Dow Jones Newswires
By Karen Talley
Nordstrom Inc. is looking at expanding into Canada as a way of extending its luxury department stores beyond the U.S.
The retailer is scouting a number of sites, feeling demand should be significant enough to make the endeavor successful.
"We already know we have a lot of Canadian customers," Nordstrom spokesman Colin Johnson said. The retailer, whose Seattle headquarters isn't too far from Canada's border, has Canadian customers who shop its stores when they visit the U.S., Johnson said. Also, Canadians make up the biggest share of Nordstrom's international online customers.
So far, it's been "tough to find a location where everything will come together," Johnson said. He didn't give a timeframe when Nordstrom might make a formal announcement, but did say the company would start with department stores before opening any Nordstrom Rack outlets in the country.
Johnson also said Nordstrom knows that there are challenges, including a lot of established retailers in the country and in regard to customers "we would have to work hard to earn their business."
Nordstrom would be the latest U.S. retailer to announce plans to enter Canada if it does find locations. Target Corp. plans to start operating in the country in the next couple of years through its acquisition of the leases of up to 220 Zellers stores owned by Hudson Bay Co.
Wal-Mart Stores Inc., Sears Holding Corp., Costco Wholesale Corp. and Marshall's and T.J. Maxx operator TJX Cos. have been in Canada for some time. But they are largely the exceptions. Many U.S. retailers, despite the close proximity, don't have stores in Canada.
Retail spending per capita for Canada and the U.S., expressed in U.S. dollars, are now equal, a new report by Colliers International said. As recently as 2004, Canadians' retail sales per capita was $8,000, while Americans' spending power was 50% higher, at about $12,000 per capita.
Aside from tapping a fresh group of consumers, one of the most compelling reasons for U.S. retailers to operate in Canada is the value of the Canadian dollar compared with the U.S. dollar, Colliers said. With a stronger Canadian dollar, it becomes increasingly worthwhile to establish Canadian stores rather than to sell only to Canadian customers who shop online or on cross-border trips, Colliers said. For some U.S. retailers, Canada is the largest, closest and or most similar market to the U.S., and represents a logical next move.
Canadian retailers also haven't had to resort to the kinds of mark-downs that their U.S. counterparts are engaging in. As a result, U.S. retailers could earn a greater return on their merchandise, which can serve as another incentive. U.S. companies will, however, face established Canadian retailers that have a loyal following, so they can expect to engage in plenty of marketing and executive time as they try to familiarize themselves with residents.
Showing posts with label Nordstrom. Show all posts
Showing posts with label Nordstrom. Show all posts
Thursday, May 26, 2011
Wednesday, May 25, 2011
Neiman Marcus Launches Rachel Zoe Designer Line
From WWD Issue 05/26/2011
When Rachel Zoe heard the long list of retailers that ordered her first collection for fall, she went numb.
“It was this dream that I never thought would be reality because I was petrified — I was,” she recalled. “I feel so complete now becoming a designer and having my son. I’m that happiest that I’ve ever been in my life.”
No wonder. Nordstrom, Saks Fifth Avenue, Bloomingdale’s, Intermix, Selfridges, Kirna Zabête and Shopbop.com have purchased her label, Zoe said, though she has “no clue” what annual sales might be for the Li & Fung licensed brand.
Neiman Marcus is launching the celebrity stylist’s sportswear, handbags and shoes in July at all 41 doors plus online and at Bergdorf Goodman. The rollout across the entire Neiman Marcus Group is a rare endorsement of a fledgling brand.
Neiman’s backing is what brought her to a board room of the Ritz-Carlton hotel in Dallas with Mandana Dayani, her vice president, general counsel and chief wrangler, and Ken Downing, senior vice president and fashion director of Neiman Marcus.
“She is a real talent,” Downing said. “She understands the customer and she’s brought an effortless chic to the collection. The clothes are going to appeal to women of many ages. And, she’s got an amazing name.”
Downing gave her considerable guidance, convincing her “not to be afraid of color and prints” and to evaluate fabric weight and bulk, Zoe noted.
Dressed in a Rachel Zoe cream wool crepe tank dress with black velvet stripes, the celebrity stylist was calm, poised and free of both a camera crew and the frenetic quality that defines her on “The Rachel Zoe Project,” which begins broadcasting its fourth season on Bravo in July. Maybe that’s because she gave birth March 24 to a son, Skyler Morrison Berman. Now, she’s juggling motherhood with her demanding schedule by “really focusing” and not wasting time.
“Like, now I do 10 things at a time instead of four,” Zoe said.
Next up: fashion jewelry for fall 2012. “I wish it were for spring,” she said wistfully. “I am dying to do jewelry. I’m gagging.”
Saturday, May 14, 2011
Nordstrom's Profit Rises 25%
Wall Street Journal
By Joan E. Solsman
Nordstrom Inc. reported a 25% increase in fiscal-first-quarter earnings on higher sales, while lowering its full-year outlook due to acquisition-related charges.
The company was the first mainstream retailer to make an acquisition to enter the online "flash sale" realm when it agreed in February to buy HauteLook Inc. for as much as $270 million in stock.
Flash-sale sites like HauteLook represent a small but growing segment of the luxury market that offers fashion items in limited-time sales to members, often at a discount.
Nordstrom on Thursday cut its full-year earnings outlook by 15 cents to $2.80 a share.
For the quarter ended April 30, the Seattle-based upscale retailer posted a profit of $145 million, or 65 cents a share, up from $116 million, or 52 cents a share, a year earlier. The latest results included four cents a share in charges from the HauteLook acquisition.
Total revenue, which includes credit-card revenue, increased 11% to $2.32 billion. Earlier this month, Nordstrom said retail sales at stores open at least a year rose 6.5% during the quarter.
Gross margin was flat at 40.4%
The top-performing merchandise categories included jewelry, designer items and men's apparel. Dresses and shoes had been top-performing categories all through 2010.
During the economic downturn, the luxury sector bulked up in lower-priced retailing as demand for top-tier products slumped. Nordstrom increased its off-price footprint with its Rack clearance division.
While in recent quarters customers have returned to buying full-priced merchandise, Nordstrom has continued to open new Rack locations at a strong pace as the economy recovers. This year, Nordstrom plans for nearly two-thirds of new-store square footage to be Rack stores, though the larger namesake stores still outnumber them.
In the latest period, Rack division sales rose 20% while same-store sales climbed 1.2%.
By Joan E. Solsman
Nordstrom Inc. reported a 25% increase in fiscal-first-quarter earnings on higher sales, while lowering its full-year outlook due to acquisition-related charges.
The company was the first mainstream retailer to make an acquisition to enter the online "flash sale" realm when it agreed in February to buy HauteLook Inc. for as much as $270 million in stock.
Flash-sale sites like HauteLook represent a small but growing segment of the luxury market that offers fashion items in limited-time sales to members, often at a discount.
Nordstrom on Thursday cut its full-year earnings outlook by 15 cents to $2.80 a share.
For the quarter ended April 30, the Seattle-based upscale retailer posted a profit of $145 million, or 65 cents a share, up from $116 million, or 52 cents a share, a year earlier. The latest results included four cents a share in charges from the HauteLook acquisition.
Total revenue, which includes credit-card revenue, increased 11% to $2.32 billion. Earlier this month, Nordstrom said retail sales at stores open at least a year rose 6.5% during the quarter.
Gross margin was flat at 40.4%
The top-performing merchandise categories included jewelry, designer items and men's apparel. Dresses and shoes had been top-performing categories all through 2010.
During the economic downturn, the luxury sector bulked up in lower-priced retailing as demand for top-tier products slumped. Nordstrom increased its off-price footprint with its Rack clearance division.
While in recent quarters customers have returned to buying full-priced merchandise, Nordstrom has continued to open new Rack locations at a strong pace as the economy recovers. This year, Nordstrom plans for nearly two-thirds of new-store square footage to be Rack stores, though the larger namesake stores still outnumber them.
In the latest period, Rack division sales rose 20% while same-store sales climbed 1.2%.
Friday, May 13, 2011
Nordstrom Earnings Climb 24 Percent in Quarter
by David Moin and Mina Williams with contributions from Arnold J. Karr
From WWD Issue 05/13/2011
Nordstrom Inc., fueled by strong sales highest in men’s, designer and jewelry categories, on Thursday reported first-quarter earnings rose 24 percent to $145 million, or 65 cents a diluted share.
That compares with net earnings of $116 million, or 52 cents, in last year’s quarter. The results included charges of 4 cents a share due to the March acquisition of the HauteLook membership-only flash sale Web site for $180 million in stock.
First-quarter same-store sales increased 7.8 percent, while net sales increased 12 percent to $2.23 billion. Stores in the South and Midwest were top performers.
The direct channel outpaced the overall Nordstrom increase. Nordstrom Rack outlets were up 1.2 percent on a same-store basis.
The Seattle-based upscale chain exceeded Wall Street expectations and met the high end of its own internal plans. But the stock dropped 1.8 percent, or 87 cents, to $48.30 after the company adjusted its year-end forecast down to $2.80 to $2.95 from previous guidance of $2.95 to $3.10, due to the purchase of HauteLook, which should break even this year. Same-store sales are seen increasing 2 to 4 percent for the year.
“We’re off to a good start in 2011,” said president Blake Nordstrom during a conference call. “We are continuing with comp-store increases and earnings growth.”
“Designer really across the board for us has been excellent,” added Pete Nordstrom, president of merchandising, who cited dresses and contemporary styles as among the standouts. “We are selling bridge to upper-priced products really well.…Our customer clearly tells us they prefer to buy new, full-price merchandise [rather] than old discounter merchandise.”
Men’s wear, he added, is making up for lost ground in recent years and “could be the biggest growth factor.” With full price selling going well, there will be less merchandise for Nordstrom’s anniversary sale in July, which is a huge volume generator. However, the “Encore” large size category has not been as robust as other categories, Pete Nordstrom noted.
Nordstrom could make some bold moves this year, including announcing full-line locations in Manhattan and Canada, where the company is aggressively eyeing sites. It has not given any timetable for possible announcements.
In Manhattan, Nordstrom is eyeing the West Side, specifically the Hudson Yards mixed-use project under development between 30th and 33rd Streets and 10th Avenue and the West Side Highway, and 3 Columbus Circle, an office building that could be demolished and converted to retail space. In Canada, Nordstrom is considering Toronto or Vancouver, but sites are not easy to come by.
Among the moves that are in the works this year, and cited by executives at the company’s annual meeting Tuesday and during the conference call:
• By July, 5,000 to 6,000 associates (and “significantly more” by year end) will have mobile devices to check out customers paying by credit card so they can avoid lines. Handheld devices will also help associates communicate with customers even when they’re in dressing rooms and search for items that could be out-of-stock on premises but elsewhere in the chain. IPads are being used to show customers merchandise that may not be in the store but is available for home delivery, and e-mail receipts are also being sent out.
• Nordstrom will more than double its personal stylists to 985 chainwide this year.
• Three full-line units and 18 Racks will open this year.
• At 350 West Broadway, in Manhattan’s SoHo neighborhood, Nordstrom will open this fall a small store purely for charity, called Treasure & Bond.
The $9.3 billion Nordstrom ended the first quarter with $1.4 billion in cash and will make much of it available to enhance systems, stores and service.
From WWD Issue 05/13/2011
Nordstrom Inc., fueled by strong sales highest in men’s, designer and jewelry categories, on Thursday reported first-quarter earnings rose 24 percent to $145 million, or 65 cents a diluted share.
That compares with net earnings of $116 million, or 52 cents, in last year’s quarter. The results included charges of 4 cents a share due to the March acquisition of the HauteLook membership-only flash sale Web site for $180 million in stock.
First-quarter same-store sales increased 7.8 percent, while net sales increased 12 percent to $2.23 billion. Stores in the South and Midwest were top performers.
The direct channel outpaced the overall Nordstrom increase. Nordstrom Rack outlets were up 1.2 percent on a same-store basis.
The Seattle-based upscale chain exceeded Wall Street expectations and met the high end of its own internal plans. But the stock dropped 1.8 percent, or 87 cents, to $48.30 after the company adjusted its year-end forecast down to $2.80 to $2.95 from previous guidance of $2.95 to $3.10, due to the purchase of HauteLook, which should break even this year. Same-store sales are seen increasing 2 to 4 percent for the year.
“We’re off to a good start in 2011,” said president Blake Nordstrom during a conference call. “We are continuing with comp-store increases and earnings growth.”
“Designer really across the board for us has been excellent,” added Pete Nordstrom, president of merchandising, who cited dresses and contemporary styles as among the standouts. “We are selling bridge to upper-priced products really well.…Our customer clearly tells us they prefer to buy new, full-price merchandise [rather] than old discounter merchandise.”
Men’s wear, he added, is making up for lost ground in recent years and “could be the biggest growth factor.” With full price selling going well, there will be less merchandise for Nordstrom’s anniversary sale in July, which is a huge volume generator. However, the “Encore” large size category has not been as robust as other categories, Pete Nordstrom noted.
Nordstrom could make some bold moves this year, including announcing full-line locations in Manhattan and Canada, where the company is aggressively eyeing sites. It has not given any timetable for possible announcements.
In Manhattan, Nordstrom is eyeing the West Side, specifically the Hudson Yards mixed-use project under development between 30th and 33rd Streets and 10th Avenue and the West Side Highway, and 3 Columbus Circle, an office building that could be demolished and converted to retail space. In Canada, Nordstrom is considering Toronto or Vancouver, but sites are not easy to come by.
Among the moves that are in the works this year, and cited by executives at the company’s annual meeting Tuesday and during the conference call:
• By July, 5,000 to 6,000 associates (and “significantly more” by year end) will have mobile devices to check out customers paying by credit card so they can avoid lines. Handheld devices will also help associates communicate with customers even when they’re in dressing rooms and search for items that could be out-of-stock on premises but elsewhere in the chain. IPads are being used to show customers merchandise that may not be in the store but is available for home delivery, and e-mail receipts are also being sent out.
• Nordstrom will more than double its personal stylists to 985 chainwide this year.
• Three full-line units and 18 Racks will open this year.
• At 350 West Broadway, in Manhattan’s SoHo neighborhood, Nordstrom will open this fall a small store purely for charity, called Treasure & Bond.
The $9.3 billion Nordstrom ended the first quarter with $1.4 billion in cash and will make much of it available to enhance systems, stores and service.
Tale Of Lost Diamond Adds Glitter To Nordstrom's Customer Service
Seattle Times
By Amy Martinez
It's Nordstrom legend that when a customer in Fairbanks, Alaska, wanted to return two tires bought a while ago from another store on the same site, a sales clerk looked up their price and gave the man his money back.
True or not, it's considered an example of Nordstrom's no-questions-asked return policy and the lengths to which it will go to please customers.
A new customer-service story may take its place:
A woman in North Carolina recently lost the diamond from her wedding ring while trying on clothes at a Nordstrom store. A store security worker saw her crawling on the sales floor under the racks. He asked what was going on, then joined the search.
After they came up empty, the employee asked two building-services workers to join the search. They opened up the bags of the store's vacuum cleaners, where they found the shiny diamond.
Nordstrom showed a video clip featuring the shopper, identified as Mrs. Shaw, and the three workers at its annual shareholders meeting Wednesday in downtown Seattle.
A main theme of the hourlong meeting was Nordstrom's efforts to cater to customers both in-store and online.
"I've never been through a vacuum-cleaner bag. It's kind of disgusting," said President of Stores Erik Nordstrom, before introducing the three employees to shareholders. "This raises the bar."
Taking a cue from Apple, Nordstrom also announced plans to put about 5,000 mobile checkout devices into workers' hands at 116 full-line clothing stores by the start of its Anniversary Sale in July.
President Blake Nordstrom said salespeople will use the Internet-connected devices to hunt for out-of-stock merchandise or complete credit-card transactions without making customers wait in line for a cash register.
The company has been testing the devices at its downtown Seattle and Bellevue Square stores.
Separately, the company is stepping up its efforts to expand its footprint beyond the United States. Blake Nordstrom said it has been looking in Canada, including Toronto and Vancouver, for new store sites, but finding "the right locations is a challenge."
"There isn't the building or the space," he said. "Hopefully a year from now, we'll have something to announce."
Nordstrom has 211 stores in the U.S., including 92 off-price Rack locations. It dipped its toes overseas in 2009 when it began shipping Internet orders to 30 countries and enabled online customers to make purchases in foreign currencies.
Also in 2009, the company announced plans to open a store in San Juan, Puerto Rico, possibly in 2013 or 2014.
A few other tidbits from Wednesday:
• Nordstrom will call a new philanthropic-based concept store in New York's Soho district "Treasure & Bond."
The store, to open this fall, will donate its profits to charity. Although it will not carry the Nordstrom name, it lays the groundwork for a Manhattan flagship, analysts say. Nordstrom opened a Rack store in Lower Manhattan last year.
• Nordstrom is making new efforts to personalize customer service. It has 985 personal stylists in stores, up from 459 a year ago, and plans to have 18 in-store bridal boutiques by the end of the year.
• Nordstrom and Fossil Group together sold 702,000 watches last year. Texas-based Fossil, which makes watches under its own name as well as other labels, was picked by Nordstrom as one of two top vendors of 2010. Nordstrom's other top vendor was European menswear label Hugo Boss.
The company, which employs about 3,200 at its Seattle headquarters, last week posted a 6.5 percent increase in first-quarter same-store sales, a sign its affluent customer base is spending more freely again after a sharp pullback during the recession.
Sales at stores open more than a year, called same-store sales, are a key gauge of a retailer's performance because they exclude store openings and closures.
Blake Nordstrom also hinted that more changes are on the way for the fast-growing e-commerce business. He noted Nordstrom has more than $1 billion in cash and can invest in new technology.
"We're not trying to be Amazon, but I think there are learnings there," he said, referring to the Seattle Internet giant. He added he hopes to look back on 2011 as the year Nordstrom "got behind what it took to be best of class online."
Nordstrom will report its first-quarter earnings after the markets close Thursday. Its stock ended Wednesday up 44 cents, about 1 percent, at $48.70, near the top end of a 52-week trading range of between $28.44 and $49.43.
Thursday, April 21, 2011
Nordstrom Said Eyeing Hudson Yards
From WWD Issue 04/21/2011
Nordstrom Inc. is eyeing the massive Hudson Yards project under development on the far west side of Manhattan where it could open its first full-line store in the city.
After years of combing Manhattan for a site and considering a number of alternatives, the Seattle-based department store chain is “looking at the potential of Hudson Yards,” said a source. “They’re in discussions with Related Cos.,” developer of Hudson Yards, a 26-acre commercial and residential project to be built over the rail yards near the Hudson River located between 30th and 33rd Streets and 10th Avenue and the West Side Highway.
“It’s fair to say they’re interested and considering it, but nowhere close to any kind of deal or commitment,” the source added.
Nordstrom is also considering other sites in Manhattan, but Hudson Yards seems like its best bet given the enormity of the project and its ability to provide Nordstrom’s space requirements of at least 180,000 to 200,000 square feet, a parcel extremely difficult to find in Manhattan, particularly in an area dense with upscale shoppers.
Nordstrom also has transportation requirements and wants to be near subways and major thoroughfares. The 7 subway line is being extended with a new station on 34th street and 11th avenue that will be at the front door to Hudson Yards. There is also a proposal to convert the Farley Post Office into the new Moynihan Station for Amtrak, which would feed more traffic to the area. In addition, Hudson Yards is located at the northern terminus of the new High Line park.
Store executives are also concerned about the economics of opening in Manhattan, including construction, operations and labor costs, but most probably could get some enticing incentives from Related involving sharing some capital expenditures.
“While we don’t comment on specific conversations with tenants, we have seen significant interest from retail and office tenants for the Hudson Yards,” said Joanna Rose, vice president, corporate communications and public affairs, Related Cos. “Progress on the development continues and we are looking forward to delivering our first tower and ideally the retail complex in 2015, providing that conversations are converted to contracts this year.”
Related has been seeking a department store anchor for Hudson Yards, which would be critical as a magnet to lure smaller specialty tenants and fill the planned mall on the location. Related was recently spurned by Bloomingdale’s for the project because store executives were not keen on the location, although for years they have pondered the idea of opening a unit on the West Side, even before Bloomingdale’s opened its scaled-down unit in SoHo in 2004.
With Related’s Shops at Columbus Circle in the Time Warner Center seen as a growing success, certain retailers are likely to bet on the Hudson Yards project. Since the opening of the Time Warner Center, there has been a steady influx of higher grade retailing to the vicinity, including Apple, Burberry, Brooks Brothers and Uggs. The Hudson Yards project will have a similar construction as Time Warner shops, with its curved front.
Nordstrom, as well as Kohl’s and Target, have been among the retailers scouting the West Side and Columbus Circle areas. But Kohl’s and Target might be considered too down market for Hudson Yards, which is expected to look for a higher grade anchor to lure upscale specialty retailers such as J. Crew or Coach.
Nordstrom considered a building at 1775 Broadway, which is an office tower just south of the Time Warner Center. The site also carries the address 3 Columbus Circle.
But the closest Nordstrom came to landing a Manhattan site was the former Drake Hotel space, on Park Avenue between 56th and 57th streets. A nonbinding letter of intent was signed, but Nordstrom rescinded it in 2008. It’s possible the retailer is still examining that spot. One big issue was whether the store would have a 57th street entrance.
Over the years, Nordstrom also looked at the Lord & Taylor flagship; the 34th street area in the vicinity of Pennsylvania Station; Madison Avenue in the 50s; 200 Fifth Avenue in the Flatiron area; an office building on the southwest corner of 58th street and Madison Avenue, and the corner of 42nd street at Sixth Avenue.
So far the retailer has had to settle for a Rack outlet that opened last spring in Union Square.
Related expects to open its first office tower in Hudson Yards, along with some retailing, in 2016 or 2017 and is seeking major office tenants. Ultimately, under the master plan, there will be 14 towers, 5,000 residential units, a cultural center, a hotel, a school, lots of green space, an underground infrastructure servicing the entire community, as well as retail.
The site is divided into two sections: Hudson Yards East and West with 11th Avenue in the middle. Phase 1 is on the east side of the avenue. The project is estimated to cost $15 billion and occupy 12 million square feet. Construction could commence next year.
Hudson Yards is the largest undeveloped single piece of property in Manhattan.
Oxford Properties Group, the real estate investment and development arm of the OMERS Worldwide group of companies, is partnering with Related on the development and jointly signed a contract with the Metropolitan Transportation Authority for the development rights at the Hudson Yards.
Monday, April 18, 2011
Fragrance Spritzers Hold Their Fire
By Catherine Saint Louis
Published: April 15, 2011
Department stores are changing their approach to make the fragrance counter more welcoming.
Although The New York Times is charging for some of their content, readers coming through links from search engines, blogs and LinkedIn will be able to read any article without restriction.
Click here to read the entire article at www.nytimes.com:
Fragrance Spritzers Hold Their Fire
Saturday, April 16, 2011
Nordstrom Bids Farewell To In-Store Piano Players
Most people pay scant attention to the lilting elevator music that wafts through most department stores. Intended to be soothing, unobtrusive and barely there, the music functions more or less as aural wallpaper. One of the big exceptions has been Nordstrom, the high-end department store that has traditionally employed piano players to perform live for shoppers — a modest touch of class in a world of soulless muzak.
But Nordstrom has been gradually cutting back on its in-store pianists in recent years. The Nordstrom store at Brea recently laid off many if not all of its piano players — an in-store manager declined to comment — while the store at South Coast Plaza in Costa Mesa also has terminated a number of people from its musical team. Some newer Nordstrom stores lack pianos altogether. Last year, the Orange County Register reported that the new Nordstrom at Fashion Island in Newport Beach opened without a piano.
Ron Kobayashi, who was a pianist at the Nordstrom at South Coast Plaza and Brea, said in an email that he was laid off from both locations after more than 20 years of service. He said that he was called into a meeting this week and was given the boot with no notice. "The piano is one of the things that sets Norstrom apart. To get rid of that branding is baffling," he said by phone.
Nordstrom has traditionally hired its pianists part time, with many performing one or two days a week. The repertoire is varied, but pianists tend to perform a mix of jazz, Broadway tunes and pop.
Joaquin Nunez, a manager at the Nordstrom at South Coast Plaza, said that the reduction in piano players at his location was a practical matter. He said that the company operates in a decentralized way and that it is up to individual stores to decide whether to employ pianists.
The Nordstrom at South Coast Plaza continues to employ pianists, but they will appear mainly for special occasions.
A spokesman for Nordstrom said in a statement that the company has "learned that most customers like the energy and environment that a more contemporary, recorded music offering helps create."
The spokesman also said the company is "not getting rid of pianos in our stores completely, but the fact is that most of our stores across the country don't feature a piano... We’re really sorry if some of these changes may disappoint some of our customers."
Wednesday, April 13, 2011
Retail Sales in U.S. Rose in March for Ninth Straight Month
By Shobhana Chandra
Sales at U.S. retailers rose in March for a ninth consecutive month, showing the improving job market is helping Americans cope with higher costs for fuel and food.
Purchases increased 0.4 percent following a 1.1 percent February gain that was larger than previously estimated, Commerce Department figures showed today in Washington. The median forecast of 82 economists surveyed by Bloomberg News was a 0.5 percent rise. Sales excluding automobiles and gasoline advanced more than projected.
Declining unemployment and a cut in payroll taxes for 2011 are helping sustain sales at chains like Macy’s Inc. and Saks Inc. At the same time, mounting gasoline and grocery bills are eroding confidence and pinching wallets, making it likely consumer spending, the biggest part of the economy, cooled in the first quarter from the final three months of 2010.
“The consumer was more resilient in March than some of our concerns,” said John Herrmann, a senior fixed-income strategist at State Street Global Markets LLC in Boston. “Improving labor- market conditions are helping support consumption. This is a very impressive pace of spending, with gains across a diverse range of products.”
Stock-index futures held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in June rose 0.7 percent to 1,317.7 at 8:46 a.m. in New York. Treasury securities fell, sending the yield on the benchmark 10-year note up to 3.54 percent from 3.49 percent late yesterday.
Survey Results
Retail sales were projected to rise after a 1 percent gain previously reported for February, according to the Bloomberg survey. Economists’ estimates ranged from a drop of 0.5 percent to a 2 percent gain.
Sales excluding automobiles and service stations climbed 0.6 percent, exceeding the 0.5 percent median forecast of economists surveyed. The February reading was revised up to 0.9 percent from a previously estimated 0.6 percent increase.
Ten of 13 major categories showed gains last month, led by the biggest increase in furniture demand since 2004 and the largest advance in sales of electronics in a year.
Filling station sales climbed 2.6 percent. Higher gasoline prices contributed to the projected gain in retail sales, which include purchases at filling stations and aren’t adjusted for inflation.
Gasoline Prices
The cost of regular fuel averaged $3.54 a gallon in March, up from $3.18 the prior month, according to AAA, the nation’s biggest motoring organization. The price jumped to $3.79 a gallon on April 11, the highest since September 2008.
Sales fell 1.7 percent at automobile dealers, today’s report showed. That’s consistent with industrywide light-vehicle sales, which ran at a seasonally adjusted annual rate of 13.1 million in March, down from 13.4 million the prior month, according to researcher Autodata Corp.
Nonetheless, auto demand has improved from last year. Sales at Dearborn, Michigan-based Ford Motor Co. climbed 16 percent in March from the same time in 2010, outpacing Detroit-based General Motors Co.’s 9.6 percent gain.
“We continue to see good, solid signs of progress despite some of the challenges,” Don Johnson, GM’s vice president of U.S. sales operations, said on an April 1 conference call. “A recovering job market is going to be the most important factor for the U.S. economy at this stage, and we do anticipate that this is going to continue to improve.”
More Jobs
The economy created 216,000 jobs in March, the most since May 2010, while the jobless rate fell for a fourth straight month to a two-year low of 8.8 percent, Labor Department data showed April 1.
Purchases excluding autos increased 0.8 percent, today’s report showed. They were projected to rise 0.7 percent.
Excluding autos, gasoline and building materials, which are the figures used to calculate gross domestic product, sales rose 0.4 percent after a 1.1 percent increase the prior month that was almost twice as large as previously estimated.
Industry reports last week showed stores fared better than forecast. Retailers’ sales at stores open at least a year rose 2.2 percent from March 2010, while the average projection was for a 0.5 percent drop, according to Retail Metrics Inc. Analysts projected a decrease because an early Easter in 2010 had pulled sales into March that would normally have taken place in April.
Cincinnati-based Macy’s, the second-largest U.S. department- store chain, reported same-store sales rose, while analysts forecast a decline. Luxury retailers Saks, Nordstrom Inc. and Neiman Marcus Group Inc. also topped estimates.
Customers Struggling
Wal-Mart Stores Inc., the world’s biggest retailer, is among chains saying customers are feeling the pinch from rising fuel expenses.
“We still see our customer financially strapped,” Rosalind Brewer, president of the Bentonville, Arkansas-based company’s Wal-Mart East division, said in an investor presentation on April 12. We see the shopper’s “wallet being stretched a lot more.”
Federal Reserve officials noted in minutes of their March 15 meeting that “while participants expected that household spending would continue to expand, the pace of expansion was uncertain.”
Tuesday, April 12, 2011
Luxury Retailers Stand To Continue Producing Strong Numbers
Wall Street Journal
By Karen Talley
Upper-end retailers, like Saks Inc. and Neiman Marcus Group Inc., saw their fortunes dinged by the recession, but they were the first to bounce back and their lead is likely to continue.
Luxury customers, while thrown by the economic downturn, held onto their jobs to a greater degree than lower-income consumers, government data show. As a result, the effect on the upper end was more psychological as they hunkered down, but were hardly destitute.
"During the recession, people, shoppers at the high end still had money, but there was embarrassment," said Barbara Kahn, director of the Jay Baker Retailing Center at the University of Pennsylvania's Wharton School. "Now, we're in a recovery where there is less of a patina."
There is also greater wealth as the stock market has mounted a significant recovery.
"The strength of our business--luxury--is typically tied to how our customers feel about their personal financial situations," said Julia Bentley, spokeswoman for Saks. "The financial markets are a good barometer of this."
But customers are not in a freewheeling mood. "They remain very discriminating in their purchases," Bentley said. "They are responding to special, differentiated products" and a more personalized shopping experience.
Some luxury retailers also say they have not really seen a return of the "aspirational" customer--someone that wants to be associated with the upper-end but pulled in their horns during the recession. Mark Aaron, spokesman for Tiffany & Co. (TIF), cited softness in "entry-level price point silver jewelry." For some consumers, "The environment may be too difficult for them to make that modest investment," Aaron said.
The still-restrained approach to spending and an aspirational customer that remains relatively scarce could produce a bump when they do open their wallets and add to the spending the luxury retailers are already seeing. As a result, higher-end retailers like Tiffany, Saks, Nordstrom Inc., Coach Inc. and Neiman Marcus, some of which had very dark days a couple of years ago, stand to continue delivering solid sales.
For March, the latest available period, same-store sales gains were 11.1% for Saks; 5.1% for Nordstrom; and 7% for Neiman Marcus, which includes its Bergdorf Goodman stores. For more mainstream retailers, Kohl's Corp. showed a 6.5% decline in comparable-store sales; J.C. Penney Co. a 0.3% drop; and Target Corp. a 5.5% fall, all off of declines the prior year.
"In the middle market, employment is getting better, but more slowly," Kahn said.
Middle-class consumers are also facing higher prices because of the greatly increased cost of cotton and higher labor and transportation costs. Those factors could continue making that group reluctant to spend.
A number of higher-end retailers, while facing the same forces, say they don't expect to be hit as hard because their merchandise has more embellishments, which can equate to less use of cotton. They also aren't mass merchants, buying, for instance, cotton tee-shirts in bulk, and having to charge their customers higher prices.
There are, however, some potential stumbling blocks for luxury retailers that most mainstream stores are likely to duck. The earthquakes and tsunami in Japan are crimping tourism to and from that country, cutting out a solid revenue source for many upper end retailers.
There is also discussion of raising taxes for the wealthy to help fund raising the debt ceiling--the limit on how much the U.S. government can borrow. The move could crimp upper-end and aspirational buying.
"When the government intervenes and decides to raise, taxes it will impact discretionary spending," said Michael Londrigan, head of fashion merchandising at LIM College, which teaches business courses in retailing.
But the setbacks may not be too severe. "Right now, you're seeing luxury shoppers carrying two, three bags instead of one, and I see that happening for some time," Londrigan said.
By Karen Talley
Upper-end retailers, like Saks Inc. and Neiman Marcus Group Inc., saw their fortunes dinged by the recession, but they were the first to bounce back and their lead is likely to continue.
Luxury customers, while thrown by the economic downturn, held onto their jobs to a greater degree than lower-income consumers, government data show. As a result, the effect on the upper end was more psychological as they hunkered down, but were hardly destitute.
"During the recession, people, shoppers at the high end still had money, but there was embarrassment," said Barbara Kahn, director of the Jay Baker Retailing Center at the University of Pennsylvania's Wharton School. "Now, we're in a recovery where there is less of a patina."
There is also greater wealth as the stock market has mounted a significant recovery.
"The strength of our business--luxury--is typically tied to how our customers feel about their personal financial situations," said Julia Bentley, spokeswoman for Saks. "The financial markets are a good barometer of this."
But customers are not in a freewheeling mood. "They remain very discriminating in their purchases," Bentley said. "They are responding to special, differentiated products" and a more personalized shopping experience.
Some luxury retailers also say they have not really seen a return of the "aspirational" customer--someone that wants to be associated with the upper-end but pulled in their horns during the recession. Mark Aaron, spokesman for Tiffany & Co. (TIF), cited softness in "entry-level price point silver jewelry." For some consumers, "The environment may be too difficult for them to make that modest investment," Aaron said.
The still-restrained approach to spending and an aspirational customer that remains relatively scarce could produce a bump when they do open their wallets and add to the spending the luxury retailers are already seeing. As a result, higher-end retailers like Tiffany, Saks, Nordstrom Inc., Coach Inc. and Neiman Marcus, some of which had very dark days a couple of years ago, stand to continue delivering solid sales.
For March, the latest available period, same-store sales gains were 11.1% for Saks; 5.1% for Nordstrom; and 7% for Neiman Marcus, which includes its Bergdorf Goodman stores. For more mainstream retailers, Kohl's Corp. showed a 6.5% decline in comparable-store sales; J.C. Penney Co. a 0.3% drop; and Target Corp. a 5.5% fall, all off of declines the prior year.
"In the middle market, employment is getting better, but more slowly," Kahn said.
Middle-class consumers are also facing higher prices because of the greatly increased cost of cotton and higher labor and transportation costs. Those factors could continue making that group reluctant to spend.
A number of higher-end retailers, while facing the same forces, say they don't expect to be hit as hard because their merchandise has more embellishments, which can equate to less use of cotton. They also aren't mass merchants, buying, for instance, cotton tee-shirts in bulk, and having to charge their customers higher prices.
There are, however, some potential stumbling blocks for luxury retailers that most mainstream stores are likely to duck. The earthquakes and tsunami in Japan are crimping tourism to and from that country, cutting out a solid revenue source for many upper end retailers.
There is also discussion of raising taxes for the wealthy to help fund raising the debt ceiling--the limit on how much the U.S. government can borrow. The move could crimp upper-end and aspirational buying.
"When the government intervenes and decides to raise, taxes it will impact discretionary spending," said Michael Londrigan, head of fashion merchandising at LIM College, which teaches business courses in retailing.
But the setbacks may not be too severe. "Right now, you're seeing luxury shoppers carrying two, three bags instead of one, and I see that happening for some time," Londrigan said.
Thursday, April 7, 2011
Mary-Kate and Ashley Olsen to Launch Digital Fashion Venture
From WWD Issue 04/07/2011
Mary-Kate and Ashley Olsen are going digital with their newest fashion venture.
In July, the entrepreneurs will launch StyleMint.com, in partnership with Santa Monica, Calif.-based BeachMint Inc., a company headed by Josh Berman, one of the original founders of MySpace.
StyleMint will meld e-commerce and social media platforms to offer consumers a personalized shopping experience, based on a monthly opt-out model, similar to book-, music- and wine-of-the-month clubs. Mary-Kate and Ashley Olsen will help design and merchandise the offerings — starting with a collection of women’s fashion T-shirts retailing for $29.99 — as well as create regular videos for the site.
“Online commerce is the perfect medium for us to create a new brand that is as much about the clothing as it is about the customer experience,” said Ashley Olsen, who was in Seattle with her twin sister for a product knowledge seminar and an in-store appearance at Nordstrom scheduled for today. “BeachMint is the ideal partner, as they share our vision for the brand and have the resources and talent to execute it.”
“BeachMint understands how online shopping is evolving and the importance of creating an authentic relationship between designer and customer,” said Mary-Kate Olsen, who, with her sister, also founded and designs The Row, Elizabeth and James, Textile Elizabeth and James and Olsenboye. “With Stylemint.com, Ashley and I have created an online experience reflecting our love of style and allowing us to engage with our customers directly, which is an inspiring new way for us to think and create as designers.”
Both StyleMint and JewelMint have shoppers register as members and take short style quizzes to tailor monthly purchase suggestions, using predictive algorithms in the same mold as music sites like Pandora’s. As consumers buy items each month, the technology continually fine-tunes its pitches. Subscribers can use an integrated feature with Facebook and Twitter to garner opinions from friends on potential purchases.
For the first StyleMint collection, available in July, there will be eight styles of cotton/Modal Ts, including classic crewnecks, V-necks, a relaxed Henley and a wedge. Each style will be available in different colors, such as white, heather gray, cream, navy, pale blue and a striped version. Offerings may expand into knits and sweaters down the road, said Jill Collage, president of Dualstar Entertainment Group, the brand management company owned by the Olsens that oversees their various businesses and assets.
“Ashley and Mary-Kate were reviewing where we are with all our brands and we felt there was such a huge opportunity online,” added Collage of this latest project. “We feel like these monthly clubs are the wave of the future. Ashley and Mary-Kate really love connecting with the consumer online and being able to get feedback on the product and content of the site so quickly. They don’t go on camera often, so that will be special for this site. The consumer will be able to see how dedicated they are to the product. It’s all about the quality and fit and the material of these T-shirts.”
The Olsens aren’t the only pop culture phenomenon trading in this space. Kim Kardashian signed on as the celebrity co-founder of ShoeDazzle.com in 2009, a shoe-of-the-month club created by Brian Lee, co-founder of LegalZoom.com. The site has raised more than $20 million in start-up funding from Lightspeed Venture Partners and Polaris Venture Partners.
Unlike Kardashian, however, Mary-Kate and Ashley Olsen have deftly built a respected portfolio of fashion brands, constructed from equal parts business savvy, tabloid fame and genuine design talent — capped by their nomination last month for a CFDA Swarovski award for new design talent in women’s wear.
The duo launched The Row as a designer label in 2007, and it is now carried at more than 70 top stores, including Bergdorf Goodman, Barneys New York, Maxfield and Lane Crawford. The Row has grown to include men’s wear, sunglasses and handbags.
Also in 2007, the Olsens launched the contemporary Elizabeth and James label, adding the denim-oriented Textile Elizabeth and James offshoot last spring. The lines are now carried in Nordstrom, Saks Fifth Avenue, Neiman Marcus and specialty retailers in more than 35 countries.
In February 2010, the sisters introduced Olsenboye in an exclusive deal with J.C. Penney, catering to the department store’s juniors customer, and the brand is now in 600 stores around the U.S.
Berman and Dualstar Entertainment Group declined to provide details of their deal, but Berman said it includes a revenue-sharing component with the Olsens.
Berman launched BeachMint last June with partner Diego Berdakin, also a veteran of MySpace. The two have raised $15 million in seed money from two rounds of funding with venture capital funds New Enterprise Associates, Anthem Venture Partners, Trinity Ventures and Stanford University.
BeachMint has tapped Vernon, Calif.-based Jaya Apparel Group to produce the StyleMint T-shirts. Jaya Apparel Group is the license partner for Elizabeth and James and Textile Elizabeth and James, and also manufactures the Olsenboye line for J.C. Penney. The company, headed and owned by Jane Siskin, was previously known as L’Koral Industries.
The jewelry line for JewelMint is manufactured by L.A.-based Lucas Design International.
BeachMint expects to launch several new sites in the next two years and is exploring opportunities in the beauty, footwear, home and wellness categories, said Berman.
Friday, April 1, 2011
Nordstrom President's Compensation Up 44% Last Year
By Amy Martinez
Nordstrom President Blake Nordstrom received a total pay package worth nearly $4.3 million last year, a 44 percent increase from the $2.95 million he received in 2009, the Seattle-based retailer disclosed in a regulatory filing Thursday.
His 2010 compensation was made up of a $2.1 million bonus, a salary of $696,111, new stock and option awards worth $1.4 million at the time they were given, and $63,852 in perks, including $38,828 of Nordstrom merchandise discounts.
Also, the estimated value of his future pension rose $1.7 million, according to the filing.
The company noted that its sales at stores open more than a year surged 8.1 percent last year, after a 4.2 percent decline in 2009, and it turned in a record $9.3 billion in total sales, boosted by the opening of three new full-line stores and 17 Nordstrom Rack locations. It said those positive results paid off for shareholders as the company's stock rose more than 18 percent during the fiscal year.
Its annual shareholder meeting is now set for May 11 at 11 a.m. in the John W. Nordstrom Room of the downtown Seattle flagship, 1617 Sixth Ave.
Thursday, March 24, 2011
Nordstrom Completes Acquisition of HauteLook
Seattle-based luxury retailer Nordstrom has announced closing its acquisition of online private sale firm HauteLook.
The company previously announced the acquisition on February 17.
Nordstrom president Blake Nordstrom said at the time: “We are excited to partner with HauteLook as we believe this acquisition further enhances our focus on serving customers online in new and compelling ways. While our focus on providing a superior in-store shopping experience is our roots, continuing to find ways to use technology to serve customers the way they want to be served is critical.”
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