
Set to join on 1 December 2020, there will be a month-long handover process between the two. Tom Athron comes from Matchesfashion where he leads e-commerce teams and managed logistic customer experience. He also worked as a trading director at the John Lewis Partnership and CFO at Waitrose for 12 years.
Talking about Fortnum & Mason Athron said that his new company is “a traditional British business with a truly global outlook, a strong purpose and increasingly desired around the world”.
The luxury retailer is managed by the Weston family whose other retail interests include Selfridges and Primark.
Fortnum & Mason names Matchesfashion's Athron to top post
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New virtual store experience to shoppers
New virtual store experience to shoppers
What: Virtual stores present new experiences to shoppers who miss the in-store feeling.
Why it is important: Retailers use digital to prepare for rebound of store traffic expected once the pandemic is over.
Retailers such as Ralph Lauren, Groupe Clarins and Gap are experimenting with virtual stores, letting web users navigate digital versions of their physical locations and try out features such as one-on-one consultations.
Digital stores are not new, but the pandemic is prompting more companies to use technology in new ways to connect with consumers, said Mikey Vu, partner at Bain & Co., a consulting firm. And some retailers now introducing such experiences say they will continue to operate, at least for a few months.
Not every virtual store will succeed, he said. As more companies test the concept, they’ll need to better personalize the experience for visitors, make it easier to discover products and make it a fun experience, he said.
Virtual Stores Present New Experiences to Shoppers Who Miss the In-Store Feeling
Printemps closes stores
Printemps closes stores
What: Printemps group issues a recovery plan which includes the closure of several stores.
Why is it important: in order to avoid losses, respond to market requirements, and ensure its long-term sustainability, the Printemps group is now obligated to transform its shop network and its organisation.
The French market has been structurally challenged for some years and aggravated by a number of economic disruptions (attacks, yellow jackets, strikes). Now, the Covid-19 crisis is the latest challenges retailers have to face. In order to reduce cost structure, French department store group Printemps has decided to close four of the group's 19 department stores (Paris Place d'Italie, Le Havre, Strasbourg, Metz) and three Citadiums stores out of 8 (Paris Champs Elysées, Paris Nation, Toulon) meaning the layoff of 428 employees.
The group decided to free up significant investment capacity in order to:
- Improve their digital presence and make their omnicanality an essential lever for growth
- Strength the differentiation offer and reinvent the retail experience
- Redevelop its customer base
LE GROUPE PRINTEMPS ANNONCE UN PLAN DE RELANCE POUR ASSURER LA PÉRENNITÉ DE SES ACTIVITÉS
DeBijenkorf launches webshop in France
DeBijenkorf launches webshop in France
What: the Dutch department store opens a French-language webshop available at debijenkorf.fr
Why it is important: the expansion of e-commerce will allow for the retailer to gain a wider consumer basis and extend its reach in Europe.
The department store already opened a French-language webshop in Wallonia, Belgium, in September and now enters the French territory. DeBijenkorf already has a dedicated website in Germany and plans to open one in Austria, further expanding in Europe.
CEO Giovanni Colauto explains his omni-channel plans in the new book 'The Future of Department Stores'
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Korean department stores seek marketing to secure loyal customers
Korean department stores seek marketing to secure loyal customers
What: Local department stores in Korea are pursuing different brand marketing to acquire loyal customers amid decreasing sales due to the Covid-19 pandemic.
Why it is important: It is now imperative for retailers to offer new experiences to customers that will differentiate them from e-commerce firms.
Hyundai Department Store is trying to kill two birds with one stone through its "Eco-friendly VIP system." This is a program giving VIP benefits to customers who actively participate in environmentally friendly activities. Customers who participate in five out of eight such activities will be given VIP benefits such as three-hour free parking and a 5 percent discount off any item purchased at a Hyundai Department Stores.
They will also be invited to various cultural and fashion events, and can get a maximum eight free cups of coffee before the program ends in December. Hyundai hopes to bring customers back to their shopping mall, particularly young customers who are interested in climate and environmental issues.
Shinsegae Department Store took a different path, partially turning its shopping venues into an art gallery. Starting August, they exhibited 250 works including paintings, photographs and sculptures at luxury stores and VIP lounges. It first started with 120 works but received good feedback and so added 130 more. At luxury boutiques, the art created synergy to boost sales of high-end items by 37% between August and September compared to 2019. Also, customers purchased 28 pieces of art from the boutique while shopping.
Galleria Department Store is hosting an Italian fashion event in collaboration with the Italian Trade Agency for three weeks. At its Apgujeong branch, Galleria will introduce Italian classic fashion brands such as Marni and Cesare Attolini at its select menswear shop g.street 494 homme. The retailer will offer high-end Italian fashion and lifestyle programs for VIP customers at its premium grocery store Gourmet 494 in Hannam. Galleria in Gwanggyo will run a pop-up store adopting the lifestyle theme "Italian Design Parade."
Department stores seek marketing to secure loyal customers
Walmart to sell stakes in Japanese supermarket Seiyu
Walmart to sell stakes in Japanese supermarket Seiyu
What: the continuation of Walmart’s strategic realignment on US, China and India.
Why it is important: Walmart is downsizing significantly its worldwide activities to focus on core markets and activities.
After selling its stakes in UK’s Asda for the same price it bought it ten years ago, and announcing that it will retreat from Argentina as well, Walmart has announced its will to sell majority stakes in Japanese Seiyu. Walmart bought its shares two times, through the first round in 2002 and then in 2008 when it took full control. Its strategy to bring the American-way of retail to Japanese customers did not really take off, which explains this retreat today.
Walmart sells majority stake in Japanese supermarket chain
Lotte plans to turn Lotte Mart branches into semi-dark stores
Lotte plans to turn Lotte Mart branches into semi-dark stores
What: Lotte plans to turn 29 Lotte Mart branches into semi-dark stores by 2021.
Why it is important: The company is converting offline facilities as it struggles with the rapid rise of online shopping.
The new plans were announced amid the continuous struggles Lotte Shopping faces, which have been recently aggravated by the Covid-19 outbreak. In the first half of this year, Lotte Shopping, which operates Lotte Mart, Lotte Department Store and Lotte Hi-Mart, swung to 242.31 billion won ($214 million) in net loss in the first half of the year from 186.06 billion won in net profit during the same period last year.
Lotte goes semi-dark as online shopping booms on
Tokyu department store leaves Thailand
Tokyu department store leaves Thailand
What: another Japanese department store to close business in Thailand
Why it is important: the closure of Tokyu operations in Thailand makes it the second department store chain to exit the country after the withdrawal of Isetan earlier this year. Competition is harsh in Thailand and the lack of tourists due to the pandemic has been another setback for retailers.
Tokyu department store, located inside Bangkok’s MBK Centre shopping mall, will close doors in January. Tokyu closed its other store at Paradise Park, also operated by MBK Plc, in January last year. The department store has operated in the country since 1985. Tokyu is the second Japanese department store chain to exit the country after Isetan last September.
Bangkok's Tokyu store to close in latest exit by Japanese retailer
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Frasers increases stake in Mulberry
Frasers increases stake in Mulberry
What: Frasers Group owners of House of Fraser department stores have increased their stake in luxury brand Mulberry
Why is it important: House of Fraser group is shifting upmarket first through the development of its Flannels luxury format and second through its interest in luxury brands. Acquiring brands gives more control over distribution and potentially allows a degree of exclusivity.
Frasers Group has a position called “head of elevation” who announced that the group is increasing its share of Mulberry to 29% after acquiring shares from Icelandic bank Kaupthing. Mulberry has been present in House of Fraser for some time. Frasers’ increased stake means almost nine-tenths of Mulberry stock is in the hands of Mike Ashley, owner of Fraser Group and Challice, the vehicle for Singapore’s Ong family, which owns 56%.
Frasers has also taken a stake in Hugo Boss, although most of that is held through option agreements rather than directly through shares.
Frasers lifts stake in Mulberry
Walmart to divest Argentina operations
Walmart to divest Argentina operations
What: Walmart to part with its 92 stores across Argentina.
Why it is important: The company’s international portfolio reset continues.
Continuing plans to recast its international holdings around markets with high growth potential, Walmart has agreed to sell its Argentina business to Grupo de Narvaez, a Latin America retail investor which has retail operations in Argentina, Ecuador and Uruguay.
Earlier this year, Walmart reached an agreement to sell a majority stake in its ASDA chain in the U.K., and did the same in Brazil in 2018. Analysts believe it may also be looking for a buyer for divisions in Chile and Africa.
Walmart Argentina started operating in the country in 1995 with the opening of its first store in the province of Buenos Aires. Currently, the company is the ninth largest private employer in the country, with more than 9 000 employees in 92 stores, distributed in 21 provinces.
Grupo de Narváez Acquires Full Ownership of Walmart Argentina
John Lewis next phase of a 5-year plan, job cuts
John Lewis next phase of a 5-year plan, job cuts
What: In consistency with its 5-year plan unveiled earlier this year, the retailer continues its shift to become a more agile, profitable, and sustainable company by cutting 1,500 jobs at its head office.
Why is it important: the cuts will save the business GBP 50 million and lead the way for an agile and flexible head office.
The partnership follows the course of its plan to bring the business back to sustainable profits by 2025, which requires to become “a leaner, simpler and faster business”. In order to do so, it is cutting jobs amid its head office team. Sharon White, chairman of the John Lewis Partnership, said: "Our Partnership Plan sets a course to create a thriving and sustainable business for the future. To achieve this we must be agile and able to adapt quickly to the changing needs of our customers.” Whenever it is possible new roles will be given to the sacked partners and compensations for the others.
As the group revealed plans to cut head office jobs, these new layoffs add to the 1,300 redundancies announced in July this year after the business announced close eight John Lewis stores and four Waitrose outlets.
The partnership also announces management shifts, with a new Executive Director of Finance and the axing of the Executive Director for Customer Service position.
Read more in the press release below.
JOHN LEWIS PARTNERSHIP ANNOUNCES NEXT PHASE OF HEAD OFFICE CHANGES
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- John Lewis finalised its strategic review and comes with a new plan.
- John Lewis is repurposing its property estate
- John Lewis to cut jobs and close stores
A new rent model under consideration in UK Malls
A new rent model under consideration in UK Malls
What: Hammerson mall is exploring a new rent model including online sales.
Why it is important: could it be a new inspiration for department stores to propose more competitive models to brands?
Hammerson reported that only 38% of its UK tenants paid rent in Q4 2020, adding up to the difficulties of the retail giant, which is leading to a €912m refinancing, through a €610m fundraise and the rest by selling assets. As a consequence, and also following suit to many retailers complaints, the rent model is reported to be reevaluated by Hammerson, into a threefold approach, including in-store sales, footfall and online sales (collected instores).
This change would probably induce new behaviours in the future, with tenants and landlords cooperating together to increase the efficiency of their marketing strategies, working hands in hands to propose at the same time interesting experiences and competitive services.
UK retailers’ rents could soon be based on online sales
Nike gets Gen-Z advice on digital
Nike gets Gen-Z advice on digital
What: Nike allow students to analyse its digital data to improve website and customer’s engagement.
Why it is important: Getting advice from the generation they will be depending on to drive future sales.
Global consumer brand Nike made a bold move this year to up its digital game. It allowed college students from around the world to analyse its digital data and look for ways to improve its website and customer engagement.
Nike agreed to be the corporate partner for this year’s Adobe Analytics Challenge, a 15-year-old competition that gives student teams access to data from the corporate partner’s digital sites that lets them evaluate things like bounce rates, return visits, buyers vs. browsers.
The winning Indian Institute of Technology team had suggestions for how Nike could redesign its website, improve engagement on social media, and focus better on likely buyers. The details of their presentation shared by Adobe contain some good Gen-Z advice on a “Journey Tour” feature, how to incentivise users to create an account, and driving more engagement.
Nike Gets Next-Generation Advice On How To Improve Its Digital Experience
Korean department stores turn culture spaces
Korean department stores turn culture spaces
What: Department stores transform outlets into culture spaces.
Why it is important: Exploring new ways to differentiate.
As the shopping experience itself is becoming not enough to lure consumers, department store operators are looking for ways to differentiate themselves by transforming their stores into cultural attractions where visitors can enjoy not only shopping but also a variety of culture and art.
Lotte Department Store started setting up experience-focused cultural facilities within its outlets across the country last year. Hyundai Department Store also built a cultural space at its Pangyo branch, south of Seoul. And Shinsegae Department Store is running professional galleries at its flagship location in Seoul and as well as stores in Busan, Gwangju and Daegu.
Department Stores Transform Outlets from Shopping Centers to Culture Spaces
Nordstrom welcomes DTC home brand Casper
Nordstrom welcomes DTC home brand Casper
What: a US department store partnering with a successful DTC brand
Why it is important: the home category has been expending fast since the beginning of the pandemic and it is important for department stores to keep developing this category in order to respond to consumers’ needs. It is also a demonstration that department stores are still a relevant marketplace for digital players
US department store Nordstrom is partnering with direct-to-consumer sleep company Casper Sleep. The brand will be available at selected Nordstrom store and at nordstrom.com. Casper already operates its own stores and ecommerce, and has partnerships with divers retailers.
The home category has been expanding rapidly in retail given the new consuming habits speeded up by the pandemic and the new stay-at-home reality, and retailers need to bet on this category to stay relevant and answer to their costumers’ needs.
Emilie Arel, President and Chief Commercial Officer at Casper, said: “Partnering with a premier retailer like Nordstrom is another step towards advancing our multi-channel distribution strategy to reach more customers wherever they prefer to shop […] As we are spending more time at home, people are seeking out a better sleep experience more than ever. The combination of these two loved, trusted and authentic brands is a win for both partners and customers alike.”
“As we redefine our Home category, we’re excited to be partnering with Casper to bring their award-winning assortment of bedding to Nordstrom,” said Olivia Kim, Vice President of Creative Projects and Home at Nordstrom.
Casper Partners With Nordstrom to Bring Its Mattresses and Sleep Products to Customers [...]
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