Saks, Macy’s, Trend Apart
Once again, the 2006 53-week calendar has made this year’s month-to-month comparisons somewhat difficult. For most retailers, the month had one less week of pre-Mother’s Day sales and one additional week of pre-Memorial Day sales. This shift clearly had different effects on different retailers. The most significant statistic coming out from this month’s analysis is the fact that eight retailers have clearly improving trends while 28 have declining trends. While this could indicate a softening of the retail market, it is interesting to look at the makeup of the two groups. The winners include value retailers like BJ’s and Sam’s, mid-market retailers like Jos. A. Bank and Guess, and top-of-the market retailers like Tiffany’s and Saks. The declining group includes retailers in virtually every channel. Go to www.gordmangroup.com to view the detailed report.
The most interesting story may be the opposite long-term trends of Saks and Macy’s (the retailer formally known as Federated). In the past 12 months, Saks’ comp-store trend improved from 9% to 37.5% (May’s results were overstated by a shift in the timing of a promotion. The previous 90-day trend was 14.4%). In the same time frame, Macy’s comp-store trend declined from 4.8% to a negative 3%.
The secret to the success at Saks may be found in a September 2006 interview with Ron Frasch, vice chairman and chief merchant. In the interview, Ron discussed Saks’ return to its traditional sweet spot—serving the needs of the wealthier consumer with a classic taste level by providing superior service and styling. Ron stated, “Saks made the big mistake in chasing young consumers with tight clothing, turning off its loyal customers in their forties.” Saks is now laser-focused on a very small but affluent population.
By contrast, Macy’s has complicated its business by acquiring a large group of stores from May Co. that are in markets with incomes materially lower than the traditional Macy’s store. It is now attempting to serve a very diverse mix of customers with one national brand. This will not be an easy challenge to overcome.
Comp-Store Sales Trend
|Retailer||May 2007||Previous 90 Days||Previous 6 months||Previous 9 months||Previous 12 months|
Long lines greet iPhone debut
CUPERTINO, Calif. The long-awaited debut of Apple’s iPhone was greeted with long lines outside of Apple and AT&T stores on June 29 with some people camping out days to get one. Analysts expected Apple’s new smart phone to sell about 200,000 units during its first weekend in release.
The combination phone and Web browser is selling for $499 for a basic phone and $599 for a version with 8GB of memory. The sleek phone that’s operated with a touch screen also comes with an iPod and a camera. The phones are being sold exclusively at 166 Apple stores and 1,800 stores operated by service provider AT&T. Apple ceo Steve Jobs said he hopes to sell about 10 million iPhones during its first year on the market.
CE vet Callahan passes on
HUNTINGTON BEACH, Calif. CE veteran Phil Callahan died from what is believed to be a heart attack June 26 at the age of 57.
Callahan spent several years at Mitsubishi and also held positions at Sumiko, Hitachi and Princeton Graphics Systems. In June 2005 he founded a public relations and consulting firm named Callahan Public Relations and Consulting.