FINANCE

Cold weather and early Easter hamper March sales

BY Marianne Wilson

New York — L.Brands, parent of Victoria’s Secret, reported better-than-expected 3% sales in same-store sales for March. Zumiez Inc. and Buckle Inc. also both reported better-than-expected numbers.

But other retailers were hampered by a colder-than-normal March, which caused many shoppers to put off buying warmer-weather clothing, and an early Easter. At The TJX Companies, same-store sales fell 2% in March, a bigger drop than was expected.

“Due to the year-over-year timing of Easter, we had not planned March to be a strong month against last year’s high increase, and our comparable store sales were in line with our expected range,” said Carol Meyrowitz, CEO, TJX Companies, Inc. “This was despite the extraordinarily cold weather across most regions in the U.S., Canada and Europe. In regions of the U.S. where weather was not an issue, we saw comp sales increases. Further, overall business trends improved as the weather became warmer.”

Cato Corp. said its March same-store sales were down 11% hurt by the fact that Easter fell earlier on the calendar than last year. It said it expects a corresponding benefit when it reports April sales next month, and that looking at its two-month combined results will be the best way to measure its sales trend.

Stein Mart Inc. said its same-store sales fell 2.8% in March, falling short of Wall Street predictions. The company said sales were hurt by cold weather and an earlier Easter holiday.

"This year, more than ever, it will be important to combine March and April sales results to get a true picture of our spring selling season due to this year’s Easter calendar shift," said CEO Jay Stein.

Fred’s Inc. said its sales fell 3%, more than expected. The discounter cited cool weather and the timing shift in the Easter holiday.

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Dell, Microsoft partner to improve supply chain efficiency for OEM customers

BY CSA STAFF

ROUND ROCK, Texas — Dell OEM Solutions announced that it has worked with Microsoft Corp. to become a global distributor, outsource manufacturer and integrator for Windows Embedded products.

The agreement, which went into effect on April 1, enables Dell to provide Windows Embedded product licenses (COAs) with Dell product solutions. This means it is easier for Dell OEM Solutions customers to bring their products and solutions to market through:

  • Shorter lead times with in-stock COAs

  • Streamlined purchase order processes by eliminating the requirements for custom factory integration (CFI) and custom factory service (CFS)

  • Eliminated need for multiple in-region suppliers due to global implementation

“We’re very excited to be the only tier-one manufacturer able to bring our customers this level of integration with Windows Embedded products,” said Joyce Mullen, vice president and general manager, OEM Solutions, Dell. “With streamlined processes, fewer suppliers to manage and seamless globalization, we can help more customers drive innovation, speed time to revenue and deliver their intellectual property to end users taking advantage of Dell hardware, services, engineering and supply chain capabilities.”

“Simplifying IT for enterprises has been the primary goal of our work with Dell for more than 30 years,” said John Doyle, director of product management for Windows Embedded at Microsoft. “This licensing agreement with Dell exemplifies that shared goal, helping to streamline the supply chain experience to make it easier and quicker for OEM customers to bring their innovative intelligent systems solutions and devices to market.”

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The J.C. Penney Debacle: Five Lessons Learned

BY CSA STAFF

By Ellis Verdi, president of the NYC advertising agency DeVito/Verdi

Here are the five lessons I learned from the J.C. Penney debacle — unfortunately we knew all of this before Ron took his ideas to market.

1. Advertising doesn’t work quickly to change behavior. Even if educating consumers on fair pricing made sense, having people understand "fair pricing" could take many years, and I’m not sure consumers even care. Aside from the pure challenge of getting the word out through advertising and in-store, because of its inherent complexity, it still requires enormous levels of advertising and time.

2. Consumers need to remain in control of value. After all, we are asking them to part with their money. "Trust me this is a low price" doesn’t work well unless they have years of successful experience with that store’s pricing format. In fact this was a wholesale change and those consumers seeking a deal, did not know they were or were not getting one.

3. The money guys have a hard time with a strategy dependent on communications. Ron’s idea requires a belief that consumers will see the wisdom of the change if they learn about it through advertising. Too many times the financial types don’t have the tools to evaluate that and actually tend to believe it more than they should – witness the boom/bust of the .com era, when financial organizations put tons of money in advertising, often with little to no success. Inventory management, finance, sourcing, staffing etc are all more tangible, more-easily quantifiable.

4. Ron actually didn’t have the right experience for Penney’s. Not that a direct knowledge of this type of retailing is critical, but the vision he created can’t be justified in any way based on his past experience. Neither Apple nor Target fits the bill. Most understand why Apple is less than relevant (high priced product that has a strong following, with good built in margins because it is manufactured by Apple versus buying from others etc…) but Target is also a different breed. Target’s cool commercials have the luxury of not having to be accountable in the same way (they sell detergent and products we need — not just want), and its message is critical to Target only because they have to create a look and feel to differentiate from Walmart. This direction has nothing to do with a value/price message, nor does it have that hard-hitting quality that is needed to drive traffic. JC Penney advertising has more responsibility. Target creative work shows a unique look/feel; J.C. Penney needs a strong, substantive message as well as a look/feel.

5. Even the most innovative strategies have to reflect what we know about the customers. It was reported that many SKUs of best selling products were discontinued because of a vision to go slightly higher end or specialized. Essentially eliminating products that customers want, in order to bring the tore up a notch, is bound to cause a backlash. We have learned there is often not as much thought given to the collateral damage of simply "elevating a brand," as compared to successfully serving the masses.


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