Macy’s misses on earnings, cuts same-store sales guidance
New York – Although Macy’s Inc. reported a 4% increase in net income to $292 million in the second quarter of fiscal 2014, from $281 million in the same period a year earlier, the company still missed Wall Street expectations. Leftover merchandise from a sluggish first quarter helped keep Macy’s profit growth down.
Net sales also missed Wall Street estimates, rising 3.3% to $6.27 billion from $6.07 billion in the same quarter a year earlier. Same-store sales rose 3.4%, but Macy’s reduced its same-store sales guidance, in part due to the need for continued markdowns to clear inventory.
Terry J. Lundgren, chairman and CEO, cited omnichannel innovation, such as a growing buy online-pickup-in-store program, as well as targeting of Millennial shoppers, as factors that should help Macy’s performance in the second half of the year.
“We are approaching the second half of 2014 with confident optimism in our business strategies, merchandise assortments and marketing plans, tempered with the reality that many customers still are not feeling comfortable about spending more in an uncertain economic environment,” Lundgren said. “Thus, we remain focused on outperforming our competitors through innovation in omnichannel, which has added new dimensions in how consumers can shop us and how our company can satisfy customer demand. This includes a robust Buy Online Pickup in Store process, which has been rolled out to all full-line Macy’s stores nationwide so that it is fully available this fall and into the holiday shopping season. Moreover, our Millennial strategies have sharpened our merchandising and marketing to customers in the age range of 13 to 30. This has created new positive energy as our customers begin back-to-school shopping.”
Build-A-Bear Workshop has new product chief
Build-A-Bear Workshop has appointed Jennifer Kretchmar as chief product officer and innovation bear. She will report to CEO Sharon John.
Kretchmar will lead the company’s merchandising and product development teams and be responsible for product development, design, quality, sourcing, merchandising, planning and wholesale.
"Jenn is a seasoned merchandising executive with 20 years of experience in senior leadership roles with both toys and children’s products," said John. "I am pleased to have her join the team and confident that she will bring valuable perspective as we evolve our business model to leverage the strength of the Build-A-Bear Workshop brand and drive future growth."
Kretchmar most recently held the position of SVP of product and brand management with the Stride Rite Children’s Group of Wolverine World Wide where she was responsible for the global product creation strategy for a diverse portfolio of children’s footwear brands including Stride Rite, Sperry Top-Sider, Saucony, Keds, Merrell, Robeez, Jessica Simpson and Hush Puppies. She also has experience in a number of business models including specialty retail, wholesale and international franchising. Kretchmar completed her undergraduate studies at San Francisco State University and graduate courses at The Monterey Institute of International Studies.
Target Canada tackles merchandising, pricing
Mississauga, Canada — Target Canada is launching several initiatives to improve business performance and better deliver the Target brand experience to Canadian customers. Among the initiatives are a partnership with interior designer and TV host Sarah Richardson, who will launch an exclusive home décor line at Target Canada in fall 2015.
Target is also partnering with home décor and apparel brand Roots, expanding its maternity assortment by 50% in September 2014, expanding cosmetic lineups, launching an exclusive brand of household cleaners called Better Life and the eco-friendly European Ecover line in September 2014, introducing an exclusive appliance line called French Bull, and adding more than 30,000 new items to its assortment between now and Christmas.
Target Canada is also introducing a new price match policy, which includes price matching for any local competitor’s flyer or weekly ad (print or online), and price matching for select online retailers, including Amazon.ca, Walmart.ca, Bestbuy.ca, Toysrus.ca, Babiesrus.ca, CanadianTire.ca, Futureshop.ca and Sears.ca.
In addition, customers can now use popular apps, such as reebee and flipp to price match, instead of bringing a printed flyer. Price match can now be completed at the register instead of guest service. Target Canada has also added about 1,000 additional items to its roster of 20,000 items that are regularly shopped, to compare prices with its largest competitors.
Furthermore, Target Canada has undertaken a variety of initiatives to address in-stock issues, including a physical count of inventory at all stores, resulting in a reset of systems, and more accurate ordering and shipping data, as well as better forecasting and allocation of product based on sales history and promotional plans to ensure the right amount of product is in the right place at the right time. The retailer is also adjusting delivery schedules so stores receive merchandise more frequently, and providing new training and processes to headquarters and in-store teams to create good routines and engaging store team members.
The initiatives come on the heels of some leadership changes in spring 2014 and a comprehensive review of its Canadian operations. Target Canada has recently added president Mark Schindele; senior VP of merchandising John Butcher; and senior VP of stores and distribution Janna Adair-Potts. In addition, Target’s search for a non-executive chair with deep Canadian experience is ongoing.
"We know we still have work to do, but the entire Target team is focused on continuous improvement so that Canadian guests will have the Target experience they deserve," Schindele said.