Archive for the 'Apparel retailing' Category

The impact of “activewear as sportswear”

It seems more apparent than ever that some of the “women’s apparel” problem is actually a long-term lifestyle change. RetailWire panelists discussed this in the context of Gap’s Athleta activewear division:

I was in Madison, Wisconsin last week and walked down the pedestrian mall running from the state capitol to the University. It was impossible to ignore that the vast majority of women were wearing “activewear as streetwear” — in particular, black yoga pants instead of jeans. And these were college students for whom jeans would have been “the uniform” five years ago.

On the last wave of quarterly earnings calls, most retailers complained about the lack of traction in their women’s sportswear businesses — while mentioning the rapid growth of fitness wear. It’s increasingly clear that activewear is cannibalizing more traditional women’s apparel, so Gap ought to push the growth of its Athleta brand as hard as it can for as long as this lifestyle shift continues.

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Are social media driving the speed of trends?

The short answer to my own headline question (above) is “yes,” but there is a lot more to this issue. Here’s my comment from a recent RetailWire panel discussion:

Social media may be a factor in fashion trends going Aeand moving faster. But the influence of “fast fashion” retailers (Zara, Forever 21 and others) can’t be understated. They mastered their supply chain in order to bring new goods to the selling floor a lot faster, and in order to react to early test orders in a big way. Most traditional retailers built their logistics around long lead times, especially on private-brand goods, and are scrambling to catch up.

The idea of “speed to market” requires a change in mindset — affecting supply chain management, the willingness to chase big ideas, and the ability of retailers’ vendors to move just as fast.

Macy’s reshuffles the merchant deck

Macy’s new CEO Jeff Gennette announced yesterday the hiring of a new president (with background at eBay and Home Depot) and the restructuring of its merchant organization. The company also announced plans to grow its private brand penetration from 29% to 40%. Here’s my comment from a recent RetailWire discussion:

I’ll start with this point: Growing private-brand penetration from 29% to 40% will only drive Macy’s sales if the company gets the merchandise content right. I’d argue that there are already too many private brands and lack of clarity between them, especially in women’s apparel. Macy’s execs may be able to tell the difference, but I doubt the average shopper can define what Karen Scott vs. Style & Co. vs. Charter Club (and so forth) really stand for. Let’s face it: Most stores trying to grow their private label business are doing it as a margin play, not a loyalty tool, and it’s often moved the sales needle in the wrong direction.

As to the new hires and restructuring: It’s clear that Macy’s is doubling down on omnichannel with the hiring of Mr. Lawton. It’s also clear that streamlining its merchant organization is meant to bring more speed to the decision-making process. Let’s see if the new team can tackle those “clarity of offer” problems after all.

Second quarter sales show a pulse

The stock market did not react well to most stores’ second quarter earnings, but there were hints of improvement from most retailers. My comment below (from RetailWire) focuses on Nordstrom in particular but several other stores show signs of figuring out omnichannel too:

The results of Nordstrom’s Anniversary Sale (and the “less bad” sales reports from Macy’s and Kohl’s) may point toward a stronger second half than expected. It’s too early to tell if we’re seeing a full-fledged revival of women’s apparel sales (still reported as a weak spot on Kohl’s earnings call), but the Nordstrom numbers are encouraging.

I shopped the Anniversary Sale in a couple of markets, and you’d be hard pressed to find a robust sale offering in men’s or women’s — so there must have been some traffic-driven regular-price selling in the mix. Hats off to Nordstrom for sticking to its promotional discipline, and for continuing to ride the success of its Rack and e-commerce businesses.

H&M switches to quarterly reporting

H&M is joining most other retailers in reporting comp-store sales on a quarterly basis, not monthly. I joined other RetailWire panelists in commenting on this change:

I agree that there used to be too much focus on monthly comp-sales numbers, given changes in the promotional calendar, holiday shifts from one year to the next, and weather deviations. So I understand H&M’s desire to report quarterly sales as a more accurate measure of its business trend.

On the other hand, it’s hard to conclude that the retailers who switched from monthly to quarterly reporting awhile ago saw any benefit to their sales trend. (In some cases, just the opposite.) If anything, the change has put even more spotlight on quarterly earnings rather than the long-term strategic view for many of these companies.

Is Amazon Prime Wardrobe another disruptive move?

Amazon is introducing a new feature for Prime members: Risk-free trial of several apparel items with the ability to return what you don’t like. (And price incentives to keep more of what you chose.) RetailWire panelists mostly see this as another Amazon “game changer,” but I view it a bit differently as their response to the lack of physical stores:

If Amazon aspires to be the top seller of apparel in the U.S. (and it’s already getting close), it needs to add a “try before you buy” feature to keep driving more Prime memberships. It’s responding to the challenge of concepts like Trunk Club — but it’s also acknowledging its lack of a physical footprint. Think about it — stores like Kohl’s and Macy’s already have huge numbers of brick-and-mortar locations where you can return unwanted clothing that you bought online. This may be a rare case where Amazon responds to a competitive weakness in its formula.

Why did Walmart acquire Bonobos?

In case you missed it (among the front-page coverage of Amazon and Whole Foods), Walmart acquired men’s online retailer Bonobos last week. RetailWire panelists weighed in on the pluses and minuses of the move, and here’s my take:

The news about Walmart and Bonobos was overshadowed by the Amazon headline on Friday, and understandably so because of the sheer scope and boldness of the Whole Foods acquisition. But Walmart’s news deserves some attention on its own.

This is another case where Walmart is buying a brand that offers more digital expertise and product development skill than the company appears able to build on its own. But there is a disconnect between Walmart’s brand image and the customers who are shopping Bonobos today. Chances are good that the majority of Whole Foods customers are already Amazon Prime members too. How much overlap exists between Bonobos and Walmart, and will the association with Walmart chase away Bonobos’s most loyal consumers?