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Burying Borders: An historic funeral home site re-tenants after the book store’s death

BY Katherine Boccaccio

In the December 2007 issue of Chain Store Age, I wrote about an historic structure on St. Charles Avenue in New Orleans, long-occupied by House of Bultman Funeral Home that was undergoing an extensive redevelopment to accommodate the first Borders bookstore in Orleans Parish.

The Stirling Properties’ owned building was retooled to the tune of $9 million, which involved teaming with the Preservation Resource Center and the Historic Districts and Landmark Commission in order to properly redevelop within historic guidelines, and the 24,000-sq.-ft. Borders opened in November 2008.

Fast forward three years. Borders is bankrupt, and Stirling – like so many of its real estate firm counterparts – was faced with filling the vacancy. It has done so in Stirling style – with another market debut.

This month, Stirling announced that The Fresh Market would open its fourth Louisiana store – a first in New Orleans – in the two-story former funeral-home-turned-Borders.

The store, according to Stirling, will utilize the location’s two stories to provide customers with a distinctive shopping experience, including a bakery, a full-service meat counter, ready-to-serve entrée items, fresh delivered seafood, more than 200 imported and domestic cheeses, a large wine and spirits selection, as well as an expansive produce department with more than 400 items and a large organic selection.

“St. Charles is the perfect location for The Fresh Market,” said Lewis Stirling, executive VP and partner for Stirling Properties, based in nearby Covington, La. “The area’s demographics support this type of retailer and given the current economic climate where retail spaces tend to sit vacant longer, it’s a testament to our team’s ability and the strength of the region that this location was able to get back into commerce so quickly.”

I concur. Because I live in Baton Rouge – just an hour from New Orleans – I can attest to the strength of the region, and to the proclivities of a south Louisiana customer base that will flock to Fresh Market. Good move, Stirling.

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Target puts final Canadian plans in motion

BY CSA STAFF

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 hadagreed 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.

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Off Target? Supply Chain Lessons From The Missoni Mayhem

BY CSA STAFF

By Josh Green, CEO, Panjiva

When Target revealed that Italian luxury knitwear designer Missoni would create an exclusive, affordable and limited line for the retailer, the public swooned. And when it launched early last week, they acted — selling out stores, crashing Target’s website and creating a Black Friday-like frenzy. Consumers got their hands on designer fashions for a fraction of the cost, Missoni’s luxury brand name became accessible to many household budgets, and Target benefited from immediate sales and tremendous buzz: it was a major win for everyone. Or was it?

Since the mayhem has died down a bit, a lot of questions have been raised about the success of the line and Target’s preparedness for such overwhelming demand. Finding an item from the 400-piece line became nearly impossible, spurring a secondary market on eBay that fetched tremendous markups. Although the line was expected to be available through Oct. 21, there are significant doubts on when — and if — Missoni products will be re-stocked.

According to a shipment analysis we conducted in our import tracker Panjiva Trends, there were 14 shipments of Missoni goods into the United States in August — the time during which shipments would arrive to be on store shelves for the Sept. 13 launch. However, as of the 15th of September, only one shipment of Missoni goods has arrived this month. Although we can’t predict the future, this points to a major problem for Missoni-hungry consumers: there will be very limited products available between now and the end of the limited-time promotion. And even if Target decides to extend it — though they’ve said they will not — the lag time between shipments arriving to the United States and hitting store shelves means consumers still have a lot of waiting to do.

Regardless of where your opinion falls on how Target managed the situation, there is a lot that other retailers can learn from the Missoni mayhem when it comes to managing supply chains.

Align Ordering and Promotion:
Target put considerable marketing effort behind the launch of its Missoni line — from events during New York’s Fashion Week, to a 20-page insert in the September issue of Vogue and 1960s-inspired television spots. Clearly, Target wanted to build buzz and establish demand for the products.

But based on the shipments coming into the United States, orders placed with overseas suppliers did not take this into account. In many respects, it is a game of proportions: product lines with little-to-no promotion will likely require ordering in line with average demand, but ordering should incrementally grow to support increased demand due to efforts put behind promotion.

In fairness to the retailer, the short-ordering may have been done on purpose to create immediate demand and maintain some of Missoni’s brand exclusivity. Target would not be the notable name it is today without understanding more about consumer demand than this flub points to — in other words, they probably knew what they were doing and selling out so quickly was part of the retailer’s strategy. But with countless customers now frustrated at its lack of availability, this strategy remains questionable.

Stagger shipments:
Target’s initial plans were to offer the Missoni-for-Target line until late October. So why, then, has there only been one shipment in the month of September? To keep consumers interested — and regularly returning to both online and brick-and-mortar stores — Target should have staggered its delivery dates throughout the duration of the offering. By selling out on the first day and with no more Missoni goods arriving, consumers have no incentive to visit Target stores or its website — impacting potential incremental sales the line surely would have driven.

Work with proven suppliers: Target’s supply chain and sourcing function — like that of other top retailers — is one of the most robust and sophisticated in the world. But for smaller chains with less buying power, a launch akin to Missoni-for-Target could only be executed with the best supplier partners. These partners need to be able to deliver products to your exact specifications, quickly ramp-up operations to meet un-expected demand, and be able to juggle your needs against those of other clients — which is especially hard if the supplier works with bigger customers.

The challenge, then, is knowing who the best are for your business. Tools now exist that help figure that out, and retailers should use them to answer questions like:

  • Has this supplier worked with other U.S. companies, and who?
  • Do they have experience in my industry or with similar products?
  • Is the company financially stable or is their risk of them going out of business?
  • Does the supplier engage in behavior that would go against my company’s CSR or sustainability initiatives?

Armed with this information, retailers are generally able to separate valid potential partners from those that would be a waste of time — or a potential risk — to work with.

Factor in Time Lags: What if Target had decided to extend the program or re-order due to high demand? The answer is that a lot of people would be left waiting — and perhaps interest may have waned — because it can take months from the time a product order is placed to when it is available to consumers. This is an important point for other retailers to consider: when a product flies off of shelves, what is the contingency plan for getting it back in stock quickly?

Relationships and a deep understanding of your supplier network is key. Retailers need to know how long it will take suppliers to produce items and factor in the delivery, distribution and restocking logistics timing into their order equation.

Because of problems with time lag, we’re seeing a lot more U.S. companies try to source from suppliers in the Western hemisphere to cut down transit time. From there, the best rule of thumb is to allow at least one month to get the product from the port to the retail environment, with slight variations depending on the time of year, your distribution partners, and other uncontrollable factors.

At the end of the day, the Missoni mishap isn’t about what Target did right or wrong, but what other retailers will learn from the scenario. Hopefully, a lot.

Josh Green is CEO of Panjiva, a leading intelligence platform for global trade professionals.

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