RetailSails

• There was a plethora of earnings reports in the past week, but none was as dramatic as Targets, for the following reason: Their first quarter profit rose 28.5% with same store sales rising 2.8%.  But, what makes that news so impactful is that a large contributor to the profit picture was in apparel, which is in stark contrast to the very visible weak apparel returns at rival Walmart. While we are firm believers in Walmart’s stock being undervalued, it is pretty apparent that Target is eating Walmart’s lunch in soft goods.

• AllSaints, the British based contemporary brand, opened it’s first New York store in Soho on lower Broadway on Friday and did $10,000 in the first hour of business. The 13,600 sq foot location is in the middle of a popular area for shoppers and pedestrians, within 2 blocks of the new Hollister, Uniglo, Bloomingdales and Topshop stores. It is the third store to open in the US, all in the last 7 months, first in Los Angeles and then Miami and most recently in Boston. The LA and Miami stores are tracking well ahead of plan. Later this year 4 more stores are set to open here, San Francisco, Chciago, Las Vegas and Seattle. AllSaints operates 70 freestanding stores and 70 in-store concession shops around the world, including Bloomingdales 59th st.

• Jones Apparel signed a licensing agreement to market men’s denim under Andrew Marc and derivative labels, Marc Moto and Marc New York. The outerwear company, which was bought by G-III Apparel 2 years ago, is well-known for contemporary men’s and women’s outerwear and also has licenses for women’s shoes and bags and men’s accessories. Jones, which has a large women’s and junior jeans business that is close to a $1 billion in volume, with LEI as an exclusive at Walmart and Gloria Vanderbilt as the 2 largest revenue producers. Their recent launch of Jessica Simpson Jeans is said to be exhibiting signs of success as well. Jones has never had much traction in the men’s arena and Andrew Marc is not a powerful enough brand to generate big returns, but can be the nucleus of an emerging men’s business.

• There was a lot of cheering on Friday when it was announced that Devi Kroell was leaving her namesake designer shoe and handbag company. Or more accurately, was being forced out by her backer and partner Ralph Bartel. Kroell, well know in the industry, for mistreating employees, suppliers, buyers and just about anyone else that came in contact with her, will not be missed.

A Bright Future for Macy’s?

Macy’s announced a 5.5% increase in same-store sales for the 1st quarter and a profit of $23 million vs a loss of $88 million for the same period last year. This is a positive sign in and of itself, but there are further reasons to like the future for the mammoth retailer. They are now generating 40% of their revenue from private and proprietary brands. With upcoming and recent deals with Madonna, Sean Jean, Rachel Roy and Columbia Sportswear and with an aggressive effort to continue to add to that strategy, it is clear that the percentage of exclusive labels will be a greater share of the total in the future. The advantage of selling product that their competition doesn’t carry is multifold; greater margins, more control, less markdown pressure, distinguishing from the competition. This bodes well for their margins in the near future.

Additionally, there are plans that will increase the revenue that Bloomingdale’s contributes to sales, currently running at 10% of the company’s total. It was announced Bloomingdale’s will roll out a smaller 100,000 sq ft format, ala the Soho store, with a store opening in Santa Monica this summer. It was already announced that they are opening the first of 4 outlet stores this summer, which is a new venture for the chain. Continue reading ‘Retail News & Views’