Retail Intelligence

Outsourced Services - v2

2011-11-17T08:01:00.001-08:00

OfficeMax enlists sales help of RadioShack in new pilot

November 16, 2011

NAPERVILLE, Ill. — OfficeMax has announced that it has entered into an agreement with RadioShack whereby RadioShack employees will offer mobile products and services, including prepaid and postpaid wireless products, accessories and service plans, as well as assist in selling OfficeMax consumer electronics products and services, in approximately 15 to 20 OfficeMax stores in the San Francisco market. The pilot program will begin in January 2012.

"We are evaluating a range of strategic retail partnership arrangements that will improve store productivity and make our stores a highly attractive destination to our customers," said Ravi Saligram , president and CEO. "We are excited to bring in RadioShack's expertise in providing wireless solutions and consultative sales expertise which will complement our enhanced technology offering in our upcoming pilot."

So - OM saves expenses in payroll, benefits and training and in return adds incremental expense in outside services? But, more importantly will store level cultures clash? Will supervision be challenged? Will customer service be compromised? We've been in this EXACT situation and we can tell you that ALL of these and more will be issues. This is not seamless.......

Seems Like There Should Be More....

2011-10-18T07:52:00.000-07:00

Lowe's scales back store plans

October 17, 2011 | By Gail Hoffer

MOORESVILLE, N.C. — Lowe's Monday announced that it would close several stores and discontinue a number of planned new store projects as the company looks to bounce back from a second quarter of declining earnings and flat same-store sales.

The company closed 10 locations on Oct. 16 and said it would close another 10 within the month, following an inventory sell-through.

In addition, after completing a comprehensive review of its pipeline of proposed new stores, the company announced it has discontinued a number of planned new store projects. Lowe’s said it now expects to open 10 to 15 stores per year in North America from 2012 forward, compared with a prior assumption of approximately 30 stores per year. The company said it is on track to open approximately 25 stores in 2011, as planned.

“Closing stores is never easy, given the impact on hard-working employees and local communities,” said Robert Niblock, chairman, president and CEO. “However, we have an obligation to make tough decisions when necessary to improve profitability and strengthen our financial position.

“Lowe’s remains committed to making strategic investments and focusing resources in a manner that will generate the greatest shareholder value, enhance the customer shopping experience and create sustained customer loyalty over the long term,” added Niblock.

Lowe's said that approximately 1,950 employees will be affected by these closings. The company said it will be working with local government agencies to help employees with outplacement assistance.

This will be NOT be without Great Pain...

2011-09-26T09:50:00.000-07:00

Target's expansions into new areas have never gone smoothly. From Texas in the 70's to the AirWays expansion in Indiana to the California stores of Fed Mart, to Florida and New York. A combination of arrogance and underestimation have cost millions of dollars and the positions of countless associates that pay the price with their jobs.

Target puts final Canadian plans in motion

September 23, 2011 | By Gail Hoffer

MINNEAPOLIS — Target's entry into Canada is nearing completion, as the company Friday finalized its real estate transaction with Zellers Inc. with the selection of 84 additional Zellers leases, bringing the total number of leases selected, including an initial group of 105 leases selected in May, to 189. From this second group, Target has acquired the leasehold interests for 29 locations, the vast majority of which will open as Target stores beginning in 2013. The remaining leases have been or will be sold to other Canadian retailers or back to landlords.

Target's venture into Canada began in January when the company announced that it had agreed to pay C$1.825 billion to purchase from Zellers Inc., a subsidiary of the Hudson's Bay Company, the leasehold interests in up to 220 sites currently operated by Zellers Inc.

“Target is excited to take another meaningful step toward our expansion in Canada,” said Tony Fisher, president, Target Canada. “We look forward to delivering a superior shopping experience for our guests throughout Canada and building on our strong reputation as a good neighbor and partner in the communities in which we do business.”

Target said it plans to open 125 to 135 stores in Canada, the majority of which will open in 2013, beginning with the first cycle in March and continuing with four subsequent cycles later in the year. The company said it will invest about $10 to $11 million in remodeling each location. Locations for the March 2013 store openings will be revealed in the coming months, Target said, with subsequent opening cycles to be announced throughout 2012.

When Target's Canada stores do open, they will face competition from a number of retailers including Walmart, which ended last year with 325 stores and has plans to open 40 additional stores this year, bringing its total count by year's end to roughly 333 stores. Walmart is in the midst of a U.S.-style supercenter conversion, so by the end of this year roughly half of the company's roughly 333 units will be supercenters, and by 2013 the total store count figure should be north of 350 with supercenters accounting for roughly two thirds of the total and that’s assuming expansion and conversion activity doesn’t accelerate from the current pace in anticipation of Target’s arrival.

A Very Good Thing for Retail...

2011-09-19T08:28:00.000-07:00

Q2 results leave Pier 1 confident heading into holidays

September 15, 201

FORT WORTH, Texas — Pier 1 reported sales and earnings growth for its second quarter, leaving president and CEO, Alex Smith confident about the future of the company heading into the holiday season.
Alex Smith, president and CEO, commented, “We are very pleased with the results of our second quarter. Sales growth and merchandise margins remain strong, and we continue to demonstrate the strength and sustainability of our business. Our growth plan is firmly on track, and we have returned value to our shareholders through the completion of our $100 million share repurchase program. It is hard to predict how the economy will fare over the next several months, but we fully expect our business to be successful through the fall and holiday selling season.”

Pier 1 Imports reported that net income for its second quarter ended Aug. 27 was $16.6 million, or 14 cents per share, compared with net income of $14.4 million, or 12 cents per share, for the same period last year. Total sales for the second quarter were $339.6 million, a 9.6% increase from $309.9 million in the year-ago quarter. Comparable-store sales increased 10.8% during the second quarter compared with last year’s comparable-store sales increase of 11.2% for the same period. According to the company, the sales increase for the quarter was primarily the result of increases in store traffic and average ticket.

Planning a Wine Country Visit

2011-09-12T09:10:00.000-07:00

Vineyard Visits Eliminates Time Spent Planning CaliforniaWine Country Trips

Vineyard Visits announced today it has launched a newCalifornia Wine Country trip planning service.

Los Angeles, CA,: Vineyard Visits (www.vineyardvisits.com) launchespersonal wine country visit planning services focused on California WineCountry.

“VineyardVisits was created to take the time and hassle out of planning a dailyitinerary in wine country” stated Dave Uhlman, Owner/Planner of VineyardVisits.

“I am excited to help visitors maximize their time inwine country by providing them an itinerary that is built upon what they likeand want to do.”

Vineyard Visits starts by talking to their clientsabout what they want to do. “We think it’s all about how they want to spendtheir time.” Dave added. Vineyard Visitsconducts initial phone or video phone Status Meetings with every client beforeany trip is planned so that client preferences are used to build the trip.

Vineyard Visits then delivers comprehensive visitplans from airport arrival to first winery of the day to valley departure. Find out more at http://www.vineyardvisits.com or call 310.372.3706 for more information.

About Vineyard Visits: Vineyard Visits isa proud provider of California Wine Country trip planning services. For one low price Vineyard Visits willprovide a 1-3 day California Wine Country itinerary.

Find Us on Facebook: www.facebook.com/vineyardvisits

The Rule of Three Always Applies....

2011-09-08T07:41:00.000-07:00

Three of anything... is one too many...
ODP makes the grade, OfficeMax fails in BTS sales

September 7, 2011 | By Gail Hoffer

NAPERVILLE, Ill. and BOCA RATON, Fla. — OfficeMax and Office Depot had very different things to say about their respective back-to-school sales performances during presentations at the Goldman Sachs Annual Global Retailing Conference.

OfficeMax has been experiencing slower sales as consumers continue to be price conscious. In addition, Ravi Saligram, president and CEO of OfficeMax, reported that back-to-school sales are soft and the company is experiencing weaker technology sales.

"Consequently, we are continuing to focus on providing products that are a good value, as well as managing gross margins and costs in the third quarter and second half of the year," said Saligram
.
OfficeMax said it now anticipates that total company sales for the third quarter of 2011 will be slightly lower than the third quarter of 2010, including the favorable impact of foreign currency translation. The company is maintaining its guidance for total company sales for the second half of 2011 to be slightly higher than the prior-year second half, including the favorable impact of foreign currency translation and the benefit of the additional fiscal week in the fourth quarter.

OfficeMax's presentation at the Goldman Sachs conference can be viewed at investor.officemax.com until Oct. 7 and will be posted on the "presentations" page located within the "Investors" section of the OfficeMax website.

From Highly Profitable to Up For Sale - in 5 years

2011-08-26T11:50:00.000-07:00

Collective Brands to close 475 underperforming stores as it considers selling itself

August 25, 2011 | By Katherine Field Boccaccio

TOPEKA, Kan. — Collective Brands, parent company of Payless and Stride Rite shoe chains, announced Wednesday that it would close 475 underperforming stores over the next three years and has hired a firm to help it explore its options.

The company hired Perella Weinberg Partners and Kurt Salmon as advisors to explore strategic alternatives.
Collective Brands reported a 2Q loss of $35 million on Wednesday, compared to a profit of $21.1 million a year earlier. The loss included a one-time charge of $83.6 million based mostly on the declining value of its stores and of Stride Rite’s trade name. The company currently operates 4,844 stores, of which 4,461 are Payless stores.

Of the 475 stores targeted for closure over the next three years, more than 300 will be shuttered by the end of the year, including about 275 Payless and 75 Stride Ride children's stores. The strategy, said Collective, is to optimize the performance of its Payless and Stride Rite stores.

"While the second quarter was challenging for the company, we are taking aggressive actions to improve the business," said CEO Michael J. Massey.

When You Start To Become Yesterday's News...

2011-08-18T12:39:00.000-07:00

Profits trend lower at Urban Outfitters

August 16, 2011 | By Staff Writer

PHILADELPHIA — Urban Outfitters, which caters to a clientele with a unique and forward-looking approach to fashion and lifestyle merchandise, missed the mark during the second quarter, reporting a 21% profit decline and a same-store sales slip of 2%.

But Can They Stay In-Stock?

2011-08-17T11:14:00.000-07:00

Game on for sports fans at Old Navy

August 16, 2011

NEW YORK — Gap’s Old Navy unit rolled out more than 1,000 sports-oriented store-within-stores Game on for sports fans at Old Navy

August 16, 2011

Tuesday, selling branded goods of more than 70 Division I schools, as well as National Football League teams.

The Super Fan Nation in-store concepts are being launched with a seven-figure marketing campaign that will include advertising at college stadiums and arenas, in-store appearances by college bands, cheerleaders and mascots, and a 10-day national television advertising campaign.

Old Navy began selling some sports merchandise in 2009, and the retailer said strong historical performance from the category made the expansion a natural fit. “The sports connection should have always been part of our DNA,” said Michelle Wlazlo, senior VP for merchandising.

The sports apparel and merchandising are exclusively designed for, and sold at, Old Navy. Clothing items will begin at $14.94, while accessories will retail from $5.50.

www.cpointe.com

The Question - What Took So Long?

2011-08-02T07:10:00.000-07:00

Game on: GameStop offering in-store purchase of PC titles

By ghoffer

Created 07/28/2011 - 16:36

GRAPEVINE, Texas — GameStop announced that it is now offering customers the ability to purchase digital PC games at their local store and access the titles immediately at launch. This service is available exclusively at GameStop and customers can use any form of accepted payment to make their purchase. "Deus Ex: Human Revolution" is the first of what will soon be many titles to support this new purchase method, the company reported.
“This is a great illustration of how the digital distribution model and in-store experience really complement one another,” said Steve Nix, GameStop’s general manager of digital distribution. “We have seen great success selling DLC for console titles in our stores, so expanding on that model and helping customers discover digitally distributed PC games in stores is a natural fit.”

Target in union’s sights

2011-07-25T15:55:00.000-07:00

As discounter grows, so does labor trouble

ANNE D’INNOCENZIO Associated Press

NEW YORK

Target now has 1,700 stores, up from 1,050 a decade ago, and its challenges have grown as well.

Target is having labor pains.

Until recently, the Minneapolis discounter largely had avoided the labor disputes and public relations challenges that have plagued Wal-Mart, the world’s largest retailer. But now Target could face the same union opposition as its much bigger rival.

Target had its first union election in two decades in June amid allegations by workers of skimpy wages and reduced hours at a Valley Stream, N.Y., store. The measure ultimately failed after Target suggested to workers that the store might not survive if they vote to unionize.

But the labor dispute – and Target’s handling of it – is widely seen as a precursor to a bubbling national battle between Target and labor groups similar to the one Wal-Mart has been locked in for at least a decade.

In addition to New York, more labor disputes are expected in big cities such as San Francisco, Seattle and Minneapolis – where Target is based and remains the second-largest employer behind the Mayo Clinic.
The opposition is coming at a particularly vulnerable time for Target, which is grappling with slack sales growth as shoppers are pulling back amid the painfully slow economic recovery.

Already, the United Food and Commercial Workers International Union’s Local 1500 New York chapter, which organized the election in the Valley Stream store, intends to contest the election results and ask the government to order a new one because it says Target intimidated workers. It also plans to fight to get all 26 stores in the New York area unionized.

And the UFCW’s local 1189 in St. Paul, near Minneapolis, is using the New York election as an impetus to recharge its campaign, which failed a couple of years because it didn’t collect enough votes.
The chapter is organizing a group of people to go door-to-door to almost 2,000 Target workers in four stores. It’s also planning to reach out to UFCW’s local Chicago, San Francisco and Seattle chapters to enlist them to join the battle.

“I was inspired. Once we heard that Local 1500 had been building toward an election, we thought we better ramp it up,” said Bernie Hesse, director of special projects at UFCW’s St. Paul chapter. “We have been intrigued with what a national campaign may look like.”

Target Corp. declined to comment on its strategies to counter an escalating labor fight, but spokeswoman Molly Snyder said the company does not intimidate workers or have any “companywide efforts to restructure or reduce hours.”

“Our emphasis is on creating a workplace environment where our team members don’t want or need union representation,” Snyder said.

Change Has Already Come to Penney

2011-07-21T07:21:00.000-07:00

Long-time JCPenney marketing chief retires

July 20, 2011 | By Katherine Field Boccaccio

PLANO, Texas — JCPenney said Tuesday that its veteran marketing chief Mike Boylson has retired from the company. His successor will be selected by newly minted CEO Ron Johnson in what will be the former Apple executive’s first senior-level appointment at JCPenney.
Boylson was with the department store chain for more than three decades, the last eight years as chief marketing officer. He said in June he would retire from the company on July 1, according to a JCPenney spokeswoman.
Boylson was instrumental in the retailer’s launches of such brands as Liz Claiborne, MNG by Mango and American Living by Polo Ralph Lauren Corp.
In the interim, while Johnson works to fill the position, former SVP marketing planning and promotions Bill Gentner will serve in the position

Best Buy to shrink its footprint

2011-06-23T07:57:00.000-07:00

"The old joke is that Best Buy is Amazon's showroom," said Scot Ciccarelli, a senior retail analyst with RBC Capital Markets.

Big-box retailers: Electronics retailer Best Buy to shrink its brick-and-mortar footprint - latimes.com

So Who Does This Remind You Of?

2011-06-21T07:46:00.000-07:00

MINNEAPOLIS — Best Buy reported Tuesday that net income for the first quarter fell 12% to $136 million, or 35 cents per diluted share, hurt by increased promotions and lower demand for such items as flat-panel televisions and digital cameras.

Revenue edged up 1% to $10.9 billion on a 12% jump in online revenue. Same-store sales dipped 1.7%. However, domestic online sales rose 12%, while domestic mobile-phone comparable sales jumped 28%. Tablet computers, digital book readers, appliances and services also saw higher demand. Best Buy has shored up its profit picture by shifting toward more profitable products such as mobile phones, video games, appliances, e-readers and tablets.

Store sales down? Store footprint being downsized? Sales being transitioned to online? Seems like issues faced by Circuit City about 7 years ago. Will BB navigate them successfully? Stay tuned.

Good News: Swipe-Fee Reform Amendement Squashed

2011-06-10T09:17:00.000-07:00

WASHINGTON — The retail industry won a big victory in Washington, D.C., as the Senate defeated an amendment that proposed to delay swipe-fee reform for another 12 months.

As reported Wednesday morning by Drug Store News, Sens. Jon Tester, D-Mont., and Bob Corker, R-Tenn., offered an amendment to legislation that was designed to delay swipe-fee reform — which is set to go into effect July 21 by the Federal Reserve — and built on Tester's previously introduced Debit Interchange Fee Study Act of 2011. The Senate vote was 54-45, with one senator opting to not vote, leaving the amendment six votes shy of approval.

The retail industry, particularly the lobbying groups, lauded the decision late Wednesday.
“This is a landmark victory for American consumers that will give them the break from skyrocketing swipe fees that they have been seeking for years," National Retail Federation president and CEO Matthew Shay said. "With the economy still trying to gain momentum and consumers facing skyrocketing costs for necessities like food and fuel, this badly-needed reform will help ensure our nation’s economic recovery. It will prevent more than a billion dollars a month from being pocketed by big banks and, in turn, allow retailers to hold down prices for consumers."

The National Association of Chain Drug Stores, which represents the drug retailing industry, said the defeat of the amendment was a victory for both consumers and the retail industry, curbing costs that affect each group.
“We thank Sen. Dick Durbin,D-Ill., for his leadership in bringing this issue to the forefront of Congress, and working diligently to prevent a delay to the pro-retailer and pro-consumer swipe fee reform,” NACDS president and CEO Steve Anderson said.

How Apple Stores rewrote the rules of retailing - USATODAY.com

2011-05-19T08:03:00.000-07:00

This is what happens when you acknowledge the importance of customer service; pursue it vigorously and live it. Or, what happens when you trivialize it.

How Apple Stores rewrote the rules of retailing - USATODAY.com

Will Customers Pay More For Good Service?

2011-05-09T07:36:00.000-07:00

NEW YORK — Good customer service sells, according to a new study conducted by American Express.

American Express' Global Customer Service Barometer discovered that 7-out-of-10 Americans are willing to pay an average of 13% more with companies they believe provide excellent customer service, compared with 58% of Americans that echoed this sentiment in 2010. But while Americans put a heavy emphasis on good customer service, most (60%) believed that companies haven't stepped up their game to improve their focus on providing good customer service. Among them, 26% believed that companies are paying less attention to their customer service.

What's more, nearly 8-out-of-10 consumers (78%) said they will bail on a transaction or opt not to make an intended purchase because of a poor service experience. American Express also noted that 2-in-5 (42%) consumers said companies are helpful but don't do anything extra to keep their business, while 1-in-5 (22%) thought companies take their business for granted.

However, 3-in-5 Americans (59%) that have a better service experience said they would try a new brand or company.

For adult shoppers seeking a company that puts a great emphasis on customer service, 81% of respondents said that small businesses are the way to go. "Getting service right is more than just a nice-to-do; it's a must-do," American Express EVP world service Jim Bush said. "American consumers are willing to spend more with companies that provide outstanding service, and they will also tell, on average, twice as many people about bad service than they [will] about good service. Ultimately, great service can drive sales and customer loyalty."

The American Express Global Customer Service Barometer research was completed online among a random sample of 1,000 U.S. consumers ages 18 years and older.

Not Sure it's a Marketing Issue....

2011-04-19T08:00:00.000-07:00

BOCA RATON, Fla. -- Office Depot didn’t have to look far in its search for a new agency of record, as the Boca Raton, Fla.-based office supplies and services company announced the selection of Fort Lauderdale-based Zimmerman Advertising.

“We are impressed by Zimmerman’s strong understanding of the retail sector as well as their ability to turn marketing challenges into sales results,” said Neil Austrian, Office Depot’s interim chairman and CEO. “Zimmerman lives and breathes retail. This expertise combined with web and direct marketing know-how will play an important role in helping Office Depot meet our business objectives.”

Zimmerman Advertising is the nation’s 14th largest advertising agency and part of the Omnicom Group.
“Our mission is to help Office Depot more effectively reach and impact consumers during what continues to be a challenging economy for its core target of small and medium-size businesses,” said Michael Goldberg, Zimmerman’s EVP and chief marketing officer. “Office Depot is a world-class brand and we believe there is so much potential in helping to reestablish its place in the minds of today's consumers.”

It has been a rough couple of years for Office Depot, as a weak economy took a toll of sales and profits. Last fall amid deteriorating results, the company announced the departure of Steve Odland as chairman and CEO and a search for a replacement is now in its six month, with Austrian continuing to serve in an interim capacity. Most recently, the company stumbled when the Internal Revenue Service determined some losses were improperly accounted for, which forced the company to restate financial results that turned a meager 2010 profit of $33 million into a $46 million loss.

Zimmerman thinks it can help turn around the company’s fortunes.

Creative Channel Services - Quality Training: Delivered

2011-04-05T08:18:00.001-07:00

LOS ANGELES -- Creative Channel Services announced that it has significantly expanded its partnership with Sears Holdings Corporation by providing the CyberScholar employee-learning platform to five of the retailer's store brands that carry home appliance and consumer electronics products. CCS has been delivering the CyberScholar solution to Sears' full-line stores and now will deliver product and sales knowledge to Kmart, Sears Home Appliance Showrooms, Sears Appliance & Hardware, and Sears Hometown stores.

CyberScholar (www.cyberscholar.com) is CCS' proprietary digital product-knowledge platform, enabling leading manufacturers to connect their brands to retail associates. The site offers manufacturers an economical solution to deliver training to dispersed stores, while offering retailers a flexible way to educate their staff and measure employee knowledge. More than 200,000 retail associates nationwide complete millions of individual product-information modules over the CyberScholar Network each year, increasing their product knowledge in order to elevate the customer's shopping experience and deliver sales performance.

"Creative Channel Services is pleased that Sears Holdings Corporation has expanded its relationship with us to include five of its retail formats that sell electronics and appliances," says Andy Restivo, CEO and president of CCS. "Additional Sears employees and the Sears Hometown Stores Dealers now have access to standardized, up-to-date product information from dozens of manufacturers, which will help to increase in-store product knowledge and enhance millions of Sears' customers buying decisions."

And They Needed It.....

2011-04-01T08:08:00.000-07:00

Sony brings a New Experience

LOS ANGELES -- Sony Electronics announced that on April 1 it will open its first newly branded Sony store in the United States at the Westfield Century City Shopping mall in Los Angeles.

According to the company, the 4,200-sq. ft. store offers customers a full interactive experience with Sony's wide range of products. To encourage this experience, the store features an open space with products displayed on tables, Sony said. In addition, the store features movable interior walls and changeable color schemes so that it can be adapted and reconfigured to highlight specific products, services, or create fresh experiences for returning customers.

While in the store, customers can test out Sony's network services -- including Music Unlimited and Video on Demand powered by Qriocity -- on network-connected products, to playing PlayStation's GranTurismo 5 on a PS3 and a Sony 3DTV. They will be able to shoot video on a wide range of cameras, get lost in a 3D movie from Sony Pictures, and test headphones while listening to Sony Music artists.

The store also provides a place to learn about future and emerging technologies and innovations, such as the RayModeler, a futuristic 360-degree display prototype that projects a 3D image that can be seen from all angles.

While in the store, customers will have access to a trained staff that can assist with setting up all products, activation of wireless services, and technical PC and IT support, Sony reported. Also available are in-home consultation, delivery, and TV, and home audio and video installation by authorized technicians.

"Sony's goal is always to exceed customer expectations by providing an exciting, interactive and entertaining shopping experience," said Phil Molyneux, president and COO Sony Electronics. "Our new store concept gives shoppers an opportunity to interact with trained and knowledgeable staff as well as preview, test, compare and unlock the full potential of Sony's entertainment offerings."

Blockbuster to close another 186 stores

2011-03-31T07:34:00.000-07:00

DALLAS -- A Wall Street Journal report on Monday said that, according to court filings, Blockbuster will start closing 186 more stores by the end of the month, bringing the number of its U.S. locations closed or slated for closure to 1,145, or more than a third of its total, since the video-rental chain filed for bankruptcy protection in September.

In filings Friday with the U.S. Bankruptcy Court in Manhattan, Blockbuster said it will reject the leases on 186 of its stores by March 31.

Among the markets that will be most affected are California and Texas, which each face double-digit store closings.

In February, the bankruptcy court approved procedures for the auction of Blockbuster, with an initial $290 million stalking-horse offer from a group of senior bondholders led by New York-based hedge fund Monarch Alternative Capital. The ruling staved off the threat of immediate liquidation of Blockbuster's assets.
Blockbuster will use proceeds from the sale, whether it is to the Monarch group or a higher bidder, to pay its debt to movie studios. The studios have agreed to continue shipping DVDs to Blockbuster stores.

Great News for REI

2011-03-29T07:47:00.000-07:00

REI posts 8.1% comps growth for 2010

March 28, 2011
Retailing Today.com

SEATTLE -- REI (Recreational Equipment Inc.) announced 2010 sales of $1.66 billion, up 14% from $1.46 billion the previous year, proving that even in a down economy outdoor enthusiasts will find ways to support their passion. Net income in 2010 was $30.2 million, up 1.4% from $29.8 million in the previous year. The company’s direct sales channel, which includes online and catalog sales, grew by 22.9%. Comp-store sales grew by 8.1%, up from negative 3.5% in 2009.
“REI achieved remarkable results last year in an economy that remained uncertain, and I credit the dedication and commitment of our more than 9,500 employees who are focused on serving our members and customers. Our performance positions REI well for ongoing strategic growth and business investments,” said Ivar Chhina, REI’s CFO and EVP. “As the nation’s largest consumer cooperative, we are extremely pleased to also share our success with our members, communities and employees.”
By year-end 2010, REI operated 114 stores, including four new stores in Arizona, Connecticut, Maryland and Montana. The company also relocated two stores last year in California and Montana. Seven new stores will open in 2011, including Dublin and Santa Barbara, Calif.; Paramus, N.J.; Carle Place, Manhattan and Yonkers, N.Y.; Olympia, Wash

Best Buy to get Smaller

2011-03-25T14:46:00.000-07:00

Best Buy Beefing Up Web, Downsizing Stores

By Alan Wolf -- TWICE, 3/24/2011

Minneapolis - Best Buy is rebalancing its channel strategy to address market share gains by online retailers, including Amazon.com.

In the process, the company is dramatically expanding its online-only assortment, where it is promising more competitive pricing, and is shrinking the footprint of some of its big-box stores as they come off lease.

It also has not ruled out the possibility of closing some of its larger locations.

In an earnings call this morning to discuss the chain's fourth-quarter results, CEO Brian Dunn stressed the importance of maintaining a brick-and-mortar presence to differentiate Best Buy from online-only competitors. Stores allow in-person consultations with sales personnel, provide a convenient pickup option for e-commerce orders, and will give the company a competitive advantage should tax policy favoring e-tail-only merchants change.

Nonetheless, he acknowledged, "We are very carefully looking at our square-footage requirements" and are "redefining the optimal big-box store size," while co-Americas president Shari Ballard pointed to "opportunity in smaller-format stores."

Meanwhile, Best Buy is reallocating space and labor in its big-box stores to three low market-share categories where it sees the greatest opportunities for growth: mobile, gaming and appliances. According to co-Americas president Mike Vitelli, mobile departments will receive more accessory SKUs, gaming areas will benefit from the rollout of trade-in and pre-order services, and majap departments will begin incorporating processes gleaned from its eight in-store Pacific Sales concept shops on the West Coast.

Room for the department expansions will come from declining categories like CDs, whose floor space is being cut by half.

In addition to improved space utilization, the changes to Best Buy's business model will also help attract new customers, the executives said.

Ultimate Electronics - A Phoenix?

2009-10-05T10:31:00.000-07:00

"Ultimate Electronics signed a lease on an old Circuit City building and is about to sign another," CoStar.com. 9-30-09.

Ultimate Electronics is on the rise - again. The quote above appeared online at CoStar.com which is the engine for commercial real estate companies across the US. There is talk that Ulimate is out looking for as many as 30 stores in California for next year.

Channel vets will remember the rapid rise and descent of this electronics chain out of Denver. At a time when CompUSA, Circuit City and others were struggling to maintain they tried to explode. And they did - or rather imploded. Can they do it again, but get it right this time?

There certainly is far less competition in retail storefronts. Only Best Buy on a national basis carries depth in the categories. I say they have a good shot.

Who knew we'd miss Circuit City?

What Are Retailers Waiting For?

2009-08-06T08:42:00.000-07:00

July retail sales are coming out today and there is very little good news. Target is down more than expected. Macy's off more than 10 points. The GAP is down 9 points. The Back to School time period should be a perfect time to get creative but it doesn't look like anyone is.

What we can't figure out is why retailers are not stepping up? Restaurants sure are.

Let me tell you - this group gets it. This is not the time to do "business as usual" or to "return to basics" or maybe just cut expenses and "ride it out". Restaurants are really adapting and marketing to bring in traffic. They have pulled out all the stops.

Roy's was one of the first to get going with their 3 course prefix meals at great prices. They started a year ago. TGIFridays created all multi course meals, something called "Right Portion-Right Price". Almost every other major restaurant group has come up with some kind of special price or special portion.

Even boutique restaurants are creative with happy hour specials, early bird dinners, late night appetizers, you name it.

How come retailers can't take the hint and get going?

How about special sale hours during the week? Say 4-6? Maybe partner with a restaurant chain and work a deal that pays the customer for shopping and eating at both?

How about a new spin on the old frequent buyers card? Family underwear purchases that result in a reward after so many purchases?

It is Back to School time? So how about a retailer donating to the local school district a portion of the nights sales? 2% to the Buckeyes? 2% to the Cougars? Wouldn't Mom look to make her money work in more ways than one?

Come on Retailers! Get a clue from your brethren in the Restaurant Business! Get Creative and Get More Customers in your doors!

Is There a Tenant Out There?

2009-07-29T11:44:00.000-07:00

It's been 10 months now learing about commercial real estate. Here's what I know.

One - there are very few retailers or restaurants who are actively looking to open new stores. Some will tell you they are- and perhaps there is a shred of truth. If they can find landlords that are on their death bed - then maybe. If they can find AAA markets at B market prices - maybe. But otherwise - save your breath.

Two - there are landlords out there who think that their development is immune to the current roll back in lease rates. These landlords seem to think that just because they bought the dirt that makes it still work inflated rates. They take so long to come to reality when presented with an offer that the retailer who made it can find two others to take their place.

Three - banks care little. The financial institutions have some compasion but not much. They drive harder on the front end and they drive harder on the back end of the deal. They make the deal take longer, cost more and mean less by the time it gets done - if it does.

There is nothing much happening but everyone is busy rushing from call to call. Chance to chance. All the while hoping that their deal will work.

Retail Stablility

2009-07-20T12:36:00.000-07:00

I just finished reading this weeks blog post of the Brazen Careerist by Penelope Trunk. She writes that the new coin of the realm is stability in our current economy. That you get stability by either creating it - or selling it.

That got me to thinking about retail stability. Is there such a thing and where would you look for it?

Setting aside that we could discuss the stability of say Target vs Eddie Bauer what I'm really thinking about is just what jobs in retail are stable? If I was growing my career what would I be pointed to?

Store management positions are very stable. Not too many companies are going to be able to open the doors, greet the customer and make a sale without it. No one argues that online has eaten into brick & mortar - but it's not going away anytime soon. So these jobs are golden.

Distribution? Yep - you have to move your inventory from point A to point B. So gaining experience and moving up in a distribution pyramid will keep you stable for a long time.

Buying? Yes - but perhaps not as much since systems allow more to be done with less people and the developmental positions or Asst Buyer, Product Mgr, etc will be challenged to be cut back.

So what's not so stable? Marketing, Human Resources, Training, Operational Support, etc. These groups are there to add depth to the company, resources to improve, critical evaluations of process and in short make the most of a good thing. In this economy it's all about holding on till the bottom is felt and the upswing begins. Until then it's best - and most stable to be developing your career in the meat and potatoes of the business.

2009-07-14T13:38:00.000-07:00

The premise is that today there are more people unemployed and for the first time in their lives have to look for a job.

If you consider that until this economy most job changers already knew where their next job was going to be when they left their last job then there are generations of people who are struggling with how to go about finding a job. Losing your Job is traumatic. How do you get through it, pick yourself up, organize yourself and get to work finding your next position.

There are generations of people that have never had to look for a job. That's why Kerry Kelly, an industry leading recruiter for over a decade and Dave Uhlman, Co-Founder of CPointe Associates, have created a brand new, interactive and engaging 120-minute WebCast Seminar, “Shape Your Next Career®.

If you are one of the generations out there who has not ever had to look for your next position – then this seminar is a must. Has it been years or several job changes since you didn't know what your next position was going to be? Then you need to invest in yourself! Whether you are 25 or 55 don't assume you know how to mentally, emotionally, physically or organizationally are skilled at SYNCing up your career

SYNC is the real deal and you can find out more by clicking here.

Just a Follow Up

2009-07-02T09:14:00.000-07:00

Our last post talked about innovating with Cisco's TelePresence system. Looks like a couple big hotel players - Marriott and Starwood - are already thinking along the same lines. Take a look at the articles.

Marriott: http://tinyurl.com/lyvuz9

Starwood: http://tinyurl.com/nuu9yh

Seems like these two players will have the chance to drive new revenue streams into their hotels for all kinds of things. Stay tuned!

So Where is the Innovation?

2009-06-26T08:32:00.001-07:00

Think back over the past years - and maybe decades - about exciting retail concepts and retailers that were setting the pace. And then ask yourself - who is setting the pace now?

In the 70's discount stores Target, Wal-Mart and yes back then even K-Mart were re-imagining how their customers wanted to shop. In the 80's we saw specialty store like GAP and Banana Republic along with some of the first big box stores. In the 90's those big boxes like Home Depot, CompUSA, Staples and Price Club went crazy. The early 2000's have seen the resurgence of specialty store as the economy surged: Urban Outfitters, Juicy Couture, Coach and others.

But - what's happening now? Not much. I know that the economy is bad, banks are not lending but now would be the time for a creative retailer to step forward.

I recently had the chance to listen to some ideas that social websites such as YouTube would open brick & mortar stores where you could watch with others and have a coffee or such. Maybe Twitter will open a place where you can watch posts on a big screen or multiple screens.

How about shopping in a store in Milan using Cisco's TelePresence while standing in Los Angeles? Too far out there you say? Ok - what's your idea?

Eddie Baus Out

2009-06-18T11:02:00.000-07:00

They finally did it - filed Chapter 11. It's been out there for a long time so it's not a surprise.

Since Holiday time the stores have felt understocked and not in step. Same colors, fabrics, patterns as all last year. Email blasts looked the same and may even have been the same product for all I know. I've gave up on them as you can tell.

And this is from a loyal customer. I call myself that because between Eddie Bauer and Nautica apparel that's pretty much what I wear. I really like EB's quality and I used to like their looks but for sometime I couldn't find anything I actually wanted to buy. Guess there are lots of others out there who feel the same. That's what pretty much what C11 is about. A lack of interest.

Will they come out of it - probably. But if they don't get a new direction, with a new senior merchant and a group of buyers that understand today's active adults and what they want and want to look like - it won't matter much.

For me - I'll wait and see. After all - I'm a loyal customer.

Sear Outlet Stores Face Conundrum

2009-06-15T14:53:00.000-07:00

What comes first - sales of new product or sales for outlet stores? That's really the conundrum facing Sears Holding Company as it grows the Sears Outlet stores across the nation. How do you maintain stock levels in outlet stores if you don't have enough "scratch & dent' to go around?

Prices are great in Sears Outlets where washers, dryers, refrigerators that have gone out to someone's home and come back are being sold. These items have been rigorously tested and then sent to what may be referred to as a "hub" store of the chain in a metro or regional market. Once there the "hub" store sends out excess items to other stores it's responsible for stocking. There's the rub - at least as far as the "spoke" stores are concerned. Inventory is a crap shoot. Oh, you might have enough washers in total - just not the right ones. Too many large capacity in a predominately renter/single neighborhood for example. And do you think the "hub" store cares if the "spoke" stores make their sales? Doubtful.

Now, at the even bigger picture level, what happens when sales at top level Sears stores slow down - say in an economic downturn? Not enough going into the pipe means not enough coming out of the pipe for the outlet stores. Makes you wonder just how many is too many doesn't it?

Retailers Cut Back Where It Hurts Most

2009-06-09T12:55:00.000-07:00

Spent some time last night talking with a rep that has custom shower doors in one of the big box home stores. My first comment to him was "business must be awful"! While he agreed that it was not living up to LY he did say his company had made many concessions to help the retailer and themselves drive sales.
He talked about how they lowered cost; visited stores routinely to provide training to new associates; faster turn around time on orders. Everything short of subsidizing payroll in the store.
The good news is he routinely finds customers shopping his shower doors and wanting to spend money. But - today he seldom finds associates available to help them. Custom shower doors don't sell themselves. "We could both be doing better if there was someone to help the customer".
The retailer in this case makes a margin of 35% while, according to the rep, they are left with about 10 points on an average sale. "We just don't have any more money to give them" he said.
Retailers need to keep their end of the bargain and provide the customer - and their vendors - the payroll support necessary to make sales happen. Not every category in a store sells itself. Today's technology should allow for associates to be quickly sent to high customer service areas.
There is a way - if there is a will - to balance both ends.

Today's Retailers and Email Marketing

2009-06-09T12:53:00.000-07:00

I had the chance to listen to 8 major retailers present to a large audience in Las Vegas last week at ICSC. ICSC is, of course, the international gathering of commercial real estate groups. This "Retail Runway" presentation was meant to reassure the channel that while the economy is tough - there is still plenty of growth planned.
I'm not sure that message got through - or was believed - but oh well.
As I listened to executives from Pinkberry, Auto Zone, Wal-Mart, Darden Restaurants and the others I tried to listen for opportunities that maybe were being seized on now or maybe ones being missed. I heard both from Collective Brands.
Collective Brands as you know is Payless ShoeSource and Stride Rite. John Smith, Exec VP of Corporate Development from the company reminded us that they sell more shoes than Wal-Mart. What really perked my ears up was when he talked about using text messages to drive visits. If you text a certain number from your cell phone the ccompany will send you back a coupon good for discounts in their stores. Sounds like a very good idea! Since Payless leverages their brand on kids shoe sales - and who texts more than kids - this potentially is big. That said there was nothing on their website about this or how to find out - nothing at all. Maybe it is conceptual.
Now, the thing that made me go "hmmmm" was when John said that over 600,000,000 customers cross their threshold every year! A ton of people right? Then he casually mentioned that they use email marketing to reach their house file of 5,000,000 names. What? They have emails on only 1% of all the people that walk through their doors in just one year? That's criminal!
But - all too common in brick and mortar retail. Missing such a big opportunity is just wrong.

Retail Runway @ ICSC

2009-05-17T09:48:00.000-07:00

Retail Runway @ ICSC
Spent an interesting couple of hours today at Retail Runway here at ICSC. Eight retailers (Auto Zone, Pinkberry, Dollar General, Dunkin Brands, Wal-Mart, Collective Brands, Panera, Darden Group) presented their "for consumption" strategies and plans to grow their store counts and businesses. For the most part - this was not what was interesting.
What was interesting was listening to what they - in general - didn't say. They didn't say they were concentrating on growth outside the US because they are overstored here. They didn't say that they were growing stores and cutting staff to reduce costs and improve margin.
Another very interesting dynamic was how Dana Telsey, retail analyst, was much more impressive than her co-host Jeff Newman(Esq). Especially in the last 5 minutes when Dana showed an impressive command of data points off the top of her head when Jeff freelanced questions.
Kate Anketill, GDR Creative Intelligence Ltd, presented a number of cutting edge retail concepts that included social websites such as YouTube and MySpace whom she suggested were seriously considering what she termed 3D stores to monitize their concepts. Free sites have a revenue problem it seems.
All things considered, you'd be smart to pay attention to Dana and Kate.

If It's ICSC Next Week - Will Anyone Hear?

2009-05-13T09:49:00.000-07:00

If It's ICSC Next Week - Will Anyone Hear?
Yeah - it's a play off the tired old axiom but it's still appropriate. Next week is the big shopping center and commercial real estate conference in Las Vegas. Normally a huge deal for the developers who reel in national and regional retailers for new centers, new space, new stores. This year it's likely to be WAY down in attendance and even farther behind in deals. We've spent some time recently working with brokers and developers trying to find retailers for new projects, existing space, you name it. There is little happening.
Today's LA Times.com has a storyabout banks teetering on the edge due to commercial loans. The numbers are staggering. If we really are hitting bottom and starting back up this part of the business climate has to gain strength. If developers and by default banks start to fail because of commercial loans then we have hit only a plateau - and the bottom is still somewhere lower.
There are retailers out there expanding and several are looking to buy their dirt rather than lease it. Companies like In-N-Out have cash and strong sales and are now looking at markets that previously there were no vacancies. There are plenty now.

So - Who's Doing Well?

2009-05-07T10:01:00.000-07:00

So - Who's Doing Well?
Retailers that sell stuff to repair, replace and rebuild are seeing strong business in this new economy. Take a look inside the numbers even at Home Depot and you'd see these categories doing well. How about repair services? Yep - they are blowing LY numbers out. I think you will see companies like Sears, Best Buy and others step up their marketing and sales efforts in these areas. Look for how and who they partner with to have big returns. And let's not forget - these are service categories with high margins in many cases.

The Merry-Go-Round - From a Sandwich's Perspective

2008-06-23T10:02:00.000-07:00

The Merry-Go-Round - From a Sandwich's Perspective
Okay, did anyone else catch this:
Jim Adamson, former Gap, B. Dalton, Rite Aid and Burger King exec was the guy who deserves the credit for making the tough decisions that saved K-Mart's bacon - no doubt about it. After coming out of bankruptcy K-Mart combined with Sears, the new team took over and Jim picked up his check with many zeros and left - the deal was done.
Okay, page 2: Aylwin Lewis was (as in past tense) the Sears Holdings boss who didn't make it happen with the Sears-KMart-Sears thing. Being a wise man, he took the first exit and now, after a few months or unplanned R&R, he's been named CEO of Potbelly Sandwich Works.
So, our questions of the day is... white or wheat, mayo or mustard?
And that's that.