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Dunkin’ Brands Q3 net income jumps 36%; continues expansion push

BY Dan Berthiaume

Canton, Mass. – Dunkin’ Brands Group, the parent company of Dunkin’ Donuts and Baskin Robbins, reported that its third quarter net income grew 36% to $40.2 million.

Revenue increased 8.5%, from $171.7 million, to $186.3 million.

Part of the reason Dunkin’ Brands enjoyed such as successful quarter was the addition of 22 net new restaurants worldwide by Dunkin’ Brands franchisees and licensees. This includes 81 net new Dunkin’ Donuts U.S. locations, 73 net new Baskin-Robbins International locations, 67 net new Dunkin’ Donuts International locations, and one net new Baskin-Robbins U.S. location. In addition, Dunkin’ Donuts U.S. franchisees remodeled 98 restaurants during the quarter.

Dunkin’ Brands also cited a systemwide sales increase of 5.8%, driven by same-store sales growth of 4.2% at U.S Dunkin’ Donuts stores and 3.2% at U.S, Baskin-Robbins stores, as helping to drive revenues, as well as increased franchise fees due to favorable development mix and incremental franchise renewals, and increased sales of ice cream products. Net income was boosted by operating income growth.

"With 222 net new openings year-to-date, we now have 7,500 Dunkin’ Donuts restaurants in the U.S and the demand by existing and prospective franchisees to grow with us has never been stronger said Nigel Travis, chairman and CEO, Dunkin’ Brands Group, Inc.

Travis said the company believes it can have 15,000 Dunkin’ Donuts restaurants in the U.S., including approximately an additional 3,000 east of the Mississippi and 5,000 in the western part of the country.

“Notably this quarter, we opened our first restaurants in Denver, Colorado, and sold additional store development agreements in Southern California bringing the total to 70 restaurants planned for the Southern California region,” he said. “Additionally, just last week we announced that we have begun to sell store development agreements for the central part of the state, including the Fresno, Bakersfield, Sacramento, and Santa Barbara areas."

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Millenials to outspend Baby Boomers by 2017

BY Marianne Wilson

New York — The Millennial generation is expected to outspend Baby Boomers by 2017, yet retailers underestimate the size and purchasing power of this consumer, according to a new study by Berglass + Associates and Women’s Wear Daily.

The study, “What Happens When Millennials Get the Wallet,” found that retailers do not fully understand the needs of Millennials and are employing business strategies and tactics that do not apply to this customer.

“Millennials have different motivations, attitudes and behaviors than previous generations, and retailers need to adjust their business strategies accordingly in order to thrive,” said Les Berglass, CEO of Berglass + Associates. “For the first time in several decades, we will see a new member of the C-suite, who will be responsible for driving two-way communication between the Millennial customer and the brand and for developing initiatives that will deliver long-term growth.”

The online survey, which was conducted in September 2013, queried 121 U.S. business leaders in all sectors of retail (including department stores, specialty stores, home shopping and direct-mail catalogs) primarily in the apparel, accessories, footwear and beauty sectors. Key findings unveiled in the survey include:

  • Approximately half of respondents are unaware that Millennials are expected to outspend Baby Boomers annually within five years.
  • Millennials rely most on their friends to make buying decisions, yet more than a quarter of respondents mistakenly believe that online advertising is the number one influencer of Millennials’ purchasing activity.
  • Of the executives that were surveyed, more than 30% are CEO’s or presidents, who plan to significantly increase their digital leadership over the next three years.
  • Sixty percent of respondents are not conducting any research or analysis of the Millennial customer.
  • Only 36% of respondents from companies with both physical stores and e-commerce sites offer a seamless customer experience, yet Millennials expect the channels to be integrated.

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J.Hoffman says:
Nov-01-2013 12:06 pm

I simply want to contribute some research from Accenture that relates to important article: "Who are the Millennial Shoppers" -- http://bit.ly/16Rtmav. Of course, research is available from other sources.

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From Sears Canada to head of Sephora Americas

BY CSA STAFF

Beauty retailer Sephora has appointed former Sears Canada and Loblaws executive Calvin McDonald as president and CEO of Sephora Americas, effective Jan. 1, 2014.

McDonald succeeds David Suliteanu, who has led Sephora since July 2000. Suliteanu is becoming the CEO of Kendo Brands, a separate LVMH entity, which creates new beauty brands, as well as acquires brands. The Kendo portfolio today includes brands, such as Ole Henriksen, Kat von D, Formula X and Marc Jacobs Beauty, with others in development.

“Calvin McDonald has established himself as a visionary and highly talented industry leader at two of Canada’s largest and most important retailers. We are delighted to welcome him to Sephora Americas. He will focus on building on the extraordinary growth of the business in new and existing markets and continue Sephora’s exceptional track record of industry leadership driven by David Suliteanu,” stated Christopher de Lapuente, CEO of Sephora Global and a member of the Executive Committee of LVMH. “David is moving on to lead Kendo, an incubator of exciting and creative brands beauty brands. I am delighted that he will continue to contribute to the success of Sephora and LVMH.”

Under Suliteanu’s leadership, Sephora has revolutionized the beauty industry in North America, by creating an entirely new retail shopping experience. Today, Sephora Americas offers in excess of 200 classic and emerging brands. Suliteanu and his team have: expanded Sephora’s base of stores in North America to more than 330; opened the Latin American market; led Sephora’s successful partnership with JCPenney now with more than 400 locations; launched Beauty Insider, Sephora’s client-loyalty program; and driven state-of-the-art enhancements to Sephora’s digital strategy.

“Thanks to a phenomenal team and the support of LVMH, the last 13 years at Sephora have been amazing. Based on his background in creating new and exciting consumer experiences, Calvin will be a great leader for the Sephora Americas team,” Suliteanu stated. “I am excited about the opportunity to continue to work with LVMH and Sephora in growing this new business model that a few years ago was just an idea.”

Added Mc Donald, “It is thrilling to be joining Sephora Americas, which is known across the retail industry for not only having revolutionized the beauty business, but also for delivering a consistent stream of innovation in terms of merchandise, experience and digital capabilities that excite and inspire customers. I am looking forward to working with the exceptional Sephora team to build on what they have accomplished under David’s leadership. Sephora Americas is an amazing success story, and I am proud and privileged to work with our cast members, brand partners and customers and colleagues worldwide as we work to take Sephora Americas to the next level of innovation and growth."

Both Sephora Americas and Kendo will report to de Lapuente.

Prior to accepting the position at Sephora Americas, McDonald was named president of CEO of Sears Canada in 2011. McDonald began his career at the Loblaw Cos., which is Canada’s largest food retailer with more than $32 billion in sales and is known for its private-label products across a variety of categories, including health and beauty, apparel, food and others. During his 18-year tenure at Loblaw, McDonald held various roles of increasing seniority across its many divisions. Among his many achievements was launching the most successful and integrated category campaign for President’s Choice, the most successful private brand in Canada, as well as launching the “Recipes to Riches” TV show.

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