Ethan Allen Sets Sights on Europe
Danbury, Conn. Ethan Allen Interiors said Monday that it plans to expand its global presence by establishing roots in Europe.
Like many retailers, Ethan Allen has been struggling domestically amid a slumping housing marketing and tightening credit crunch. The company hopes that by taking its store-within-a-store concept to Europe, it will open up new growth opportunities.
“The timing is right,” Farooq Kathwari, chairman and CEO of Ethan Allen said.
The retailer is tapping the expertise of Gregor Noelle, a veteran of European retail management, to spearhead the effort. Noelle most recently served as a partner at consulting firm Neuhaus & Partners.
Office stores’ pain is discounters’ gain
Amid conflicting reports of how much consumers planned to spend during this year’s back-to-school season, one thing that’s clear is that the stars have aligned for Walmart and other discount retailers.
The discount channel is always a prime destination for BTS purchases, owing to its broad assortment and reputation for low prices. However, this year those factors took on new importance as the now familiar economic concerns of high gas and food prices coupled with a weak housing market caused penny-pinching consumers to trade down and consolidate trips.
As a result, 88% of the 5,035 people surveyed in a Deloitte back-to-school shopping survey said they intended to do most of their shopping at discount retailers and value-oriented department stores identified as Walmart, Target and Kohl’s. Running a distant second in terms of preferred shopping venues were dollar stores at 37% (see chart, below).
“That was a response that came as a bit of a surprise to us,” said John Rooney, a principal with Deloitte’s consulting arm.
Deloitte’s survey, conducted July 11 to 14, also indicated 71% of consumers planned to spend less this year. That finding appears to contradict results of a National Retail Federation survey from early July that showed consumers planned to spend more this year.
Consumer intentions matter less than actual numbers, and the early read suggests Walmart is poised to school many of its competitors this year, as it has benefitted from increased customer traffic due to consumers’ desire to save money.
“Walmart’s integrated ‘Do the math and save’ campaign for back-to-school has positioned us clearly as the price leader for all school supplies,” Walmart stores division president and ceo Eduardo Castro-Wright said during an Aug. 14 pre-recorded conference call. “As with other seasons, we do believe that customers are shopping closer to the holiday and we expect momentum to increase in the coming weeks.”
Office superstores are in a more difficult spot as they have reported weak sales of late and expressed concern about future spending.
Mattel v. Bratz: Someone needs a timeout
OK. I’ll admit it. I’ve begun to see work as a sanctuary from home. (I guess that’s what happens when you live in a house with three young kids!) Then I started receiving updates on my work computer about Mattel v. Bratz, one of the most publicized legal battles to threaten the retail industry in more than a decade, and suddenly my view of the workplace—not to mention my view of the legal system—started to change.
Now, I don’t mean this as a dis to either party, because I know the stakes are still quite serious. But when I first began reading about Mattel’s case against Bratz owner MGA Entertainment, I have to admit, it felt a lot like a bunch of six year olds squabbling.
This copyright infringement case reached a crescendo last week when a Riverside, Calif., jury awarded Mattel the equivalent of $100 million in damages. And just when it looked as though there may be a semblance of closure to this case, both parties began a public fight over what really happened in that courthouse. Did the jury award Mattel $100 million in damages? Were the damages awarded to Mattel actually three $30 million non-duplicative counts? Could there be more damages down the road—even an injunction to stop MGA from producing the Bratz line altogether?
But speculation, as you know, is child’s play—frankly, this whole case reeks of juvenile bickering. I mean, can anyone tell me how we really got here? How did these two parties reach a point that jeopardizes the business of so many companies? (After all, if MGA built Bratz into a billion-dollar brand, as this case alleges, didn’t it do so on the backs of countless vendor partners—all of whom stand to lose should the house of Bratz meet its demise?)
Most troubling of all, I can’t understand why it’s taken Mattel the better part of the last decade to pursue legal action. Would Mattel be reacting with such fervor had the Bratz line not grown into the billion-dollar empire it is today?
And what about MGA ceo Isaac Larian, with his e-mail rants about the inequities of the case? (His latest was, “Memorable Quotes From The MGA Closing Arguments.”) If you’ve ever wondered why judges impose gag orders, you don’t need to look much further than Larian’s postings on the MGA Web site ( www.mgae.com ).
What I’d tell both these parties, if given the chance, is what I tell my kids when things get out of hand (as they have here). It’s starting to sound like someone needs a timeout!