Loft sales help lift Ann Inc. profit 5%; 65 stores on tap for fiscal 2012
New York — Ann Inc.’s fiscal first-quarter net income increased a better-than-expected 5%, boosted by growing sales at its Loft division. The chain, which also operates Ann Taylor, said Friday that it earned $28.7 million in the three months through April 28, up from $27.3 million a year earlier.
“By brand, Loft once again delivered a phenomenal quarter, continuing its strong momentum across all channels. Clients responded positively to Loft’s entire product offering, its compelling value proposition and engaging in-store experience, all of which contributed to very strong conversion,” said Ann president and CEO Kay Krill.
Revenue grew 7% to $560.4 million, matching Wall Street estimates, from $523.6 million. Same-store sales rose 3.8%.
Same-store sales rose 11.3% at Loft stores, outlets and the brand’s website. But they were down 6.9% at Ann Taylor, where revenue slid 15.5%. The company said fewer promotions at its Ann Taylor stores cut into sales.
At the end of the quarter, Ann had 947 stores. The company said it expects to open 65 stores this year, but it plans to downsize Ann Taylor stores and close 30 locations. It expects to have approximately 985 stores at fiscal year-end.
Foot Locker profit surges 36% on strong sales
New York — Foot Locker’s first-quarter profit rose 36%, exceeding Wall Street predictions. For the quarter ended April 28, the company earned $128 million, up from $94 million in the same quarter last year.
"2012 has gotten off to an outstanding start, with our first quarter results representing the highest level of quarterly earnings in the company’s history," said chairman and CEO Ken Hicks.
Sales rose 8.7% to $1.58 billion from $1.45 billion. Same-store sales increased 9.7%.
Foot Locker opened 25 new stores and closed 34 others during the quarter, bringing its store base to 3,360 in 23 countries as of April 23. An additional 36 franchised stores operate in the Middle East and South Korea.
Rewards: The New Currency
By Craig McLaughlin, [email protected]
There is a growing trend in the loyalty rewards space — using reward points as currency, creating a more holistic, streamlined approach to loyalty programs.
Because of current U.S. economic conditions, this trend has grown faster than anticipated. One-third of consumers find retail loyalty programs "more important" when battling tough economic times. In addition, 32.3 percent of consumers said the recession has made their participation in retail rewards programs more important. (Colloquy)
All told, participation in loyalty programs is up to 19% since 2007 (Colloquy). Over 60% of U.S. households said that loyalty card programs were important in their shopping decisions. (AC Nielsen) And the trend isn’t just for the older shoppers. Participation in loyalty programs — especially among younger adults – has risen 19% since 2007, with retail loyalty programs getting the highest scores for adding value (Colloquy.)
All this said, it’s clear that rewards are no longer just “points.” Loyalty currency has evolved beyond its single program utility to a viable and relevant form of tender incorporated into consumers’ everyday spending behaviors. Consumers have amassed billions in rewards currency across many types of programs but will no longer accept static, analogous rewards for their spending behavior. Careful spending and reward benefits are critical in today’s economy.
But reward programs have remained largely unchanged since the 1970s…providers source preferred relationships with category vendors, offering limited product selection. To avoid the negative connotations, however, of discounting – the “old school” reward program model — many marketers today are taking a more holistic view of their loyalty programs, focusing on broadening customer relationships, offering awards and recognition for existing relationships.
There are three key points in creating “relevant currency” for today’s consumer:
1. Selection –what consumers expect
2. Price – connected into the retail world, real time pricing, participating in sales, etc.
3. Convenience – we want things now
One major trend experts in the marketing space have identified for reward programs is that programs will begin to develop direct merchant relationships, allowing loyalty program members to convert their loyalty points on-site at the merchant partner for discounts, merchandise and/or services. This model allows retailers to offer an unmatched product selection, the convenience of mobile redemption and in-store pickup, while utilizing leading-edge technology for real-time pricing and customized retail promotions. This paradigm-shifting model puts retailers in a situation where they can deploy consumer based marketing opportunities, making consumers more likely to use them and come back frequently. Revenue grows, consumer loyalty grows and everyone wins.
These direct relationships with retailers open up innovative new user experience opportunities such as:
- In-store pickup (Instant availability);
- Mobile Research and Redemption;
- Unlimited access to latest, greatest products;
- Promoting retail offers (BOGO’s Free Shipping, Coupons, Discounts, etc.); and
- Real-time pricing.
A key goal, of course, to any financial provider is to drive card usage, and these direct merchant relationships and the technology behind it does just that, ultimately opening up a whole new world. The incentive of in-store pick up, discounts, promotional offers, etc. drives consumer spending and tightens their relationship with the issuing bank. In short, the bank is giving the consumers more relevant currency — what they want when they want it — with web and mobile offerings.
All of this allows the financial institution to achieve:
- Balance build;
- Enhanced value creation;
- Richer partnership with retailer;
- Innovative and efficient marketing delivery;
- Endless possibilities for partner subsidized earn and burn promotional offers; and
- Volume leverage for strategic banking relationships.
When considering a loyalty rewards program, a more holistic solution involving all parties involved in a single transaction is what is going to resonate with today’s consumer. Many of the world’s top retailers are already seeing the benefits and it’s time to take a look at the options available to you.
Craig McLaughlin is president, CEO and founder of Bridge2 Solutions (bridge2solutions.com), a marketing solutions platform providing innovative marketing and fulfillment solutions. His experience includes CIO of a Southeast incentive firm, where he developed their incentive and promotion platform and over 10 years with Accenture as a senior manager. He can be contacted at [email protected].