American Apparel receives default notice
New York — The American Apparel saga continues, with the beleaguered chain receiving a notice of default from its longtime lender, Lion Capital.
The default notice was based on the claim that founder Dov Charney ceased to be CEO of the company, according to a regulatory filing with the Securities and Exchange Commission today. (Lion had a stipulation in its loan agreement, which was signed last year, stating that if Charney left the company, it would be in default.)
The agreement with Lion, dated, May 22, 2013, allows for the acceleration of the maturity of the loans and other outstanding obligations under the credit agreement. Lion initially loaned American Apparel $10 million.
In its SEC filing, the retailer disputed Lion’s claim regarding Charney’s position and said it is contesting the validity of the acceleration. American Apparel also reserved it rights against Lion for a claim of damages for asserting an invalid acceleration.
In other developments, investment firm Standard General LP has reportedly taken control of the 43% ownership stake in American Apparel previously held by Charney., according to Reuters Although Charney previously said that he had signed a deal with Standard General whereby the firm would buy at least 10% of the company’s stock and then loan Charney the funds to acquire the stake, Standard General said this arrangement is not an endorsement of Charney.
While Charney retains the right to vote for a seat for himself on the American Apparel board of directors using his shares, Standard General said he has agreed not to do so. An SEC filing indicates Charney will give up his board seat until an investigation of the alleged improprieties that led to his dismissal is complete.
Target continues to bolster digital with three new hires
Target has added three new external senior-level hires, who will have responsibility for leading teams across information technology, e-commerce and digital products.
Jim Fisher joins the company as SVP infrastructure and operations, Target technology services, where he will oversee technical infrastructure and operations. His 35-year career has included roles at the Home Depot, Macy’s and IBM. Immediately before Target, Fisher was SVP global infrastructure operations at First Data Corp. He was responsible for security engineering and operations, database and data administration, asset management and IT facilities.
Alan Wizemann joins the compay as VP Target.com and mobile product, where he will oversee digital product teams. For the past two years, Wizemann had been consulting with Target and leading various product teams, including mobile coupon app Cartwheel. Prior to Target, Wizemann founded ShopIgniter, a social commerce and marketing platform, and also worked with several other startups.
David Weissman joins the company as president of DermStore, based in El Segundo, California, which Target acquired last year. Weissman was previously at BCBG Max Azria Group, where he was EVP e-commerce and omnichannel. He also held several senior-level positions during his 10-year tenure at GSI Commerce.
“At Target, we’ve said one of our top priorities is accelerating our digital transformation, and these new hires are a signal of our commitment to that effort,” said Jodee Kozlak, chief human resources officer. “Jim, David and Alan are proven leaders who we believe will help Target deliver great new experiences for our guests, whether in stores, online or on the go.”
The company has already brought on board a number of senior-level executives, including Brad Maiorino, SVP and chief information security officer; Peter Glusker, SVP new business integration and operations; and Kristi Argyilan, SVP media and guest engagement.
The next revolution in online retailing
What if you could replicate the physical in-store experience on the web? The concept sounds incredibly powerful. Retailers could connect product experts with key audiences to demonstrate and sell physical products, just like in-store. The ubiquitous “Can I help you?” chat windows are a pale reflection, at best, of a truly interactive customer experience. It’s impossible to convey the intricate details that make a brand and its products unique in a text-only window.
What are the core components of the in-store brand experience? Certainly live interaction with knowledgeable staff is key. Social interaction plays into it too: There is energy and insight people draw from each other. Finally there’s a visual element: Customers can actually see a product in action.
Surprisingly, creating just such a live interactive product experience via the web is starting to happen. Some retailers and brands are building their own microsites for this; others are tapping vendors that offer these features as part of a branded platform. Pottery Barn, for example, recently used the latter approach to host its first summer cocktail event using a real-time video+social platform called Brandlive. Hundreds of participating consumers had a chance to learn about and purchase products as well as submit questions answered on the spot by product experts. The retailer is already planning more events.
Other retailers and brands are using these live web-based events to sell products ranging from high-end boats and outdoor cameras to slow cookers and canning jars. But they’re not just selling the product, they’re selling the experience — the chance to examine products, interact with product experts, and even socialize with like-minded folks in real-time. And the more that experience is a reflection of the brand’s spirit, the stronger the customer connection.
The secret to that connection is live, interactive video with social integration built-in. These events are a natural evolution of Omni-Channel retailing, and it’s time to prepare for this next wave of real-time authentic engagement.
When online shopping began, it was basically an evolution of the paper catalog. Consumers were trained to expect product images and short descriptions, and now the web gave them even more information and selection. Awesome! Yet that was more than a decade ago. And while online retail technology has improved, the consumer experience hasn’t changed drastically in that time.
It shouldn’t be a surprise that the next revolution in online retail involves the next generation of online video. The numbers tell the story. According to comScore, in December 2013 188.2 million Americans watched 52.4 billion online content videos. A recent study from video marketing firm Invodo found that about 90% of consumers watch online videos, and online shoppers are nearly twice as likely to make a purchase than consumers who do not view video.
But simple video, like a YouTube clip, isn’t enough to sell an experience. Experience shoppers are very particular about what matters to them. They want an interactive experience, and retailers need to scale their best product experts to demonstrate how products meet customer’s needs.
What retailers need are product demonstrations for the digital generation. It’s likely that your online customers are already interacting via video; applications like Skype, FaceTime, Snapchat and Google Hangouts have become popular methods for online communication. These interactive video+social microsites, on the other hand, extend that experience considerably, giving customer’s quality content and live access to the experts who know the products inside and out. And the results matter: companies are getting two to three times traditional ecommerce conversion rates, quickly capturing the attention of industry leaders such as eBay, which is also experimenting with the approach.
Recently, retailer Recreational Equipment, Inc. (REI) joined forces with adventure camera company GoPro to pre-launch an anniversary sale camera bundle. During this event, consumers received VIP treatment and special pricing. All it took was a branded webpage, affordable video equipment and the product experts. Both companies promoted the events through social media and email marketing. Once completed, the archived video was available for future sales promotions.
While we will always have static catalog-like e-commerce pages, there is a growing swath of retailers, brands and consumers who seek something more: more interactive, more engaged, more authentic.
Fritz Brumder is CEO of Brandlive.