OPERATIONS

Bloomingdale’s CEO Michael Gould retiring; to be replaced by Tony Spring

BY Marianne Wilson

New York — Bloomingdale’s longtime chief executive and chairman, Michael Gould, 70, is stepping down after 22 years on the job. He will be succeeded by Tony Spring, 48, currently Bloomingdale’s president and COO, effective Feb. 1, 2014. A successor to Spring as president of Bloomingdale’s is expected to be named in 2014.

“Mike Gould has been an outstanding and inspirational leader who has strengthened Bloomingdale’s position as an upscale fashion trendsetter known and loved by customers around the globe. Bloomingdale’s truly is like no other store in the world,” said Terry J. Lundgren, chairman, president and CEO of Macy’s, parent company of Bloomingdale’s. “Tony Spring also has been an integral part of Bloomingdale’s formula of success for 26 years, and we are excited about his new, elevated role leading this exceptional omni-channel brand going forward.”

Gould, who joined Bloomingdale’s as chairman and CEO in 1991, told The Associated Press that he felt it was time to pass the baton and that he had been thinking about leaving for the past seven months. He started succession planning 10 years ago with his eye on Spring, the report said.

Prior to joining Bloomingdale’s, Gould was president and CEO of Giorgio Beverly Hills, a position he had held since 1987. He joined Giorgio in 1986 as president and chief operating officer.

Gould began his retailing career at the Brooklyn-based Abraham & Straus division of Federated Department Stores, Inc. in 1968 as an executive trainee and rose to become a merchandise VP.

Spring was promoted to Bloomingdale’s president and COO in 2008, with responsibility for Bloomingdale’s stores, marketing, creative services, finance, operations and restaurants. He began his Bloomingdale’s career in 1987 as an executive trainee in the White Plains, N.Y., store. From there, he went to assume positions of increasing responsibility.

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L’Oréal takes a bit of beauty to NYC subway system

BY CSA STAFF

Riding the subway just got beautiful thanks to L’Oréal Paris as the beauty brand will launch the first-ever intelligent vending experience in the New York City subway system Monday, Nov. 4.

Stationed within the Bryant Park subway station through Dec. 30, the L’Oréal Paris Intelligent Color Experience works as a three-step process. It first detects the colors in a woman’s outfit and picks out the most prominent and related color palettes, then recommends L’Oréal Paris products to match and lastly allows women to quickly and easily purchase those products on the spot.

“We are proud to continue L’Oréal Paris’ digital leadership by being the first brand to bring women a highly customized and convenient way to shop beauty in a place they would least expect it — the New York City subway,” stated Marc Speichert, chief marketing officer of L’Oréal USA. “It marks the latest ‘stop’ in our unparalleled quest to combine the latest in technology with the highest in quality to help every woman embrace her unique beauty.”

Developed by digital agency R/GA, the L’Oréal Paris Intelligent Color Experience is part of a partnership with R/GA and CBS Outdoor. L’Oréal Paris was chosen as the inaugural brand to participate in the two-month program.

“The MTA is very pleased to see a brand, like L’Oréal Paris, out in front of the emerging virtual shopping trends that promises to blur the lines between traditional outdoor advertising, traditional bricks-and-mortar retail and e-tailing,” stated Jeffrey Rosen, MTA director of real estate. “The MTA and our advertising contractor, CBS Outdoor, will be watching this program closely to see if it can be replicated and scaled up within the MTA network. As the advertising industry continues to test and demonstrate new ways to reach consumers in high-traffic environments, we’re happy to facilitate such experimentation within our system.”

How it works: When a woman approaches the L’Oréal Paris Intelligent Color Experience, she sees her reflection in a full-length, well-lit mirror. She then is immersed in a world of color. Digital animations that represent her silhouette and the colors she is wearing appear alongside her reflection and suggest expertly coordinated eye, lip and nail shade recommendations that “match” or “clash” her outfit. Women can experiment with a variety of personalized looks from the L’Oréal Paris’ Colour Riche franchise. From the time the mirror scans a woman’s look to when the products are in her purse, the entire experience takes less than two minutes.

“R/GA’s deep understanding of customer behavior, technology and innovation uniquely enabled us to design the right experience for L’Oréal Paris in the Bryant Park Station,” added Erin Lynch, R/GA group executive creative director. “It’s an unexpectedly immersive, playful experience designed to make her day more beautiful. “

Women in New York City — and even those who are not — can participate in this first-of-its-kind program. There are several ways to take part including:

Stopping by the Bryant Park Station to discover the perfect palette and shop for a bold look;
Using #BringYourBold to share the experience and beauty look created from the purchased products;
Visiting LorealParisUSA.com/BringYourBold to see top bloggers’ recommendations on how to wear the featured products. Women can then explore and purchase the products for themselves; and
Connecting with the brand on Instagram, Facebook and Twitter for exclusive beauty tips and trends.

The L’Oréal Paris Intelligent Color Experience is open Nov. 4 through Dec. 30, helping women look and feel beautiful while on the go throughout the holiday season. Eye, nail and lip products from L’Oréal Paris’ Colour Riche franchise all will be available for purchase along with the brand’s newest mascara innovation, Voluminous Butterfly. Women will have the option to purchase just one or the multiple products recommended to them. Prices will be in line with other New York City retailers.

The L’Oréal Paris Intelligent Color Experience is located in the MTA Bryant Park subway station and can be accessed from the entrance on the southwest corner of Fifth Avenue and 42nd Street. It will be open weekdays from 7 a.m. to 9 p.m. and on weekends from 10 a.m. to 8 p.m., with limited hours on Thanksgiving and Christmas Eve and closed on Christmas Day.

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Capitol Hill’s Ripple Effect on Retailers

BY CSA STAFF

By James McCandless and Kenneth Katz, X Team International

The recent government shutdown has analysts scrambling to determine how much damage was done to the national economy. From a retail perspective, understanding the scale and scope of the shutdown requires a more thorough understanding of the issues at play; including a closer look at how retailers responded and a breakdown of how the lingering effects of the partial government closure may impact the holiday sales season.

The ripple effect on retail
In the midst of the government shutdown, many retailers responded with tangible discounts and promotions targeting furloughed employees. In Washington, D.C., many retailers offered anyone with a government ID a discount of up to 20% for their services or products. Boston Market gave one free whole chicken with the purchase of a family meal by a government employee, and online game retailer GOG offered discounted game packages. Starbucks took a different approach by unveiling a promotion aimed at sending a political message about getting along, offering free coffee to guests who bought someone else a drink. To what extent those incentives boosted business remains to be seen, but the fact that they were put into place at all speaks to the ripple affect of today’s politics and how just one small political pebble will greatly impact employment, consumer spending and retail profits.

It is obvious to retailers that all of the events on Capitol Hill — not just the shutdown — have impacted consumer confidence and have exerted some downward pressure on retail sales. The first real hiccup in what had previously been a slow but relatively steady recovery was the sequester and the associated furloughs that started earlier in the year. As a result, many prominent national retailers saw weak or weaker-than-expected second quarter earnings and were already projecting more anemic fall sales figures before the shutdown.

Despite the sequester, generally uninspiring summer sales figures and a relatively disappointing back-to-school season, pre-shutdown holiday sales projections were still relatively optimistic. The National Retail Foundation projected holiday sales would increase 3.9%, the International Council of Shopping Centers (ICSC) forecast a 3.4% increase, ShopperTrak predicted a 2.4% bump, and Deloitte suggested a 4% to 4.5% spike. In the wake of the shutdown, however, more recent polling indicates that as much as 40% of consumers have scaled back spending.

Looking at this topic from a national perspective, however, can paint an incomplete picture. It is important to consider that not everyone will be affected equally. Some retailers will be more susceptible to the effects of the shutdown, while it is likely that others will barely notice a difference. For example, high-end retailers may be affected less in comparison with discount retailers — according to a recent study by ORC International for ICSC and Goldman Sachs, the shutdown has impacted lower-income households more than high-end consumers and left low earners more likely to be trimming spending.

While the shutdown was a national story, the trickle-down impact on retail differs significantly from one market to the next. Washington, D.C. and other regions with a disproportionately high percentage of government workers are obviously more vulnerable to its negative effects. In areas such as Houston, where the pre-shutdown economic indicators were among the best in the nation, and there are a relatively low percentage of federal employees, the retail impact is likely to be less of an issue.

Consumer concerns
In the immediate aftermath of the shutdown, sales slowed nationally by 0.7% for the week ending Oct. 12 (according to ICSC and Goldman Sachs Weekly Chain Store Sales Index). While that kind of near-term “hangover” is not reason for true alarm, there are some indicators that consumer confidence — and, subsequently, consumer spending — might have taken a significant blow that will last through the holiday season. Additionally, the “resolution” that ended the shutdown only set the stage for another political confrontation in early 2014. Depending on how much attention that story gets could have a significant impact on sales through the end of the year as well.

Leading up to the holiday season, an interesting thought for retailers is that the typical question of how spending dollars will influence the landscape may not be as relevant as how discretionary dollars will be spent. If more people tighten their figurative purse strings by forgoing restaurant trips and eating more home-cooked meals to save money, grocers could actually see a sales bump, while restaurants may need to get especially creative to fill their tables.

Retailers who heavily depend on fall seasonal sales will also be affected by tighter discretionary spending as a result of the shutdown. For instance, retailers in areas like Vermont that rely on visitors for the fall foliage scenery and sell items that by nature are “moment in time” sales, or those who sell seasonal fall items like Halloween decorations, have likely missed their chance to see any significant profits this year. And unlike the delayed purchase of a new coat or boots, the profits on these types of seasonal sales can not be recouped.

Another important issue facing holiday sales is retroactive pay for government employees. The announcement that all 400,000 or so government employees that were furloughed will receive back pay was welcome news to families and retailers alike, but it remains uncertain when they will receive that pay. The majority of these employees expect to be caught up on pay by the end of October, which could result in a much needed spending/sales boost for retailers as a result of these employees receiving large paychecks that feel more like a “bonus.”

An uncertain future
The reality is that since 2008-2009, consumers have been much more conscious of their spending. And so, while the near term worries about the holiday season are obviously important, many retailers are focused more on the macro-level uncertainty that persists. The shutdown was ultimately just one more fork in the shaky economic road.

What will happen next for retailers is highly questionable considering the unpredictability of the government and, as a result, the increasingly weary and conservative consumer. The shutdown may have lasted 16 days, but no matter what happens this holiday season, we will be following the medium- and long-term retail impacts for much longer.

Kenneth S. Katz, Principal at Houston-based Baker Katz and James McCandless, director of retail at Bethesda-based Streetsense, are part of X Team International, an international alliance of retail real estate advisors with expertise in more than 45 major markets throughout the U.S., Canada, and Europe.


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