Monday, September 30, 2019

Moody's splashes cold water on Madewell IPO

Retail Dive
Moody’s Investors Service analysts last week threw some cold water on J. Crew Group’s plans to separate its Madewell unit and take it public, saying, among other things, that the company may be overestimating Madewell’s value. While J. Crew pegs Madewell’s enterprise value at between $1.9 billion and $2.9 billion, Moody’s puts it at closer to $1.2 billion to $1.9 billion.

The move also depends on the company and a group of its lenders agreeing on a debt restructuring plan, which Moody’s noted remains uncertain.. . . more

Luxury handbag reseller Rebag expands its store presence

Chain Store Age
Resale is booming and Rebag is capitalizing on it.

The digitally-native designer handbag reseller opened its eighth brick-and-mortar location, at Roosevelt Field mall, Garden City, New York. It is Rebag’s fourth retail location in the New York metro area and follows the company’s recent announcement of securing $25 million in Series C funding.. . . more

Forever 21, which helped popularize fast fashion, to file for bankruptcy

Boston Business Journal
Forever 21, the California retailer that helped popularize fast fashion in the United States with its bustling stores and $5 tops, said on Sunday night that it would file for bankruptcy, a sign of the eroding power of shopping malls and the shifting tastes of young consumers.

The private, family-held company capped months of speculation about its restructuring efforts by saying that it would cease operations in 40 countries, including Canada and Japan, as part of a Chapter 11 filing. It will close up to 178 stores in the United States and up to 350 overall. . . . more

Friday, September 27, 2019

McKinsey to Open First Ever Store At Mall of America

Fortune
It’s not your typical mall store.

Consulting giant McKinsey & Co., in collaboration with Mall of America, unveiled a laboratory-styled retail concept, called Modern Retail Collective, at the nation’s largest shopping mall. The store offers retailers the opportunity to work with McKinsey and Mall of America to test new technologies and “discover what’s possible when multiple technologies, analytics and store operations work together to elevate in-store experiences,” according to a company statement. . . . more

Would Simon, Brookfield Investment in Forever 21 Make Sense for Both Parties?

NREI
Struggling fast-fashion retailer Forever 21 Inc. may be positioning itself for bankruptcy, but with a possible twist.

Giant mall landlords Simon Property Trust and Brookfield Property Partners are reportedly in negotiations to acquire a stake in the ailing retailer. The move would mirror the strategy that the duo took with bankrupt Aeropostale three years ago.. . . more

Gap to hire fewer workers for holiday season

Reuters
Gap Inc said on Thursday it plans to hire more than 30,000 seasonal workers for the upcoming holiday season, lower than the 65,000 target the apparel retailer had set for 2018.

A Gap spokeswoman said total seasonal hiring is lower this year to give current employees the opportunity to pick up more hours.. . . more

Thursday, September 26, 2019

Lease of faith: Why churches are going into malls

Retail Dive
There was a time in the 80s when shopping could be easily compared to a religious practice. While Gordon Gekko was opining about greed being good, the economy was humming along, and the mall was central to both consumerism and how American life functioned, simply because the physical space acted as a town center.

"The mall was where you bought almost anything but food," said Nick Egelanian, founder and president of SiteWorks Retail. "There were some discounters. There were some drug stores, obviously grocery stores. But malls were a big part of the household experience in the mid-1980s." . . . more

JC Penney: What Now?

KeyPoint Partners
For the better part of the past decade, JC Penney has been on a downward trend, experiencing a continuous erosion of market share to the likes of Target, Walmart, and Amazon, among others. It has gone through four chief executives, most notably Ron Johnson, who came over from Apple after transforming Apple retail outlets from boring computer stores to electronic gadget playgrounds. Unfortunately Johnson couldn’t successfully reboot Penney’s . . . more

Tuesday, September 24, 2019

High-end stores at new mega-mall? Dream on!

NJ.com
Whatever happened to promises of only super-high-end retailers at the new mall in the Meadowlands?

For years we were tantalized with promises of Chanel, Gucci, and Balenciaga. Looks like we’re getting Century 21, H&M and Zara.. . . more

Hanover Mall reboot lands Market Basket, Showcase as tenants

Boston Business Journal
The re-envisioned Hanover Mall has landed Market Basket, Showcase Cinemas and Ten Pin Eatery & Barstow Tavern as retail tenants ahead of the official approval of the mall’s proposed redevelopment.

Market Basket has agreed to lease 80,000 square feet and hire 400 people at Hanover Crossing, with features including a Market’s Kitchen and Café and a full-service Butcher Block.. . . more

Monday, September 23, 2019

'Retail apocalypse' could last another 2 years

Retail Dive
The current period of consolidation colloquially known as the "retail apocalypse" may last for another 18 to 24 months, according to an emailed analyst note from investment bank B. Riley FBR.

That includes both liquidating retailers and healthy players looking to rationalize their store fleets. Much of the closures would happen at B- and C-class malls, which have already struggled for years now.. . . more

For Clothing Retailers, Breaking Up Is Now Harder to Do

NREI
Two big names in clothing retail are getting smaller. Gap Inc. laid out the details last week of its previously announced plan to split into two companies — one that is solely its Old Navy chain, and another for everything else. Meanwhile, J. Crew Group Inc. made it official last week that it plans to spin off its Madewell chain.

Both of these splits are the right moves for two apparel businesses that have oddly similar problems: Their newer chains are doing well, but their older ones are struggling. The breakups will allow executives to focus more intently on the troubled brands’ problems. . . . more

7-Eleven Opens Its First Mall Convenience Store

Convenience Store News
7-Eleven Inc. is heading to the mall.

The convenience store retailer opened its first location inside a mall in Brandon, Fla. The Westfield Brandon c-store is the first of seven locations 7-Eleven plans to open in malls this year, according to ABC Action News.. . . more

Eyes on U.S. prize, Primark considers Central American suppliers

Reuters
Confident it can crack the $300 billion U.S. clothing and shoes market where many other foreign retailers have failed, Britain’s Primark is ready to raise its bet on the country by securing new sources of fast fashion in central America.

Primark, whose trendy clothes at rock-bottom prices have taken UK shoppers by storm, opened in Boston in 2015 and now has nine stores in the northeast, all served by a warehouse in Pennsylvania that could still serve three times as many stores.. . . more

Thursday, September 19, 2019

Fitch joins S&P in downgrading J.C. Penney on turnaround uncertainty

Retail Dive
Fitch Ratings downgraded J.C. Penney's credit rating deeper into junk territory, to CCC+ from B-. The downgrade was based on "continued market share losses and declining EBITDA, with lack of visibility for a material turnaround although there are no near-term liquidity concerns," analysts said in an emailed report.

Analysts also described Penney's capital structure as "untenable" but noted it has the liquidity to fund seasonal working capital and near-term debt maturities. They also expect Penney's store traffic and core apparel sales to keep sliding. . . . more

Wednesday, September 18, 2019

Forever 21 Is in Talks to Give Landlords a Stake in Bankruptcy

NREI
Forever 21 Inc. is in discussions to give a stake in the company to its two largest landlords as part of a restructuring that would allow co-founder Do Won Chang to retain a share, according to people familiar with the matter.

The ailing fast-fashion retailer is in talks with Simon Property Group Inc. and Brookfield Property Partners LP about the proposal, which would be part of a bankruptcy filing, said the people, who asked not to be identified discussing a private matter. The negotiations are ongoing, and could end without a deal, they said.. . . more

A retail star that’s casually upstaging J. Crew

Boston Business Journal
When J. Crew started opening Madewell stores in 2006, the company declared that its new brand would deliver “real, honest women’s clothes” for hip 20- and 30-somethings. “Not too trendy, not too girly, just cool clothes infused with a modern upbeat attitude,” it said in a release at the time, promoting the worn-in feel of the retailer’s T-shirts, jeans and chinos.

The idea worked better, perhaps, than the company expected.. . . more

Penney's first female CEO says her turnaround will be the one to work

SF GATE
Jill Soltau is making a long-shot bid at J.C. Penney Co. to do what her predecessors couldn’t: uncover what customers really want from the ailing department-store chain.

J.C. Penney had work to do in every category, Soltau said in her first sit-down interview since she started the job. . . . more

Tuesday, September 17, 2019

Crate & Barrel to expand in-store restaurant concept

Retail Dive
Crate & Barrel's first restaurant in Chicago did so well that the retailer plans to open up to 15 full-service restaurants inside its stores, CEO Neela Montgomery said during Fortune's MPW International Summit. She said the concept turned a profit by the second month. Montgomery didn't indicate a timeline for opening these restaurants.

Crate & Barrel opened its first full-service restaurant, called The Table at Crate, yesterday at its Oak Brook, Illinois store, according to a company release.. . . more

Stage Stores goes all in on off-price

Chain Store Age
Stage Stores Inc. will close about 40 stores as part of a plan to substantially convert to its off-price Gordmans banner.

Stage plans to begin converting its remaining department stores in February 2020, and expects to be operating approximately 700 predominantly small-market Gordmans off-price stores by the third quarter of fiscal 2020. A limited number of stores may continue to operate under their existing department store nameplates until closure is permitted by lease.. . . more

Gap, J. Crew, Hudson’s Bay And The Unrelenting Collapse Of The Middle In Retail

Fortune
With few exceptions, retailers that execute well at either end of the value spectrum are doing pretty well. Those that are weak on price and convenience or, alternatively, fail to deliver a memorable more premium, differentiated product and shopping experience increasingly find themselves in an unsustainable no man’s land.

Recent earnings reports from Gap, J. Crew and Hudson Bay continue to reinforce the idea that physical retail isn’t dead, but boring retail is.. . . more

Monday, September 16, 2019

Can J.C. Penney's Jill Soltau pull off the ultimate retail Hail Mary?

Retail Dive
J.C. Penney is still losing customers, sales and money as Soltau tries to pull off a lasting turnaround. The CEO has built out a team of new executives this year and has an eye both on finances and the need to invigorate the retailer's stores and offering.

The stakes are as high as they've ever been. Penney's bonds are rated as junk, its shares are traded at penny stock levels and, after news broke that it was working with financial advisors, the company had to tell a jittery world that it was specifically not working on a Chapter 11 filing.. . . more

J. Crew net loss grows in Q2

Chain Store Age
The specialty apparel retailer reported essentially flat total revenues of $588.8 million, while same-store sales declined 1% from the prior-year period. Net loss grew to $44.2 million compared to $6.1 million in the second quarter the previous year. J. Crew said net loss during fiscal 2019 and 2018 were impacted by transaction, transformation and severance costs and a benefit related to the lease termination payment.

One bright spot was performance of the company’s Madewell subsidiary, which it launched in 2006 as a separate, more casual and denim-based brand. Madewell sales increased 15% to $139.7 million from $121.6 million, and Madewell same-store sales rose 10%. . . . more

Madewell, J Crew's denim brand, files for an IPO

CNN Business
Madewell, J Crew's fast-growing denim brand, plans to split from its struggling parent company and hit the public market.

Madewell reached more than $600 million in sales during its 2018 fiscal year, up from $248 million in 2014, according to the filings. As of August, Madewell company operated 132 small US stores, primarily in upscale shopping malls and on city street corners. Around 60% of Madewell's customers were in its membership program last year and 37% of its sales came online, it said.. . . more

Friday, September 13, 2019

Cape Cod Mall Announces Extensive Renovations

BRET
Simon announced that Cape Cod Mall will begin an extensive interior and exterior renovation complete with elevated finishes, modern décor, fresh landscaping featuring an outdoor gathering space, a new custom themed play area, and more. . . . more

Old Navy to almost double the size of store fleet

CSA
Old Navy, which will soon be spun off by parent Gap Inc. as an independent public company, is feeling bullish on brick-and-mortar.. . . more

Tru Kids taps toy industry vet to head joint venture to open Toys ‘R’ Us stores

CSA
Plans to revive the Toys “R” Us banner in the U.S. are gaining momentum with the appointment of a veteran from the bankrupt chain to lead the new initiative.. . . more

Gap Inc. to grow Athleta, Janie & Jack globally via franchising

CSA
Gap Inc. is expanding its already robust franchise business with the addition of two brands.

The retailer announced it will begin franchising its Athleta and Janie & Jack brands internationally, starting with online and in shop-in-shop formats. Gap Inc. said it will eventually open brick-and-mortar stores with proven partners. . . . more

Thursday, September 12, 2019

Hudson’s Bay Co losses widen on lower sales and heavy discounts

Ottawa Citizen
Canadian department store operator Hudson’s Bay Co reported a wider second-quarter loss on Thursday, hurt by several shuttered stores, heavy discounting and declining sales at the retailer’s namesake brand.

The Toronto-based company has been fighting a tough retail environment as e-commerce behemoth Amazon.com Inc and other department stores such as Macy’s and Nordstrom Inc continue to swoop up more customers with discounts.. . . more

Forever 21 says reports are wrong, company is 'not planning to file for bankruptcy Sunday'

USA Today
While reports are circulating that Forever 21 Inc. could file for Chapter 11 bankruptcy protection as early as Sunday, the fashion retailer told USA TODAY that's not the case.

"The reports are inaccurate; Forever 21 is not planning to file for bankruptcy on Sunday," the company said in a statement. "Our stores are open and it is our intention to continue to operate the vast majority of U.S. stores, as well as a smaller amount of international stores.". . . more

Wednesday, September 11, 2019

Francesca's shares rise on profit surge

Retail Dive
Francesca's on Tuesday said that second quarter net sales fell 6% to $106 million from $113 million in the year-ago quarter.

Comparable sales fell 5%, due to lower average unit prices from "deeper markdowns on legacy product," partially offset by higher conversion rates and average units per transaction, according to a press release.

Gross profit as a percent of net sales fell to 38.2% from 39% a year ago because the deeper markdowns lowered margins. Net income rose to $1.8 million from $0.5 million in the prior-year quarter. The company opened one store and closed five during the period for a total of 718.. . . more

GameStop to close up to 200 stores

Engadget
Just two months after GameStop announced ambitious plans to breathe new life into its stores, the company has announced that between 180 and 200 stores around the world will be closing their doors for good before the year is out -- and more closures are coming.

The company's balance sheet has not looked healthy in recent times -- its second quarter global sales decreased 14.3 percent, marking an adjusted net loss of $32 million. As such, GameStop CFO James Bell announced that up to 200 "underperforming" stores will be closed between now and the end of the year. . . . more

L Brands promises an ‘evolution’ is ahead for Victoria’s Secret brand

CNBC
If there was one clear theme at Tuesday’s L Brands’ investor day, it was that it was time to move beyond past mistakes — both personal and corporate — that have lopped off nearly a third of the company’s value over the past year.

“There’s a big belief in the company that we need to evolve,” said John Mehas, head of Victoria’s Secret Lingerie, speaking at the Hilton Columbus at Easton.. . . more

J.C. Penney looks to outdoor sports enthusiasts to reel in more consumer spending

The Dallas Morning News
Plano-based J.C. Penney will be going up against sporting goods retailers such as Bass Pro Shops and Academy Sports + Outdoors for a piece of the men's outdoor lifestyle category.

Penney is expanding into the more rugged clothing with its own St. John's Bay brand, both online and in about 600 of its 830 stores starting Thursday. The new merchandise, which Penney's in-house product development and designers created, includes shirts, sweaters, jackets and pants in functional and durable styles.. . . more

Monday, September 9, 2019

L Brands Investors Poised to Demand Answers After 35% Hammering

NREI
Many apparel retailers are having a rough go of it in 2019, but few have had as much trouble as L Brands Inc., the parent of embattled lingerie purveyor Victoria’s Secret.

From its outdated imagery to its stagnant sales, Victoria’s Secret was already in the hot seat with shareholders, culminating in a brief activist battle earlier this year -- and that was before founder Les Wexner’s ties to Jeffrey Epstein came under scrutiny.. . . more

Macy's bets on 'Growth' stores

Retail Dive
Less than a month after reporting a bruising second quarter, Macy's said that it expects to fully complete the planned expansion of its Growth50 store remodels to an additional 100 locations this fall. CEO Jeff Gennette, speaking to analysts last month per a Motley Fool transcript, had promised the completion ahead of the holidays, noting that, all told, those 150 stores cough up half of the company's brick-and-mortar revenue.

The effort is part of the company's store strategy announced last year, a triad of concepts — flagships including its Herald Square icon, smaller neighborhood stores and the Growth "magnet" stores. . . . more

Neiman Marcus dreams up new e-commerce venture

Chain Store Age
Neiman Marcus Group is reportedly partnering with four luxury mattress brands for online sales.

According to the Dallas Morning News, the upscale department store chain is now selling exclusive selections from Aireloom, Royal-Pedic, Sferra, and Shifman via NeimanMarcus.com and its Horchow.com specialty furniture and décor site. Offerings include mattresses, which customers can also pair with complementary products such as pillows and pajamas. Mattress prices range from $2,000 to almost $20,000.. . . more

Friday, September 6, 2019

Genesco’s Q2 earnings crush Street as Journeys continues to gain momentum

Chain Store Age
Footwear retailer Genesco Inc. reported second-quarter earnings and same-store sales that topped Street estimates, fueled by strong back-to-school sales at its teen-fave brand, Journeys.

The company, whose divisions include Journeys, Johnston & Murphy and Schuh, reported net income or $577,000 for the quarter ended Aug. 3, compared to a loss of $15,000 in the year-ago period.

Sales slipped to $486.6 million from $487.0 million, below estimates of $489.2 million. Same-store sales rose 3% ahead of Street expectations. Same-store sales increased 4% at Journeys and 1% at Johnston & Murphy. . . . more

Macy's sees savings of up to $550 million from targeted promotions, better pricing

Reuters
Macy’s Inc said on Thursday it aimed to save $400 million to $550 million annually in the next two to four years, as the department store chain cuts back on discounts, sending its shares up 5% in mid-day trading.

The 160-year-old company, which has been spending heavily on remodeling its stores and building off-price and online businesses, has relied on discounting to clear inventory, a move that has hurt its earnings. . . . more

Lululemon shares rise as growth in men's sales drives earnings beat

CNBC
Lululemon on Thursday reported second quarter earnings that topped analysts’ expectations, sending the athletic apparel retailer’s shares up as much as 5% in after-hours trading.

The company also hiked its full-year outlook. CEO Calvin McDonald said in a statement he sees “significant runway” ahead, as Lululemon continues to push into new categories. . . . more

Thursday, September 5, 2019

Sears and Kmart keep shrinking. Here's what's left

CNN Business
Sears, the 133-year-old company that was once the jewel of American retail, continues its slow and precipitous decline. It keeps shuttering Sears and Kmart stores, even after emerging from a bankruptcy designed to salvage the company.

So far this year, Kmart has closed, or plans to close, about 60 stores, leaving fewer than 100 open. Sears has closed, or will close, more than 30 stores this year, reducing the number to fewer than 200. . . . more

American Eagle Outfitters’ Q2 beats Street amid strong Aerie sales

Chain Store Age
American Eagle Outfitters Inc. topped analysts’ estimates as its intimates brand Aerie marked its 19th consecutive quarter of double-digit growth.

The apparel retailer overcame a slow start to finish strong, but its same-store growth still came in below expectations and it offered weak guidance.. . . more

After 'bleak' Q2, prospects dim for department stores

Retail Dive
Moody's cut its forecast for department store profits after a "bleak" second quarter for the sector, according to a report released Tuesday and emailed to Retail Dive. The ratings agency now forecasts a 15% overall drop in operating income for the sector in 2019, after previously predicting a 10% decline.

Perhaps even worse, the sector's bad Q2 and predicted profit decline followed several department stores' "heavy investing to improve inventory efficiency and to build their online capabilities," Moody's analysts led by Christina Boni wrote in the report.. . . more

Tuesday, September 3, 2019

Nearly 100 More Sears & Kmart Stores To Close, Including 2 Mass. Locations

CBS Boston
Nearly 100 additional Kmart and Sears stores could close in December or sooner. The latest round of closures includes two locations in Massachusetts.

The Brockton Enterprise reports that Kmart stores in Brockton and Webster are going out of business. . . . more