Crocs restructures following disappointing Q2
Footwear maker Crocs is undergoing a major restructuring that includes closing stores and job cutbacks.
The plan comes on the heels of the company’s disappointing second-quarter earnings results. Earlier this month, Crocs reported that second-quarter profit fell 44% to $19.7 million.
"We have identified the key strategic and structural improvements that we expect will allow the company to achieve its potential," Andrew Rees, Crocs’ president, said in a statement. "We have a clear, well-defined strategy for addressing these issues and improving performance. Work is underway already to drive significant change throughout our company in four key areas."
Crocs said it plans to streamline its global product and marketing portfolio, reduce direct investment in smaller geographic markets, create a more efficient organizational structure and close or convert (to third-party operators) 75 to 100 Crocs-branded retail stores. Crocs has 624 stores worldwide.
NRF bets on back half sales acceleration
The National Retail Federation has joined the growing chorus of voices expecting a surge in consumer spending during the next five months to compensate for a weak start to the year.
That weak start prompted a major downward revision in NRF’s full year sales forecast on Wednesday as the trade group said it now expects sales to increase 3.6% versus an earlier forecast of 4.1% shared back in January. The change was necessitated by weaker than expected growth of 2.9% during the first half of the year due primarily to extreme weather conditions which caused extensive store closings by many retailers.
Whether retail sales achieve NRF’s new target hinges on an assumption that sales will accelerate during the coming months. NRF contends retail sales will grow at 3.9% during the back half of the year.
“No retailer was immune to the doldrums witnessed during the first quarter, and as a result, the year’s growth trajectory was impacted,” said NRF president and CEO Matthew Shay. “That said, there is plenty of evidence that the second half of the year will be better for the industry as consumers begin to feel more optimistic about their spending decisions. And though we maintain realistic expectations of retail sales growth in 2014, we are optimistic that the chances for a stronger economy still exist.”
NRF’s chief economist, Jack Kleinhenz suggested that severe weather and other factors that took a toll on retailers are behind the industry and the overall outlook has become favorable.
“A second look at our forecast shifted our expectations slightly, but it’s important to note that the outlook is positive. Sales are growing and we expect them to continue at a moderate pace,” Kleinhenz said.
Positives Kleinhenz cited for the industry going forward include the fact that employment has grown at its strongest pace since 2005, business and consumer confidence have edged higher, manufacturing activity has expanded and inflation pressures remain tame. Improvements in those areas contributed to NRF’s favorable expectations in the coming months.
Office Depot offers augmented reality promotion
Boca Raton, Fla. — Office Depot Inc. is partnering with pop-rock quintet R5 on the retailer’s back-to-school “Gotta Get INSPIR5D” campaign. Through Sept. 30, at most Office Depot and OfficeMax store locations, customers can engage with an augmented reality experience with the band.
By using a smartphone and the Office Depot mobile app, shoppers can see R5 appear on the phone’s screen to offer words of encouragement and then pose for a photo opportunity with them. Customers can then share their R5 group photo via their social network.
In addition, back-to-school shoppers who make an in store purchase of $75 or more, can receive a limited edition R5 “Gotta Get INSPIR5D” sticker sheet. The stickers contain exclusive R5 band member interviews, an exclusive R5 live performance, and a code for four free R5 songs to download.
The campaign’s website will also host exclusive photo and video content. Visitors can also participate in the “Gotta Get INSPIR5D” campaign via social media using the hashtag #INSPIR5D.