The Wall Street Journalreports that American Eagle may close its Martin + Osa stores. The WSJ says the decision on whether or not to close down the stores will come next month when American Eagle reports its fourth quarter earnings. Martin + Osa's sales could be drag on American Eagle's fourth quarter earnings.
Martin + Osa is depressing American Eagle's bottom line as the concept stores, meant to appeal to 28- to 40-year-olds, lost its president late last year and American Eagle Chief Executive Jim O'Donnell was a bit non-committal about the stores' future at a recent industry gathering.
The stores are making progress, with design and production processes having improved, Mr. O'Donnell told attendees at an industry conference on Jan. 13. "It is also important that we continue to differentiate the Martin + Osa brand within the competitive landscape as well as create an emotional connection with the customers."
But Mr. O'Donnell implied the money-losing unit may not yet have achieved its goal, saying, "We are still evaluating our plans and we'll provide additional information...during our fourth quarter earnings call."
A report in DDi magazine first suggested American Eagle may close its 28 Martin + Osa stores. There is also a report here in the Pittsburgh Post-Gazette. Martin + Osa President Laura Dubin-Wander recently left the company, which has fueled speculation that the stores could soon close.
Abercrombie & Fitch may have more problems than trying to sell expensive clothes to teenagers in a weak economy. The Wall Street Journalreports that some retail analysts think the brand's fashion is also stale.
Retail analysts said Abercrombie's troubles go beyond pricing to its once unerring sense of style, a problem that could be trickier to fix. The logo T-shirt and torn jeans ensemble that Abercrombie made the unofficial school uniform a decade ago has played out, said Kimberly Greenberger, a retail analyst with Citigroup Inc. who tours malls every two weeks to assess trends. That misstep has created an opening for lower-priced competitors such as Aeropostale Inc. and American Eagle Outfitters Inc., which reported December sales gains of 10% and 7%, respectively.
"The look is stale," Ms. Greenberger said. "They need to figure out what the next hot trend is and push that, because that's the only way out of this downward spiral."
The Wall Street Journal article says sales at stores open at least a year for Abercrombie plunged 19% in December compared to the year before. Even its lowest priced brand, Hollister, suffered from plunging sales. Hollister's sales dropped 25% in December. The article says Abercrombie is making changes. Hollister has a new line of new dresses out for spring. The WSJ also says the CEO Michael S. Jeffries has personally taken control of selecting the company's new female clothing offerings.
We did notice a welcomed change recently when walking past an Abercrombie & Fitch store at the mall. There was no longer deafening music coming from inside the store. It is possible the store had simply blown out its speakers, but if it is really a change it is a good one. Unfortunately, the smell of cheap cologne coming from the store was still overwhelming.
WWDreports that the Modern Amusement fashion brand ceased operations last week. WWD says Nicole Castrogiovanni, vice president of sales at Modern Amusement, informed retailers in an email, "With regret, I am writing to inform you that Modern Amusement has ceased operations effective immediately. In light of prior management disputes, it is a difficult but necessary choice. Unfortunately, this is all the information we can provide at this time and we are unable to elaborate on all the details. This is deeply troubling for myself, Mossimo and the entire Modern Amusement family."
Modern Amusement's headquarters in Costa Mesa, California will be closed and spring apparel to any of the retailers that carry the brand, including Bloomingdale's, Saks Fifth Avenue and Nordstrom. The company has not updated its Twitter account, @followthecrow, since last December. ApparelNews.net also has a story about Modern Amusement ceasing operations.
Many top online retailers are still having web problems that annoy online shoppers. A new survey of 1,500 online shoppers, conducted by Equation Research on behalf of Gomez, found that many people experienced problems and errors completing transactions during the 2009 holiday shopping season. The study found that a third of online shoppers had a bad experience on a retail Web site during the recent 2009 Holiday shopping season. 15 percent of shoppers found the problem to be "unacceptable." These bad online experiences caused nearly 20% of online shoppers to shop at another site.
"This survey confirms that consumers expect retail Web sites to perform well for them, regardless of how many other shoppers are also visiting the site," said Matt Poepsel, Vice President, Performance Strategies, Gomez Division. "It's also clear that when shoppers encounter Web performance problems, their patience and loyalty run thin. Once a customer has left your site, chances are they are not going to give you a second chance--and few retailers can afford to lose business this way."
Reuters reports that Dollar General plans to open 600 new stores and hire 5,000 new workers this year as part of its expansion plans.
Dollar General, which prices most of its merchandise below $10, has been gaining customers and growing sales amid the economic downturn, allowing it to open new stores while other retailers close up shop or scale back expansion plans.
Last year, the retailer hired 4,000 workers to staff 500 new stores. A spokeswoman for the company said the retailer has not announced plans to close any stores this year.
Dollar General currently has over 8,800 stores and employs 78,000 employees. The company's press release did not say where the new stores will be located.
Movie Gallery, Inc., the owner of the Hollywood Video movie rental chain, has filed for Chapter 11 bankruptcy protection. Bloombergreports that a significant number of store closings are expected. This is Movie Gallery's second bankruptcy filing since 2007.
The company listed debt of $500 million to $1 billion and assets of as much as $50 million in Chapter 11 documents filed yesterday in U.S. Bankruptcy Court in Richmond, Virginia.
The owner of the Hollywood Video chain exited its first bankruptcy in 2008. Its traditional stores are losing customers to Netflix Inc., which rents movies by mail, and Coinstar Inc., operator of Redbox movie-rental kiosks.
"One of the most significant industry-wide factors affecting the company’s performance since the 2007 bankruptcy cases has been the cannibalization of rentals by DVD dispensing kiosks operated by Redbox which offer low priced rentals and convenience," Steve Moore, Movie Gallery's Chief Restructuring Officer, said in court papers.
Bloomberg says Movie Gallery will be closing 746 of its 2,600 stores immediately. More store closings could come later. Earlier reports suggested Movie Gallery could close about 1,800 stores. Movie Gallery faces the same problem as Blockbuster - increasing competition from kiosks, digital movie services and on demand services.
Bloombergreports that Wal-Mart Stores Inc. is cutting 300 jobs at its corporate headquarters in Arkansas.
Legal, finance, corporate-affairs and human-resources jobs will be cut, David Tovar, a spokesman, said by telephone today. The affected employees, about 2.5 percent of the 12,000 workers in the home office, were notified this morning, he said.
"This was a difficult decision but I believe that if we ask our operations to be leaner and more customer-focused, we must ask the same of our support teams at the home office," Chief Executive Officer Mike Duke told employees in a memo.
Walmart also recently announced they would be cutting over 11,000 Sams Club jobs. It is difficult to ascertain the health of the economy. Some retailers are doing a little better but at the same there continues to be new layoffs and little job creation.
The Telegraphreports that John Lewis has been named the official retailer of the 2012 games. John Lewis will also furnish the Olympic site in London in 2012.
The company will also become the official retailer of London 2012 merchandise, dedicating about 5,500 square feet of its Oxford Street and Stratford stores in London to selling, mugs, clothes, sports equipment, homewares and jewellery. Some of the products, yet to be designed, will be exclusive to the department store.
In addition, John Lewis is seconding many of its 30,000 staff to the games, who could work for the organising committee for at least a year leading up to the games in the summer of 2012. "We have staff with up to 30 years' experience in logistics, warehousing, recruitment and other areas," said Rob Hennesy at the store. "We think we have a lot to offer."
Lord Coe, the chairman of the London Organising Committee of the Olympic games (Locog), said: "The difference between a good and a great games is that you need to focus on the quality of the volunteers. And this [John Lewis] is an organisation that can do this."
The official London 2012 Olympics website contains a press release about the announcement of John Lewis as the official department store provider for the games.
The Wall Street Journalreports that Ann Taylor is increasing its outlook for the fourth quarter. The retailer is expecting to report flat same-store sales for the fourth-quarter. The retailer credit its promotional strategy and improved product assortments for the sales increase.
The company said it sees sales approaching $470 million, compared with its previous forecast of sales declining "slightly" from the $462.4 million it reported for the fiscal third quarter. Same-store sales are expected to be flat overall, down a less-than-feared 7% at its namesake locations and up about 2% at the Loft chain.
The retailer also expects its gross margin to approach 52%, up from its previous outlook and "significantly stronger" than the prior year's 35.7%.
"I am especially pleased that much of the upside was a result of improved product assortments at both brands," said President and Chief Executive Kay Krill. "Overall, our top-line improvement and healthy gross margin performance also reflected the success of our planned promotional strategy and the benefit of our clean inventory position."
It is good to see some of the reports for retailers getting a little more upbeat.
The Wall Street Journalreports that Barbie helped boost Mattel's fourth quarter profits by 86%. Barbie sales jumped 12% in 2009 compared to the year before. However, Mattel's overall sales only increased by 1% because the toy manufacturer did not do as well in other categories.
The largest U.S. toy maker reported a profit of $328.4 million, or 89 cents a share, up from $176.4 million, or 49 cents, a year earlier. The periods included tax benefits of 8 cents a share and 13 cents, respectively.
Despite a 12% increase in Barbie sales, its overall sales were lackluster, with revenue climbing 1% to $1.96 billion. Sales fell 2% in the U.S., where Mr. Eckert said Mattel lost "a little bit" of market share, mostly as a result of fewer toys tied to entertainment than last year.
Analysts polled by Thomson Reuters had most recently forecast earnings of 68 cents a share on $1.98 billion in revenue for the El Segundo, Calif., company.
According to NRF's 2010 Valentine's Day Consumer Intentions and Actions Survey, conducted by BIGresearch, couples will spend less money on each other than last year. Last year couples spent an average of $67.22. That amount is forecast to drop nearly 10% to $63.34 this year. The NRF forecasts couples to spend less but individuals will spend a little more overall. The survey predicts the average person will spend $103.00 on Valentine's Day merchandise this year, which is very similar to last year's $102.50. Valentine's Day spending in 2009 - during the middle of the recession - was not very good for retailers. The news that this year won't be better probably isn't what retailers want to hear.
The items people are buying include typical Valentine's Day gifts like flowers, chocolate and cards. Traditional gifts such as greeting cards (54.9%), candy (47.2%) and flowers (35.6%) remain popular choices. Spending on clothing is expected to climb (14.4% vs. 10.2% in 2009) while jewelry spending is expected to fall slightly (15.5% vs. 16.0% last year).
Americans will spend more on friends, co-workers and pets this year. The average person will spend $5.37 on friends, up from $4.74 last year; $4.29 on classmates and teachers, compared to $3.59 last year; and $2.84 on co-workers, slightly up from the $1.94 they spent in 2009. The average person will spend $3.27 on pets this year - a big jump from $2.17 last year. Spending on family members will remain the same ($20.94 vs. $20.95 last year).
Men will spend nearly twice the amount women spend on the holiday. The average man plans to shell out $135.35 to impress the people in his life while women only expect to spend $72.28. Men spending a lot more than women is typical for Valentine's Day.
Bloomingdales is opening two stores in Dubai today. Both are located in the Mall of Dubai. One 146,000-square-foot store features men's and women's clothing and accessories. The other will sell home furnishings in a smaller, a 54,000-square-foot space. Bloomingdale's licensed the stores to Al Tayer Group LLC, which is the premiere luxury retailer and distributor in the area.
WWD reports:
"This was a total collaboration, but there is nothing in the stores, from a creative point of view, that Bloomingdale's did not approve," said Michael Gould, chairman and chief executive officer. "What Bloomingdale's stands for is going to be embraced by Dubai."
Gould and his team will be keeping close tabs on the Dubai stores, located in The Dubai Mall, one of the world's largest shopping centers. "We envision a monthly communication -- at least," he said.
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"The stores are inspired by 59th Street, with Arabian influences tenderly cushioned throughout. There is a modern, contemporary feel to these stores," said Shireen El Khatib, ceo of Al Tayer Insignia, the luxury arm of the Al Tayer Group. "We have insured that the Dubai Bloomingdale's stores will encapsulate a world-class retail experience including the best international brands, a contemporary store ambience and excellence in customer service."
Pictured above is the 9,000 square foot shoe salon, which is the biggest shoe salon in the region, according to the
Gulf News.
Narciso Rodriguez is opening an eBay store, according to WWD. The store will launch on February 15, 2010.
The eight-piece spring collection includes matte jersey dresses and a denim suit -- more relaxed, accessible versions of the designer's graphic classics, at considerably lower prices ($75 for a T-shirt; $350 for the reversible cotton coat). "This is a great way to not need a secondary line," adds Rodriguez.
Narciso said it was like having his own boutique. The online store was created in collaboration with eBay.
The Detroit Newsreports that Borders is cutting 164 corporate jobs, including 88 at its Ann Arbor headquarters. Borders sales fell 14% during the 2009 holiday season.
The layoffs represent less than 1 percent of the company's total work force of 22,500, said Borders spokeswoman Anne Roman. The cuts are in response to weak 2009 sales, including the recently ended holiday period. Borders' sales for the 11-week period were $846.8 million, down nearly 14 percent from 2008.
Borders sales have fallen as competition from online retailers and discounters has heightened and consumers have cut spending.
The company is "the brutal victim of shifting demographics," said Kenneth Dalto, a retail analyst in Farmington Hills. "Half the people who bought at Borders 10 years ago are buying online."
There have been reports of concern over Borders financial stability. Borders CEO Ron Marshall resigned yesterday. Hopefully, the struggling bookseller will be able to turn things around this year.
CNN reports that Regent Street has become one of the most distinctive streets for shopping in London. The street was built specifically for shopping when it was constructed in the 1800s. The street includes the first flagship Apple store opened in Europe Other stores include Bose, Ferrari, Anthropologie, Hamley's, National Geographic and more. Take a look: