Archive for the 'Apparel retailing' Category

L.L. Bean considers a new return policy

From a recent RetailWire discussion, I comment on L.L.Bean’s consideration of a less liberal return policy than it has always been known for:

Having worked for Kohl’s for 24 years, I have a bias toward more forgiving return policies. Kohl’s always viewed its return policies as a competitive advantage and marketing practice (even though there was plenty of gnashing of teeth among the merchant ranks) and I believe this is still the case. Stores can maintain this kind of trust with their customers, even if they look at tweaking the policy through issuance of gift cards for goods returned without receipts or after some time has passed.

I’d be very careful if I were L.L.Bean to walk away from part of what has defined its brand for a long time. As another panelist suggests, look for other reasons why costs are rising faster than sales, starting with merchandise assortments.

Can The Gap make its own luck?

After the CEO of Gap mentioned the lack of a fashion trend as part of his company’s sales problems, I posted the following (late in 2016) to RetailWire:

To blame soft sales on “lack of a trend” fails to recognize the retailer’s responsibility to help create those trends. Back in the Drexler-led heyday of The Gap, the company helped create the khaki phenomenon by getting behind the item in a huge way and by marketing it on TV as a must-have wardrobe item. The same principle applied to many other items in the store — from my days merchandising handbags, I remember a canvas tote in a bunch of colors that the industry dubbed “the Gap Bag.”

It sounds like Gap is suffering from the suffocating influence of both its creative direction and its data science, making it hard for entrepreneurial spirit to thrive among its merchants. (And it also looks like Gap has been slower to embrace the short-cycle, high-turnover model of its fast fashion competitors.) Gut feeling can still work wonders to drive sales, if a retailer has the courage to react quickly to big ideas.

And (upon further review) some more thoughts as Gap released its 2016 earnings in February:

One quarter doesn’t make a trend, but the 2% gain compares favorably to most of Gap’s competitors. In terms of merchandise content, there seems to be a renewed focus on what I would call “core basics,” which is what brought such success to Gap during the 90’s. Without ignoring the lessons of fast fashion retailers (especially in terms of speed to market and supply chain management), Gap will probably continue to gain traction if it takes a more classic approach to the business.




Zara continues to impress

From a recent RetailWire panel discussion about Zara’s ongoing growth:

Zara’s mastery of supply chain to exploit trends has long been noted, but their targeting of a fairly broad customer base less so. They seem to straddle the sweet spot between Forever 21’s focus on what used to be called the “junior” customer, and H&M’s emphasis on more wear-to-work clothes.

As to store openings — at least in the U.S. — Zara has been more deliberate than its competitors, so its comps may reflect that it is not suffering from the same square footage overload as many other omnichannel retailers right now. But — as usual — it really comes down to merchandise content.

Mall developers go vertical

There’s been a lot of comment about big mall developers (like Simon) deciding to take ownership in Aeropostale. My question (as posed on RetailWire) is whether they can really turn around the brand or simply hang onto a tenant:

The deal to salvage at least a third of Aeropostale’s stores is a sign of the times. The developers apparently don’t see a viable replacement strategy to fill this space in hundreds of regional malls. The problem facing Simon, GCP and others: This may be the beginning of a game of whack-a-mole, in which they try to rescue one failing specialty chain after another, simply to prevent too many vacancies at one time.

The bigger challenge for Aeropostale’s new owners: How to fix the business model, and provide some kind of spark to the brand’s merchandising? Aeropostale was always trailing behind American Eagle and Abercrombie (who have had their own issues), so they need a compelling strategy to make the company more competitive today.

Can Nordstrom find growth outside of its Rack expansion?

Nordstrom seemed immune from the problems plaguing the rest of the department store sector, but this is no longer the case. I posted some thoughts on RetailWire last month after the company’s earnings announcement:

If I were a JWN shareholder, I’d be happy that the company is growing the Rack business. It’s good to have a growth vehicle in light of the well-documented issues with both the traditional department store business and the near-luxury brands like Coach, Michael Kors and Ralph Lauren. And Nordstrom has always been very cautious about opening its full-line stores.

This being said, the company’s brand reputation is really built on the success of its full-line stores. I shopped my local Nordstrom on Saturday (newly opened in Milwaukee last fall) and I wonder whether a little more attention to the store’s value positioning — without hopping on Macy’s promotional carousel — might help its traffic levels and reduce its clearance levels more effectively.

And some further thoughts about how Nordstrom can grow its core business, based on its announcement about a partnership with J. Crew:

For Nordstrom, this continues a trend that already includes partnerships with Madewell and Topshop. A presence inside Nordstrom has helped these two labels create brand awareness (and benefit from the halo effect) as they build out a relatively small footprint of their own stores.

The association with J. Crew is different: This brand has been in the penalty box with its loyal fans for at least a couple of years, and it’s debatable whether its merchandise content problems have been fully addressed yet. (Plus, there is no scarcity of J. Crew locations across the country.) I see more upside for J. Crew than for Nordstrom (especially if JWN has to carve out space that could be devoted to higher-performing goods), but it puts some burden on JWN to make sure that its J. Crew shops put forward the “best of the brand.”

Are fast fashion retailers guilty of overexpansion?

An interesting RetailWire discussion about whether fast fashion retailers are discovering (just like traditional department stores) that there is too much of a good thing when it comes to square footage and store locations. Here’s my point of view:

Fast fashion retailers (especially Forever 21 and H&M) have expanded very quickly as real estate has become available during the past five years. (This includes Forever 21’s move into some vacated mall anchors.) They are probably finding — like other brick-and-mortar retailers — that there can be too much of a good thing when it comes to square footage. And some of those store openings have been in regional malls that are in decline anyway.

it doesn’t help matters — during this period of overexpansion — that fast fashion retailers are suffering from the same malaise as department stores. (Only the off-pricers seem somewhat immune right now.) Given weak demand for apparel, and the lack of a sales-driving trend, it’s tough for most fast-fashion stores to gain traction.

Primark builds out its brick-and-mortar locations

Primark (a British fast fashion chain) is expanding in the U.S., not only in vacated Sears stores but in other locations. They are in no hurry to establish a robust online presence, preferring to open stores first. Here’s my comment from a recent RetailWire discussion on the subject:

I agree that Primark has plenty of opportunity to build its brick-and-mortar footprint before worrying about the complexities of “omnichannel”…after all, it’s not as simple as just starting a website anymore. H&M is a good example of a company late to the e-commerce party while busy opening stores — and building its brand awareness — coast to coast. This isn’t Primark’s only option, but there is nothing wrong short-term with the road they are taking.