News

Franklin Flea returning to Philadelphia in April

BY Michael Fickes

Philadelphia — Franklin Flea’s successful holiday season earned the once-a-week indoor flea market a return booking for April.

Starting back in November, Franklin Flea brought local artisans and vendors together in Center City Philadelphia to showcase handmade, repurposed and antique items as well as an assortment of artisan foods.

Producer and curator Mark Vevle and Pennsylvania Real Estate Investment Trust, owner of The Gallery, combined forces to bring the market to the city. PREIT provided space for the market’s more than 50 vendors in its historic former Strawbridge and Clothier building at 8th and Market.

Vevle credits Franklin Flea’s location in the thriving Market East section of Philadelphia with the project’s popularity. “The cross-market of shoppers we found in this centralized location was crucial to the success of Franklin Flea, and also paints a colorful picture of the long-term business story we will see in the months to come,” he said.

PREIT CEO Joseph F. Coradino said: ““The success of Franklin Flea speaks volumes to the fact that Philadelphia – especially the Market East corridor – is ready for a fresh, revitalized retail environment, and we are optimistic we will be able to deliver it in the future with a remerchandising of the Gallery.”

Vevle and PREIT have already begun planning Franklin Flea’s return for a spring market in April.


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News

Bloom out at Family Dollar, Reiser named CMO

BY CSA STAFF

The search is on for a new president and COO at Family Dollar following the resignation of Michael Bloom amid deteriorating financial results and a 3% same store sales decline in December.

Bloom, who recently donned a disguise to appear in an episode of the CBS show "Undercover Boss," spent two years as Family Dollar’s president and COO and joined the company from CVS. In conjunction with his departure, Family Dollar elevated Jason Reiser to the role of EVP and chief merchandising officer and hewill report directly to Family Dollar chairman and CEO Howard Levine. Reiser joined Family Dollar in July 2013 as SVP of merchandising after a 17-year career with Sam’s Club and by October of last year he had already been promoted to the role of SVP/lead merchandising officer.

The senior leadership moves were announced in conjunction with dismal sales results for the company’sfirst quarter ended November 30 and a 3% decline in December same store saleswhich prompted the company to forecast further top lineweakness and lower its profit forecast. Family Dollar said sales for its first quarter ended November 30, increased a meager 3.2% to $2.5 billion due to the addition of new stores. Same store sales declined 2.8% as fewer people shopped its stores and those who did spent less money.

Reversing those trends now falls to new head merchant Reiser who will have responsibility for the company’s merchandising, global sourcing, marketing, replenishment and financial planning teams.

“Continuing to refine our assortment to meet the needs of our customer is critical to being a compelling place to shop,” said Levine. “Jason’s proven leadership, merchandising experience and deep understanding of our customer position him well to ensure that we grow both customer trips and market share.”

Improvement is not expected to be immediate, however, as Levine noted a challenged consumer and intensified promotional environment continue to affect the company’s business. That was the case in December when Levine said the company was forced to react to softness in discretionary categories by becoming more promotional.

"Reflecting our December results, our expectations that the macroeconomic trends will continue, and the impact of investments we plan to make to strengthen our value proposition, we have lowered our earnings expectations for the second quarter of fiscal 2014 and the full year,” Levine said. “While we have made meaningful progress to improve our execution, our financial performance has not met our expectations. We have a great business model and ample growth opportunity, and I know we can do better.”

The immediate focus for Family Dollar, according to Levine, is to execute the basics of retail; re-accelerate customer traffic, strengthen the value proposition and enhance the relevancy of its assortment.

“We also intend to maintain our focus on reducing costs while also selectively investing in new stores, our renovation program and supply chain improvements to position our long-term growth,” Levine said.

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FINANCE

Macy’s to shut five stores, cut 2,500 jobs; will save $100 million annually

BY Marianne Wilson

Cincinnati — Macy’s on Wednesday said that it plans to close five underperforming stores in early spring 2014 and cut 2,500 jobs in “organizational changes” to sustain its profitability. The cost-reduction initiatives are expected to save the retailer about $100 million annually, beginning in 2014.

“We began five years ago with a set of business strategies that were largely untested by a national retailer of our size and scope. As the success of these strategies has unfolded, we have identified some specific areas where we can improve our efficiency without compromising our effectiveness in serving the evolving needs of our customers,” said Terry J. Lundgren, Macy’s, Inc. chairman, president and CEO.

Separately, Macy’s reported that its holiday same-store sales, together with comparable sales from departments licensed to third parties, rose 4.3%. The chain narrowed the range of its guidance for same-store sales growth in the second half of 2013 to a range of 2.8% to 2.9% (from previous guidance of between 2.5% and 4%), and maintained its full-year 2013 earnings guidance. Macy’s also forecast profit for its next fiscal year that is higher than analysts estimate.

The retailer described the store shutterings as a series of “normal-course adjustments” to its portfolio of Macy’s and Bloomingdale’s locations nationwide.

“Our stores remain a very important component of our omnichannel strategy for both the Macy’s and Bloomingdale’s brands,’ Lundgren said. “We continue to maintain a very strong nationwide network of stores through an ongoing process of selectively adding new locations while also trimming those that no longer meet our performance requirements or where our leases were not renewed.”

The stores to be closed are in Fiesta Mall, Mesa, Ariz. (opened in 1979); Metcalf South Shopping Center, Overland Park, Kan, (opened in 1967); Jamestown Mall, Florissant, Mo. (opened in 1994); Medley Centre, Irondequoit, N.Y. (opened in 1990); and Fashion Place Mall, Murray, Utah (opened in 1988).

In organizational changes:

  • The Midwest Region of Macy’s stores is being combined with the North Region, creating a new North Central Region and reducing the ongoing number of regions to seven from the current eight. Nine existing stores districts also are being combined with nearby districts – thus reducing the ongoing number of districts to 60 from the current 69.
  • In the merchandise planning organization, the district planner role is being eliminated for soft home categories. Going forward, responsibility for soft home planning will be shifted to the regional and national level.
  • Some positions in Macy’s stores will be realigned, combined and reduced in a manner that “improves productivity and efficiency while also fostering high standards for customer engagement and service,” Macy’s said.
  • Certain central office, administrative and back-of-the-house expenses across the company will be trimmed, which involves reductions in workforce, as well as in non-payroll costs.
  • Macy’s stressed that it continues to add positions in other parts of the company – such as in online operations, direct-to-consumer fulfillment and new stores. In total, the Macy’s, workforce is expected to remain at a level of approximately 175,000 associates.
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