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Levi Strauss adds Charlotte Russe CEO Jenny Ming to board

BY CSA STAFF

Levi Strauss has added Jenny Ming to its board of directors. Ming is president and CEO of Charlotte Russe, a specialty retailer of apparel and accessories catering to young women, with more than 500 stores across the US, a position she has held since October 2009.

“Jenny Ming is a seasoned merchant and respected leader with nearly 30 years of valuable apparel industry experience,” said Stephen C. Neal, chairman of the board of LS&Co. “We welcome her to the board of Levi Strauss & Co. as we continue to drive long-term, profitable growth.”

Ming joined Gap in 1986 and held various executive roles, including president of Old Navy, from 1996 through 2006, where she oversaw all aspects of Old Navy and its 900 retail clothing stores in the US and Canada. Ming also serves as a special adviser to the board of directors of Barneys New York, as a member of the board of trustees for the Museum of Chinese in America in New York City and as a member of the board of the Merage Foundation for the American Dream.

“As a lifelong Levi’s fan, I've long respected and admired its ubiquitous and enduring appeal around the world,” said Ming. “While the company is steeped in rich heritage and has millions of loyal fans, there's still so much more potential. I'm excited to help the company connect with its next generation of loyal consumers.”

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When digital goes physical

BY CSA STAFF

With average in-store purchases exceeding online sales by two and three times, popular online-only retailers, including Birchbox, Piperlime, Bonobos and Blank Label are continuing their expansion into physical storefronts, further accelerating the trend of online retail concepts expanding their omnichannel sales strategy to include physical locations.

While the allure and attraction of opening physical store locations is appealing, there are fundamental differences between operating an online-only storefront and a physical store environment. The success of moving into an omnichannel offering hinges on how a brand prepares for and manages a collection of critical factors during the process.

To test the waters, multiple online retailers have been seeking “popup” or temporary retail space as an alternative to a permanent physical location — with mixed results. This strategy is largely driven by the relatively low cost of entry for most popup events, along with the opportunity to create an initial impression in multiple markets in a short period of time. For the most part, a popup location by definition and relatively short duration provides only a limited opportunity to build a connection and awareness with new customers.

Most digital retailers considering a physical location have likely already built and manage a complex system of distribution channels, including order fulfilment, website analytics and a host of other interconnected disciplines. In making the transition to the physical retail environment, new challenges need to be considered, including building a team of professionals to guide the decision making process in a whole new world, specifically relating to store design, municipal regulations, architecture, site selection, lease negotiation, construction management and store merchandising. Almost every business book ever written stresses the importance of knowing your own strengths and weaknesses and it absolutely applies here.

The axiom of “failing to plan is planning to fail” rings true when transitioning to the physical environment. In creating a digital concept, these brands created a comprehensive business plan to guide the launch of their digital storefront, and it is critical to take the time to craft and develop a comprehensive strategy for this process as well. This plan should include a clearly articulated mission for the physical stores (e.g. promote brand awareness, drive sales growth, etc.), a breakdown of estimated expenses related to new store design/architecture, a new store growth count and target market strategy, and a definition of success related to the new store program.

For most digital-to-physical retail concepts, the goal is not simply to saturate a market with physical stores, but to drive brand awareness and traffic to the digital storefront. Therefore, identifying which major metropolitan markets most closely reflect their customer profile — which may not be where the digital storefront is currently operating — while also providing exposure and maximizing customer engagement is extremely important.

Significant attention and thought should go into understanding where to position the physical store within a particular retail environment (e.g. corners, in-line, visibility, signage, etc.) and which co-tenants in close proximity could maximize the opportunity for success. This is happens to be true for all expanding retail concepts, including established retail brands, which can underemphasize the importance of this part of the process and find themselves in challenging store locations as a result.

The days of retailers executing more than 50 new store rollout programs are largely behind us. In today’s retail environment, even national brands are viewing their stores more as showrooms to support and drive online sales; and this is even more significant for digital retail concepts. Given this, total store count for an entire new store rollout program may only be one per targeted major metropolitan area, and include only five to 10 stores total in strategic cities throughout the country.

According to U.S. Department of Commerce, more than 90% of retail sales are still occurring in-store, however, as digital retail concepts make the move into the physical storefronts, the industry continues to gather critical data and information regarding the ideal size, layout and positioning of these stores in the traditional retail landscape. The good news: those who have made the move to open brick and mortar locations have experienced increased sales and customer retention both in-store and online.

As consumers continue to seek out more authentic and sustainable products, the emergence of digital brands into the physical store environment has created more outlets for smaller and, in many cases, U.S.-based manufactures, ultimately creating more options for consumers. This is a trend that will continue to grow in the foreseeable future and is truly an exciting and groundbreaking movement for the retail industry.


James McCandless is the managing director of retail for Streetsense, an X Team International partner and multidisciplinary design and strategy collective providing solutions to the retail, restaurant, hospitality and real estate sectors. Streetsense focuses on creating meaningful brands, places and experiences. To learn more, please visit www.streetsense.com.

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Christopher & Banks lowers sales forecast for third quarter

BY CSA STAFF

Continued softness in mall traffic and lower-than-expected sales from its September fashion show have prompted Christopher & Banks to cut its sales forecast for the third quarter of fiscal 2014.

The retailer believes sales have also been negatively affected by the demand for fashion merchandise that exceeded planned inventory levels, as well as late receipts associated with the West Coast port disruptions. The retailer announced the revised guidance just a month after reporting “solid” second-quarter results and just days after announcing the rollout of a new store concept.

For the third quarter of fiscal 2014, Christopher & Banks now expects total net sales to be in the range of $114 million to $118 million, as compared to its prior guidance of between $122 million to $124 million in net sales and $118.1 million of net sales in the prior year’s third quarter. Christopher & Banks also cut its forecasts for third quarter gross margin improvement and SG&A dollars, and increased its forecast for inventory.

“We believe that the continued softness in traffic trends, coupled with the difficult overall retail environment, have adversely affected our sales as compared to our initial expectations for the quarter,” said president and CEO LuAnn Via. “We are operating our business with the assumption that the current environment will remain challenging and promotional activity will continue to be aggressive, creating continued pressure on sales and margins. That said, we have seen recent improvements in the sell-through of fashion merchandise and continued strong margins in our core offerings.”

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