Earlier this year, luxury retailer Saks Fifth Avenue announced plans to spin off its ecommerce business at a $2 billion valuation, backed by a $500 million minority investment from Insight Partners. Now, activist investor Jana Partners wants Macy's to follow a similar path. It claims that such a move could unlock billions of dollars of shareholder value. There are just two problems. First, the Saks ecommerce spinoff looks like a dubious move at best. Second, even if Saks manages to separate its physical and digital businesses without falling …
Don’t Sell the Return of Malls Short
Of the roughly 1,000 malls in the U.S., more than a third are rated C or D, which are grades that indicate low sales productivity, high vacancy rates, poor tenant quality, and other weaknesses. Once the retail apocalypse gained steam around 2015, it quickly became clear that most of these properties wouldn’t be viable as malls by 2030. The Covid-19 pandemic dealt malls another blow last year. Public health orders forced most U.S. malls to close for months and ratcheted up the financial pressure on many of their tenants. Moreover, during 2020 …
A Retail Health Check
"There are three kinds of lies," Mark Twain famously wrote over a century ago. "Lies, damned lies, and statistics." The conventional media reporting on the U.S. Census Bureau's monthly retail sales reports epitomizes how misused statistics can become no better than lies. The recently released July retail sales report is a prime example. Fake News After the report came out on August 16, media outlets ran with blaring headlines. To give just a few examples, CNBC talked about a "worse-than-expected" drop of 1.1 percent, while CNN called the …
Why Omnichannel Is So Hard
Over the past decade, "omnichannel" has become one of the most common buzzwords in retail. Retail executives, industry consultants, and analysts all agree on the importance of integrating the brick-and-mortar and online channels so that customers can move seamlessly between them. Yet while there's consensus about what retailers should do, adapting to this new way of doing business isn't simple. Of course, some prominent retailers like Target have made omnichannel look easy. Target got a late start, having made a boneheaded move to outsource …
Luxury Brands Try On Blockchain
Blockchain has taken the financial world by storm over the past decade. The growing popularity of bitcoin and the proliferation of other cryptocurrencies has been the most visible piece of this transformation. Blockchain technology has many potential uses beyond cryptocurrency, though. Earlier this year, three of the most prominent names in luxury goods (LVMH, Prada Group, and Richemont's Cartier brand) announced a partnership to use blockchain to give customers a secure way to learn more about the items they are buying. Most …
Macy’s Off-Price Gambit Is the Only Way Forward
In recent weeks, Macy's has resumed expanding its Backstage off-price chain, following a pause while the department store giant fought through the worst of the Covid-19 pandemic last year. Since the beginning of April, the company has opened 26 new Backstage stores within full-line Macy's locations. That brings the Backstage store count to an even 250. Another eight new locations are set to open on May 15, putting Macy's close to its target of opening 45 new Backstage stores within Macy's full-line stores in 2021. The retailer also plans to …
Costco Doesn’t Need Curbside Pickup
Over the past decade, omnichannel has become one of the most common buzzwords in retail. Retailers of every size and shape have implemented strategies to make their brick-and-mortar and e-commerce operations work together. Common omnichannel fulfillment capabilities include buy online, pickup in store (BOPIS); buy online, ship to store (similar to BOPIS, but the items are shipped to a store for pickup rather than being in the store's inventory at the time of purchase); and buy online, ship from store. The Covid-19 pandemic has driven …
A Smaller Nordstrom Footprint
Retail analysts and executives have long known that the U.S. is "overstored," with far more retail space per capita than other countries. More specifically, one could say the U.S. is "overmalled," with roughly 1,200 malls (depending on exactly how you count). So-called "A" malls have generally remained quite healthy, with high occupancy rates and strong sales per square-foot. Despite representing only about a quarter of the U.S. mall universe, those properties hold around 80 percent of the total value of all U.S. malls. Of the remaining 75 …