News

Macy’s and Kohl’s miss mark in December; Nordstrom shines

BY CSA STAFF

New York City — On the heels of a strong November, some department store retailers reported surprisingly weak December revenue. Results were impacted by a blizzard in the Northeast, which took a bite out of sales after Christmas.

The results raised some worries that the holiday season might be less stellar than some had hoped. Still, much of Wall Street still predicts that November and December spending will show the largest annual increase since 2006.

"It’s not shaping up to be a blowout holiday for retailers. It’s slow and steady," said Ken Perkins, president of RetailMetrics.

Macy’s missed the Wall Street mark with a same-store sales gain of 3.9%. Analysts expected a same-store sales rise of 4.5%. But the combined November and December figure rose 4.6% and the retailer is maintaining its profit outlook for the fourth quarter.

“Sales in December were strong at both Macy’s and Bloomingdale’s, consistent with our high expectations, despite snowstorms that disrupted after-Christmas shopping along the East Coast,” said Terry J. Lundgren, chairman, president and CEO of Macy’s.

Kohl’s Corp. also fell short of expectations. The company’s same-store sales rose 3.9% in December, compared with the 4.3% increase analysts expected. For the five weeks ended Jan. 1, Kohl’s said total revenue climbed 5.9% to $3.19 billion. Online revenue surged 66%.

At J.C. Penney, same-store sales rose a better-than-expected 3.7% surpassing Wall Street’s expected 3.3% gain. It was the chain’s best holiday sales gains since 2006. Total December sales increased 2.3% to $2.96 billion, with the chain’s off-mall and newer stores, including its Manhattan location, outperforming the company average.

Higher-end retailers turned in strong results as affluent consumers returned to spending. Both Saks and Nordstrom outpaced estimates. Nordstrom reported an 8.4% increase in December same-store sales, while, Saks said same-store sales rose 11.8%.

J.C. Penney same-store sales rose 3.7% surpassing Wall Street’s expected 3.3% gain.

Other department store same-store sales results include:

  • Dillard’s same-store sales rose 7%.
  • Bon-Ton same-store sales edged up 0.1%, citing severe snowstorms for its weak performance.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Are you hiring seasonal employees this year?

View Results

Loading ... Loading ...
News

Many retailers fall a bit short in December; Limited and Abercrombie shine in specialty sector

BY CSA STAFF

New York City — After coming off a strong November, U.S. retailers found their momentum largely waned in December, with sales impacted by a still-cautious consumer, early discounting and a blizzard that crippled the Northeast in the days immediately after Christmas. But while many chains missed Wall Street’s heightened expectations for December, the retail industry still turned in its strongest holiday performance since 2006.

The International Council of Shopping Centers said its index of December same-store sales rose 3.1% versus a year ago, short of the 3.5% rise expected by analysts.

The overall season was good, but the strength came from the beginning of the season," said Michael P. Niemira, chief economist, ICSC, in an Associated Press report. "This is kind of a wake-up call. It’s back to reality."

Thomson Reuters, which tracks same-store sales for a group of 28 national chains, said total sales for the group were expected to post a 3.4% increase in same-store sales for December, following a 5.6% bump in November.

Still, if retailers hit the 3.4% mark, it would be the best showing since December 2006, when same-store sales rose 4.7%.

Strong online sales, which many retailers don’t include in their monthly figures, also brightened the holiday spending picture as well. Consumers spent 13% more online this holiday season, ringing up a record $30.81 billion in spending, according to comScore.

On the apparel front, Limited reported a 5% rise in same-store sales, beating analysts’ expectations of a 4.6% gain, and Buckle, which recorded a 6.1% same-store sales gain, when a 4.5% gain was expected. Abercrombie & Fitch’s same-store sales soared 15%.

Among those that didn’t fare well in December was Gap, whose same-store sales dropped 3%, missing Wall Street expectations for a 2.6% gain. Net sales were flat at $2 billion.

By division, same-store sales at Gap North America stores fell 8%. At Old Navy North America stores the figure was down 2% International results declined 4%. The one bright spot was Banana Republic North America, where same-store sales edged up 1% in December.

American Eagle saw same-store sales plummet 11% and total sales fell 6%. Analysts expected a same-store sales decline of 1.7%.

In other apparel same-store results for December:

  • Aeropostale same-store sales slid 5%.
  • Urban Outfitters same-store sales were flat.
  • Zumiez same-store sales rose 9.2%, but missed Wall Street expectations of an 11.5% gain.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Are you hiring seasonal employees this year?

View Results

Loading ... Loading ...
News

Who is my eStore manager?

BY CSA STAFF

By Manish Lonial and Akhilesh Srivastava [email protected], [email protected]

Coming out of a Macy’s store a man introduced himself as the store manager and thanked us for shopping at Macy’s. Driving back home my 7 year old daughter asked me: “Dad who is the store manager when you buy at home on your laptop?” Hmmm…never thought about that before.

I looked back thinking about the e-retailers that I have worked with and started searching for the person in the ecommerce organization who has the bottom line responsibility of website operations, sales and profitability goals and customer satisfaction:

  • .com VP/president?
  • Customer service manager?
  • IT manager?
  • Content manager?
  • Marketing manager?

Everyone had a stake in the game but the question remained: Who is my eStore manager?

Store manager are measured based on the sales and profitability targets as well as customer satisfaction. To meet their objectives, store manager for brick-and-mortar store take responsibility for all store operations including customer satisfaction, sales and returns management, in-store marketing, inventory management, loss prevention and risk management.

Like brick-and-mortar stores; product, price and customer service still hold the paramount importance for the eStore. However, success of eStore is critically dependent upon few additional factors:

  • Website availability: Your eStore is always available for business.
  • Website performance: Response time which customers experience while on the eStore.
  • Ease of navigation and product availability: Your eStore can carry "unlimited" products.
  • Website scalability: Your eStore can accommodate huge number of customers while providing them with individual experience.

If you look carefully at what differentiates an eStore from a regular store you will notice a lot more IT system aspects that calls for a very diverse skill set in your eStore manager.

Majority of retailers continue to manage their e-commerce operations with separate business and IT teams similar to their bricks and mortar stores. This often results in a sub-optimal customer experience from retailers’ eStore, which is not consistent with the brick-and-mortar stores potentially hurting retailers brand image.

In our experience, setting up a dedicated eStore operations team can solve this problem.

The eStore manager — person leading the eStore operations team — should have the bottom line responsibility for successfully running the eStores and measured for the defined sales, profitability and customer experience and satisfaction metrics. The eStore manager should have the ability and organizational power to bring business and IT together to run the eStore.

Depending on organization’s maturity and culture one can chose to bring in a mix of Business and IT resources to the eStore operations team to provide an enriching experience to the customer.

The advantage of such an organization framework is:

  • eStore operations becomes a specialized function and the team provides a good balance of resources combining business and IT functions.
  • Running the eStore is a critical organization function. Your eStore is one of the largest stores in the organization with needs care 24×7 as your eStore is always open for business. Having dedicated focus allows quick turn around and better service to your customers.

Conclusion
Over last few years, online channel has grown in importance. There is a strong need and a business case to establish the dedicated eStore organization if online channel is part of long term strategy. Even the retailers who have identified the need are often struggling to setup the right organization structure.

Manish Lonial is a Principal in the Next Generation Commerce practice of Infosys Consulting. He can be reached at [email protected].

Akhilesh Srivastava is a senior principal in the retail, distribution and CPG practice of Infosys Consulting. He can be reached at [email protected].

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Are you hiring seasonal employees this year?

View Results

Loading ... Loading ...