DESIGN/CONSTRUCTION

Chicago to be home to world’s first…

BY Marianne Wilson

Nutella is setting up shop on Michigan Avenue.

Ferrero, the makers of the popular hazelnut spread, will open their first owned and operated restaurant, Nutella Café, on May 31. The two-level café is located one block from Millennium Park.

"We wanted to create a world of Nutella for our fans that could truly capture the essence of the brand – not just in the dishes that will be served, but in the full experience from the moment you step into the space." said Noah Szporn, head of marketing Nutella North America. "The Nutella Cafe offers something for everybody, and we encourage everyone to come in and try a dish or snack.”

Many folks prefer to eat Nutella straight out of the jar. But the menu at the new café incorporates the spread into a variety of different dishes, both savory and sweet. There are also a number of dishes available without the hazelnut spread.

As for the design of the restaurant, the Chicago Tribunedescribed it as like “walking into a jar of Nutella itself. The warm, creamy white color of the walls is complemented by the dripping Nutella-colored embellishments on the ceiling, accented by hanging lights in the shape of flowers of the hazelnut plant.”

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MARKETING/SOCIAL MEDIA

Graduation spending to hit record high

BY Marianne Wilson

Some good news for retailers: Consumers plan to spend more than ever on graduation gifts this year as they stuff greeting cards with gift cards and cash.

That’s according to the annual survey by the National Retail Federation and Prosper Insights & Analytics. With more consumers buying for graduates this year – 36% compared with 34% in 2016 – total spending is expected to reach $5.6 billion. That’s the highest number in the survey’s 11-year history, topping last year’s previous record of $5.4 billion.

Cash will once again be the most popular gift, given by 53% of those surveyed as they seek to help students with the costly transition from high school to college or college to the “real world.” However, cash gifting is at a survey low in 2017, dropping about 10% from highs recorded in 2007 and 2009. Greeting cards follow at 41%, gift cards at 33%, apparel at 16% and electronics at 11%.

“This graduation season we are seeing more young millennials giving gifts to their peers,” Prosper principal analyst Pam Goodfellow said, noting that 48% plan to do so, up from 42% last year. “While greeting cards are most likely to be exchanged among 18-24-year-old, gift cards, cash, and apparel are other popular options. In fact, this group is nearly twice as likely to gift clothing than the overall average.”

While ages 18-24 are the most likely to give a gift to graduates (at 48%), they maintain the smallest budgets at $78.42. The biggest spending is likely to come among parent-age 45-54-year-olds at $119.84 as well as those in the grandparent bracket of 65+, who plan to spend an average $112.34.

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FINANCE

Teen retailer posts mixed Q1 results

BY Marianne Wilson

American Eagle Outfitters’ profit shrunk in the first quarter amid charges and discounting.

Net income totaled $25.2 million, or 14 cents per share, compared to $40.4 million, or 22 cents per share, in the year-ago period. The retailer reported charges of $5.4 million related to severance and related charges due to corporate restructuring and its previously announced initiative to explore the closure or conversion of company owned and operated stores in Hong Kong, China, and the United Kingdom to licensed partnerships. American Eagle’s adjusted EPS was $0.16, which narrowly missed estimates.

Total revenue in the quarter, ended April 29, edged up 2% to a better-than-expected $762 million. Same-store sales rose 2% amid strong demand for its Aerie brand.

"The first quarter results reflected mall traffic headwinds, especially early in the quarter, with improved trends over Easter and a strong digital business throughout,” said CEO Jay Schottenstein. “As we look ahead, we are taking the right steps to improve our results and adjust our business for today’s rapidly evolving retail environment. We are creating efficiencies across our organization, as we aim to continue capitalizing on the strength of our brands, product leadership and other competitive advantages. The six million shares repurchased this quarter reflects the company’s strong cash flow, healthy balance sheet and confidence in our brands and long-term strategic initiatives."

In fiscal 2017, American Eagle plans to open 35 American Eagle Outfitters and Aerie stores throughout the U.S., Canada and Mexico. It plans to close between 25 and 40 store locations.

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