Author: Chad Symens

Shoppers in the United States plan on spending an average of $646 on gifts this holiday season, representing an 11% increase over the $582 they planned to spend, on average, in 2012, according to Accenture’s annual holiday shopping survey. The forecast uptick is more optimistic than other holiday surveys released to date.

“The average dollar spend is trending up, and we are seeing a consumer mindset shifting from ‘cautious’ to ‘sensible,’ which is good news for retailers,” said Chris Donnelly, global managing director of Accenture’s Retail practice. “However, retailers are mindful that during the 2013 Thanksgiving-Christmas shopping period, they will have six days less in which to tempt shoppers through their doors, so many will go big and go early.”

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Deloitte’s holiday sales forecast points to further signs that the economy is recovering. Holiday sales are expected to climb to between $963 and $967 billion, representing a 4% to 4.5% increase in November through January holiday sales (excluding motor vehicles and gasoline) this year from last year’s season. 

The growth rate is on par with last year’s 4.5% gain. In addition, Deloitte forecasts a 12.5 to 13% increase in non-store sales. Nearly three-quarters of non-store sales result from the online channel with additional sales coming from catalogs and interactive TV.

Deloitte also anticipates that mobile-influenced retail store sales will account for 8%, or $66 billion, in retail store sales this holiday season, driven by consumers’ store-related smartphone activity such as product research, price comparison or mobile application use.

“We anticipate non-store sales growth will continue to surpass overall retail sales growth,” said Alison Paul, vice chairman, Deloitte LLP and Retail & Distribution sector leader. “In addition, shoppers researching their purchases electronically, via their PC, tablet or mobile phone, are increasingly influencing in-store sales, particularly as we see greater integration across retailers’ store, online and mobile channels. More retailers are offering services such as ‘buy online and pick up in store,’ as well as inventory from other locations and price matching on the spot. The store is still a core element of holiday shopping, and retailers leading the way this season will be those that effectively bring together their pricing, promotions, merchandise and inventory management across both their physical and digital storefronts.”

source: www.retailingtoday.com, Dan Berthiaume 

Canadian retailer Hudson’s Bay, parent company to Lord & Taylor stores, has agreed to purchase Saks Fifth Avenue, based in New York City. The buyout is expected to close by year end.

The combination of these three brands will make the company one of the largest luxury brand retailers in North America, with over 320 stores.

During a conference call with investors, Hudson’s Bay Co. Chairman and CEO Richard Baker said the goal is to bring Saks luxury brand into Canada. The company plans to open up seven Saks Fifth Avenue stores and 25 Off Fifth outlet stores to Canada.  “With the addition of Saks, (Hudson’s Bay) will offer consumers an unprecedented range of retailing categories and shopping experiences,” Baker said.

Global luxury sales, including higher-end jewelry and clothes, rose an estimated 10 percent to $281.96 billion last year, according to the latest study from Bain & Co. In North America, luxury sales were up an estimated 12 percent to $81.33 billion.

Bradenton, FL June 12, 2013—Accelerated Analytics®, a leading provider of retail point of sale reporting, announced today it has acquired afterBOT’s retail POS reporting business.  The acquisition further expands the market leadership of Accelerated Analytics as the go to provider for retail point of sale reporting solutions. 

“The acquisition of the afterBOT point of sale reporting business is a key strategic step in our growth strategy for Accelerated Analytics.  We are looking forward to servicing the existing afterBOT customer base, and bringing new capabilities to our existing customers.” said Chad Symens, President and CEO of Accelerated Analytics.

As part of the Accelerated Analytics family afterBOT customers will now have opportunities to expand their retail point of sale reporting through:

• Multi-retailer reporting.  Accelerated Analytics provides reporting for over 100 retailers.  Customers will now have the opportunity to access POS reporting for all their retail customers in a single set of reports.  
• Expanded reporting tools and capabilities including the ability to customize reports and add other non-POS data like shipping. 
• Mobile access to reports on the iPad and iPhone.

As part of the agreement afterBOT has licensed IP to Accelerated Analytics for servicing the current customers which can also be considered for new opportunities in the future. 

MOORESVILLE, N.C., Jun 17, 2013 (BUSINESS WIRE) — Lowe’s Companies, Inc. LOW +0.51%  , the world’s second largest home improvement retailer, today announced it has entered into an asset purchase agreement with Orchard Supply Hardware, under which Lowe’s will acquire the majority of Orchard’s assets for approximately $205 million in cash, plus the assumption of payables owed to nearly all of Orchard’s supplier partners. Upon completion of the transaction, the acquisition will enable Lowe’s to expand through a new store format and reach a new customer base in California with the addition of Orchard’s smaller-format metro store locations. Lowe’s plans to have Orchard operate as a separate, standalone business, retaining its brand under the leadership of Orchard’s current management team.

Based in San Jose, California and with fiscal 2012 annual revenue of $657 million, Orchard currently operates 91 neighborhood hardware and garden stores primarily located in densely populated markets in California. Under the terms of the transaction, Lowe’s would acquire at least 60 of these stores based upon further due diligence on the locations. On average, the Orchard stores, which offer a product selection focused on paint, repair and backyard categories, include approximately 36,000 square feet of selling space, compared to 113,000 square feet of selling space for an average Lowe’s home improvement store. Lowe’s currently operates 110 stores in California.

The transaction is expected to be consummated through a court-supervised process under Section 363 of the U.S. Bankruptcy Code and is subject to an auction and Bankruptcy Court approval. The agreement with Lowe’s will serve as the “stalking-horse bid” in the auction process. Earlier today, Orchard filed a petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.

Robert A. Niblock, Chairman, President and CEO of Lowe’s, said, “Orchard’s neighborhood stores are a natural complement to Lowe’s strengths in big-box retail, offering smaller-format hardware and garden stores catering to the needs of local customers. Strategically, the acquisition will provide us with immediate access to Orchard’s high density, prime locations in attractive markets in California, where Lowe’s is currently underpenetrated, and will enable us to participate more fully in California’s economic recovery.

“Overall, Orchard’s business model offers great potential but it has been burdened with a high level of debt. With the debt addressed through the Chapter 11 process and appropriate support from Lowe’s, we believe that Orchard will be positioned for profitable growth as a standalone business within our portfolio,” added Mr. Niblock.

Subject to the auction process, Court approval and customary regulatory review, the parties anticipate the transaction will close in approximately 90 days. Under the terms of the agreement, Lowe’s would receive a break-up fee of 3 percent of the purchase price should it not be successful in acquiring the Orchard assets. In addition, subject to Court approval, for an alternative bidder to be successful, it must outbid Lowe’s by a minimum of $12.0 million, representing $5 million in addition to the break-up fee and an expense reimbursement of $850,000.

Goldman Sachs is acting as financial advisor to Lowe’s, while Hunton & Williams LLP is acting as legal advisor.

With fiscal year 2012 sales of $50.5 billion, Lowe’s Companies, Inc. is a FORTUNE(R) 100 company that serves approximately 15 million customers a week at more than 1,750 home improvement stores in the United States, Canada and Mexico. Founded in 1946 and based in Mooresville, N.C., Lowe’s is the second-largest home improvement retailer in the world. For more information, visit Lowes.com.

JC Penney has launched a new home goods strategy that includes expansive home goods boutiques at 500 of their 1,100 stores.  CEO Ron Johnson calls the strategy “pivotal” to his efforts to revive Penney.

For seven years, home goods have been Penney’s worst performing category. The home category accounted for only 12 percent of sales in 2012, compared to 21 percent in 2006.

Penney’s neglected the home goods area to focus on improving its fashion collection, leaving consumers to choose from uninspired, deeply discounted goods. Penney’s new home goods section will be anchored by top designers, such as Jonathan Adler, Michael Graves, Sir Terence Conran and Martha Stewart.

The new home area will occupy up to 19,000 square feet of space, more than twice the size of a Williams-Sonoma store. Their desire is to bring in younger shoppers with attractive brands. They will also organize products by category at a variety of prices, and hold sales events and offer discounts.

Penney’s spokesperson Ellen Degeneres highlighted the JC Penney home goods boutiques on her show Thursday, May 30, by treating a family in need from Georgia to a shopping spree that replaced everything in their house from furniture to window treatments, bedding, dishes and accessories. They showed the boutique in an on-site store visit. The family was also awarded $15,000 from JC Penney to help them with expenses. Ellen’s show also gave each audience member a $100 gift card to spend at a JC Penney.

Kohl’s Corp. has hired Starbucks’ Michelle Gass, the executive responsible for developing the then new Frappuccino into a $2 billion a year business that makes up one fifth of Starbucks sales.

The move is part of Kohl’s strategy to recapture the growth it enjoyed in the 1990’s and early 2000’s. “We probably got a little complacent and I think there was too much sameness,” said chairman, CEO and President Kevin Mansell in an interview last week.  A difficult Christmas selling season in 2011, followed by inventory problems the following spring — Kohl’s missed big on colored denim, for example — reinforced the need for change.

“We completely re-invented our merchandising leadership — our buying, our planning and our product development,” Mansell said. “We completely re-engineered our information technology area with new leaders.”

As “chief customer officer,” Gass will oversee the critical marketing function, the company’s rapidly growing e-commerce business and what retailers have taken to calling the “omni-channel” approach — a blending of Internet and brick-and-mortar shopping.

“She knows the Kohl’s brand,” Mansell said. “She’s a mom. She understands the store. She understands the brand. She understands the challenge. She’s executed something similar to what we need to do here.”

Perfume maker Coty Inc. (COTY) is seeking as much as $1.1 billion on behalf of its shareholders in a U.S. initial public offering set for June 12. The company’s owners, including private-equity firm Berkshire Partners, plan to offer 57.1 million shares for $16.50 to $18.50 each. Coty will not get any proceeds from the IPO.

New York based Coty filed for its IPO in June of last year, but delayed plans to complete the sale until this year, in part to give CEO Michele Scannavini, who took over the role August 1, 2012, time to acclimate.

Bank of America Corp., J.P. Morgan Chase & Co. and Morgan Stanley are managing Coty’s sale. Coty, which holds perfume licenses for brands that include Marc Jacobs and Calvin Klein, was founded in 1904 in Paris by Francois Coty.

Coty’s offering comes at a time when other publicly traded peers such as Estee Lauder and Avon have surged. Estee Lauder gained 19 percent and Avon 64 percent.

The New York Times and Forbes have both recently approached an issue every retailer is struggling with: “showrooming”.

“Showrooming” is the phenomenon of customers browsing and researching the retailer’s products, only to purchase it elsewhere for a lower price.  Many big retailers such as Wal-Mart, Target and Best Buy are price-matching and requiring unique SKUs to try to combat this problem. But how can retailers combat “showrooming” and stay competitive at full price?

Brands and retailers must strategically work together to offer custom solutions to meet their shoppers’ needs. Forrester revealed that 35 percent of shoppers are interested in custom products. Making customization a core partnership strategy is key for growth and focuses on the customer experience. Nike launched a customization program that resulted in over $100 million in revenue.

Customization creates a partnership between customers and brands. Providing a unique experience for customers will cement their loyalty and they will not have any need to look to the competition. They will stay loyal to get products they cannot get anywhere else. Only through a strong strategic partnership between brands and retailers can “showrooming” be taken out of the equation.

JC Penney reported a loss of $348 million for its first quarter, compared to $163 million comp last year amid a 16% decline in revenue.  The retailer is struggeling to recover from the business plans former CEO Ron Johnson had put in place.

JCP’s new CEO Mike Ullman said that reconnecting with customer will take time and that they “recognized the magnitude of the challenges that we face, and we belive we can put JC Penney back on a pathway to profitable growth”.   One of the strategies to put them back on track is to emphasize thier private brands.

Source: Marianne Wilson, Retailingtoday.com