LUXURY GOODS SALES ARE UP, BUT DESIGNER FLASH IS DOWN

Within the designer luxury brands market, some brands have seen increased sales while others showed decreases. While the overall market for luxury goods has grown steadily since the end of the recession, the trend for wealthy shoppers is to purchase their products in a subtle way, steering away from flashy logos.  Gucci sales were down 1.1% in 2014, Prada saw sales decrease 1.5%. Louis Vuitton/LVMH also saw sales slow in their fashion and leather goods division.

The current trend for luxury goods shoppers is to continue to purchase these goods, but show sophistication by not flaunting their wealth. Social media is also affecting the luxury brands market, as new items are becoming exposed quickly, desensitizing luxury goods shoppers to things that used to feel special to own. Smaller luxury brands like Yves Saint Laurent and Miu Miu saw 2014 gains of 27% and 4%, respectively. A professor at New York University, who teaches luxury marketing, stated, “These are brands that really control the supply, and therefore they manipulate the market and the desire for their products.”

Experts also say that high-end consumers are increasingly diverting their dollars to experiences, such as lavish vacations or extravagant dinners. To adjust to this, Louis Vuitton added a rooftop champagne bar to their Rodeo Drive store. Gucci and Prada have similar locations in Los Angeles and Las Vegas.

Source: Washington Post

RETAIL SALES DROP IN MAY

May 2015 showed a drop in retail sales by 7.6% versus May 2014. Driving the sales decline was a 9.8% decrease in store traffic and an 8.3% decrease in number of transactions.

Some metrics did show year-over-year improvement. Average transaction value rose 0.8% and sales per shopper increased 2.5%.

The highest day of selling in May was May 9, the Saturday before Mother’s Day. This day is consistently highest in sales, traffic and transaction figures. The lowest traffic and sales were at the end of the month, after the Memorial Day weekend, which was earlier on the calendar this year.

Source: Chain Store Age

FOSSIL GROUP EXECUTIVE MOVES TO VERA BRADLEY, INC., AS CMO

Vera Bradley, Inc., has hired Theresa Palermo from Fossil to be its new Chief Marketing Officer. Ms. Palermo will start at Vera Bradley on June 22.

"Theresa comes to Vera Bradley with an accomplished retail marketing background," said Vera Bradley CEO Robert Wallstrom. "She has a terrific blend of creative and analytical skills and a solid track record of building brands, engaging consumers, and driving sales through designing and executing comprehensive marketing programs. Marketing is a key focus for Vera Bradley as we work to create excitement around our brand and introduce consumers to our myriad of new products. We are anxious for Theresa to get started." 

As CMO, Palermo will be responsible for marketing strategies and initiatives that build brand awareness and revenue growth across all of Vera Bradley’s product channels.

Palermo was VP, Global Marketing and PR for Fossil Group. Prior to Fossil, she held key marketing roles with Collective Brands, The Timberland Company and the J.Jill Group.

Vera Bradley, Inc. designs women’s handbags and accessories, luggage and travel items, eyewear, stationery, gifts and baby products.

Both Fossil Group and Vera Bradley, Inc. are customers of Accelerated Analytics, using their POS and Inventory analytics and reporting tools to manage stock levels, store performance, sell thru and sales activity.

Source: Retailing Today 

WALT DISNEY WORLD RESORT’S EXPANSION OF DOWNTOWN DISNEY TO RETAIL COMPLEX DISNEY SPRINGS

The Walt Disney World resort is expanding its current Downtown Disney complex, rebranding the shopping, dining and entertainment area as Disney Springs. Downtown Disney will be transformed into Disney Springs, including four distinct outdoor neighborhoods, by 2016. The four distinct areas will have the air of Florida’s waterfront towns and will open in four phases: The Landing, Town Center, Marketplace and West Side. When completed, this will more than double the number of shopping, dining and entertainment venues from the current 70 to 150.

Fashion retailers Zara, Tommy Bahama, Lilly Pulitzer, Pandora and more are on board to join the area’s more than 1 million square feet, including 350,000 square feet of new leasable space. Sophisticated restaurants will provide experiences for families along with premium, affordable and fast fashion retailing options. Disney Springs will be a one of a kind Disney experience with beautiful open-air promenades, flowing springs and waterfront charm in Lake Buena Vista.

“Over the past few months we have opened several new dining and retail locations, which have quickly become the top producers in their chains,” said George A. Kalogridis, president of Walt Disney World Resort. “This type of momentum builds on the historical strength of the Downtown Disney area and its popularity with our guests from around the world as it evolves into Disney Springs,” he said.

Source: Retailing Today

MAY CONSUMER SENTIMENT INDEX FALLS TO 88.6

Data released Friday indicates consumers are more skeptical about the economy. May sentiment unexpectedly fell to 88.6, down from 95.9 in April and an 11-year high in January of 98.1.  Economists surveyed by the Wall Street Journal projected the May index would stand at 95.5.

"Confidence fell in early May as consumers became increasingly convinced that there would be no quick and robust rebound following the dismal (first) quarter" even if the underperformance was exaggerated by inadequate seasonal adjustments, said Richard Curtin, chief economist at Michigan's Survey of Consumers that compiles the sentiment index.

So far this year, consumers have not rushed to increase spending. Retail sales were flat in April. The one-year inflation expectations are now 2.9%, up from 2.6% in April. Consumers have chosen to save money or pay down debt.

Source: Fox Business.com

KOHL’S, DILLARD’S AND NORDSTROM’S REPORT ON Q1 RESULTS – NORDSTROM REPORTS HIGH LOYALTY PROGRAM SUCCESS

Kohl’s, Dillard’s and Nordstrom’s released Q1 sales results yesterday, on the heels of announcements of Q1 losses from JC Penney and Macy’s.

Despite launching a loyalty program and expanding advertising, Kohl’s reported weak consumer spending, but did report a gain. Kohl’s reported a profit of $127 million, up slightly from $125 million a year earlier. Sales grew 1.3% to $4.2 billion. Kohl’s operated 1,164 stores this year versus 1,160 last year. Kevin Mansell, Kohl's chairman, chief executive officer and president, said: "Sales were modestly below our original expectations for the quarter, but accelerated in the March/April combined period after a weak February. We are very pleased with our earnings results, with a more balanced promotional calendar driving merchandise margin combined with strong expense control."

Dillard’s reported Q1 sales at $109.6 million compared to $111.7 million prior year. Same store sales decreased 1%. Net sales were $1.574 billion, up 1.5% from last year. Sales were strongest in junior’s and children’s apparel, followed by shoes and ladies’ apparel. Sales were weak in the home and furniture category. The company noted that sales in Texas were below company average for Q1. "We are disappointed with our first quarter performance. Our 1% sales decline hampered our ability to leverage operating expenses and to drive net income growth," said Chief Executive William Dillard. "Although inventory is higher than we would like, we believe the levels are manageable."

Nordstrom’s also reported a drop in earnings for Q1. It reported a profit of $128 million, down from $140 million a year ago. However, Nordstrom.com and NordstromRack.com had a combined 70% increase in sales. Net sales increased 9.8% and same store sale increased 4%. Nordstrom’s loyalty program contributed greatly to its results. Members shopped 3 times more frequently and spend 4 times more on average than non-members. With 4.4 million members, sales from members increased 11% in the first quarter and represented 38% of sales.

Source: Retailing Today

BELK INC EXPLORING POSSIBLE SALE OR MERGER

Belk Inc., founded in 1888 by William Henry Belk and in the third generation of Belk family leadership, has hired Goldman Sachs to help it evaluate strategic alternatives, including a potential sale. Belk is the largest family owned department store chain in the US, valued at as much as $4 billion.

In fiscal year 2014, ending January 31, 2015, Belk posted net sales of $4.1 billion, up 1.8% compared to the previous year. After Reuters reported on the potential sale, Belk issued a statement that it had hired Goldman Sachs to help them explore all options and expect to conclude its analysis in the next several months.

US consumer spending has been slow moving this year despite lower gas prices, due to weather conditions and consumers’ desire to save. This has affected department store sales, prompting chains to resort to smaller store models and aggressive discounting.

The last major acquisition in the department store sector was Canadian chain Hudson’s Bay Co, owner of the Lord & Taylor chain, which acquired Saks in 2013 for $2.9 billion. Major department stores like Macy’s and Nordstrom are expected to be contacted by Belk to solicit their interest in a deal. Neither Goldman Sachs, Macy’s nor Nordstrom responded to requests for comment.

Belk operates 297 stores in the southern US and is based in Charlotte, North Carolina.

Source: Reuters.com

HOME DEPOT APPOINTS ITS FIRST CHIEF INFORMATION SECURITY OFFICER

Home Depot Inc. has hired Jamil Farshchi as its first CISO. He will manage information security, data protection and vulnerability management, and will report to CIO, Matt Carey.

Mr. Farshchi was CISO at Time Warner Inc., where he created a federated, risk-based security program. Prior to that, he was vice president for global information security at Visa Inc.

This announcement comes months after the home improvement retailer confirmed its payment systems were breached, resulting in stolen email and credit card information at 2,200 US and Canadian stores.

 Source: The Wall Street Journal

BELK STORES REPORTS FISCAL YEAR RESULTS AND STRATEGIC INITIATIVES

Belk, with 297 stores in 16 Southern states, announced several key strategic initiatives for this year, to include increasing their store count, remodeling other stores and improving its e-commerce fulfillment center in Jonesville, S.C.

After reporting a holiday season sales increase of 5.2%, Belk finished its fiscal year on January 31 down 7.8% in net income to $146.1 million versus $158.5 million last year. “Despite challenges early in the year, we ended FY15 with strong holiday sales and are pleased to report our fifth consecutive year of positive comparable store sales,” CEO Tim Belk said. “Although our annual earnings continue to be impacted by additional expense associated with key strategic initiatives, fourth quarter net income rose 8.3 percent on a sales increase of 5%. We are encouraged by the recent trends and believe we are well positioned for the year ahead.”

Net sales totaled $4.11 billion, up 1.8% from $4.04 billion the year before. Same store sales climbed 1.5% and saw the highest growth rate in activewear, ladies contemporary, resort and bridge fashions. Ladies suits, men’s sportswear and juniors.

Source: Retailing Today

AAFES CONDUCTS FIRST-EVER EXCHANGE IMPACT WORKSHOP TO DETAIL GO TO MARKET STRATEGIES

The Army and Air Force Exchange Service (AAFES) conducted a workshop in Dallas, detailing the Exchanges’ go to market strategy, with over 50 AAFES representatives and an audience of manufacturers, brokers, distributors and service providers. The goal of the workshop was to simplify the process of selling to AAFES.

AAFES representatives discussed store repositioning strategies and individual category breakouts including hard lines, soft lines, consumables and e-commerce. They also covered legislative and policy issues affecting military resale. The average company can take two to four years to navigate the military resale environment, but a workshop such as this one can help shorten that to a six to twelve month learning curve.

The workshop was led by AAFES Chief Merchandising Officer Ana Middleton.

Resource: Retailing Today

SWAROVSKI ALLOWS BARTERING AT ITS NEW, SPARKLING LAS VEGAS STORE

Swarovski is the centerpiece of Las Vegas’ newest retail destination, Grand Bazaar Shops. To keep with the Grand Bazaar theme, Swarovski has opened their first-ever “bartering window”, allowing shoppers to negotiate the price they pay for select items. Most items to be found in the bartering window are limited edition items such as crystallized Beats Headphones and black and pink skulls. Inside the store is a large video screen with scenes from exotic bazaars, alongside specially crafted panels as platforms to display their jewelry and décor.

Outside, the store is designed to look like a cut crystal. Towering above the store is a 14 foot diameter starburst made of 911 custom-cut Swarovski crystals. The tower puts on a three minute light show every night at midnight, choreographed to music.

Source: Chain Store Age