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Spotlight On: Color Trends

BY Katherine Boccaccio

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“The expectation of today’s consumer has risen — and that includes color and the way it is used,” said Leatrice Eiseman, color specialist, author, and consultant to Pantone, in the SPECS session entitled “Color My World – Color Trends.”

No color has higher expectations for 2013 than green, according to Eiseman. In fact, emerald (specifically Pantone 17-5641) has made a comeback, officially named Pantone’s 2013 Color of the Year.

“Green symbolizes sustainability and health, but it also is a fashion color,” she said.

The green hues can also be considered neutrals, supplanting tans, taupes and beiges as a retail backdrop. Deeper greens, such as olive and brighter shades like aqua and turquoise, can be strategically used to draw attention.

Other current color trends identified by Eiseman include:

• Oranges and yellows have made a surprise appearance as accent colors, employed on laminates, outdoor furnishings and as accent shades in darkened areas;

• Among the metallics, pewter has gained hold;

• Wood tones and finishes are being mixed and matched across settings that range from elegant to rustic, gaining popularity from the attraction toward sustainability; and

• Laminates layered with color are go-to materials for 2013.

Eiseman, considered a crystal-baller when it comes to color, offered the following forecast for the coming year:

1. Look for neon pink instead of red.

2. Neutrals will be accented with splashes of color like rosedust.

3. Rugged color palettes suggest sustainability and will continue to garner favor. Tortoise shell, toasted coconut and chocolate brown will be accented by pops of color, such as orange, to add interest.

4. Traditional blues and greens, always reliable, can be accented by a brighter blue or even pink to draw attention.

5. Convivial hues — those that lie across from each other on the color wheel — will be used together to create interest.

6. Neons will be around for at least another two years.

“The current economic climate is keeping colors around longer,” Eiseman said. “We are more reticent about change. That said, we will tend to experiment more with bolder colors as accents.”

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Spotlight On: HVAC

BY Marianne Wilson

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A three-year HVAC national replacement program that increased operational efficiencies, lowered overall expenses and maximized the customer experience was reviewed in depth at the SPECS workshop session, “National HVAC Replacement Program.”

The session speaker, L.J. Mohan, VP, facilities management and energy engineering, Ralph Lauren Corp., highlighted the data used to obtain capital funding for the replacement program against competing projects in the company, and the methods used to justify and prioritize HVAC system replacements.

In making the case for such a program, Mohan made it clear that facilities management can’t go it alone.

“The CFO and COO are two very important partners for retail facilities management,” Mohan said. “We need them and we must align ourselves with their priorities.”

In the case study example, the retailer started with a pilot program in stores whose HVAC units’ EER ratings were very low, which made the end result very attractive. When the pilot was done, and the CFO saw the dollars resulting from the energy savings, the decision was made to implement the program across the chain.

In addition to energy savings, the company benefits from not having to worry about the fall-out from equipment breakdowns and not being compliant with regulations.

“It gives the CFO budget certainty,” Mohan added. Mohan explained that before senior management makes a commitment to expend capital monies, there needs to be an understanding of how the investment will benefit the company.

Mohan explained that before senior management makes a commitment to expend capital monies, there needs to be an understanding of how the investment will benefit the company.

“It’s not enough merely to show it as a ‘good idea.’ You have to demonstrate that real savings can be achieved,” he said.

HVAC replacement is currently a top-of-mind concern for many retailers. Mohan explained why: “Capital rationing in the retail industry between 2008 and 2013 has resulted in a very old and aging fleet of HVAC units.”

As a result, retailers find themselves burdened with emergency repair costs, store downtime, costly “immediate” replacements, units with non-ozone friendly refrigerants and increasing energy costs due to old, low-efficiency equipment. With the phaseout of CFC and HCFC refrigerants, R-22 has nearly quadrupled in price over the past year, Mohan advised.

Regulatory agencies and concerns about the environment are also putting increased pressure on retailers.

“Approximately 40% of the energy consumption in a small retail store is attributed to its HVAC system,” Mohan said.

Retailers’ solution to the scenario outlined above: a strategic or optimized HVAC strategy that includes a national replacement program. This allows chains to benefit from energy-efficient systems that produce more heating or air conditioning for every unit of energy consumption, dramatically reducing a company’s carbon footprint while reducing its energy costs.

The first step in developing the strategy should be a detailed condition assessment of all HVAC equipment. The assessment should include location, age, run time, serial numbers, repair and maintenance costs, and SEER ratings.

“Gathering this information is a very laborious task,” Mohan warned. “You need a partner, either a manufacturer or service provider, to help you do it. But the repercussions of not doing it are very significant.”

Retailers should also consider optimal timing in repair versus replacement. “The need for major repairs starts at eight years of use,” Mohan said. “That is the time when the ‘known risk’ period shifts to a period of uncertainty.”

Mohan reviewed HVAC spend with regard to preventive maintenance (PM) versus repair spend. In companies with PM programs rated best in class, the repair spend as a percentage of PM was 250%. But repair spend as a percentage of PM spend jumped to 753% in retailers with poor PM programs.

HVAC optimization is good for store operations in that it helps to maximize the customer experience.

“It increases reliability and allows store personnel to focus on the customer, and provides for a pleasant shopping experience,” Mohan said.

It also provides significant financial benefits in that it reduces energy and maintenance costs, minimizes complaints and unplanned capital expenditures.

“These energy savings translate into real dollars,” Mohan said. “It’s positive cash flow with attractive net present value.”

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Spotlight On: Sustainability

BY CSA STAFF

Green leasing is surprisingly revolutionary. Despite the retail clamor for sustainable building and policies, leases rarely incorporate environmental standards into the legal language.

In the SPECS session, “Collaborating for Sustainability,” the Retail Industry Leaders Association (RILA) presented its case on the importance of building in leasing clauses that promote environmental efforts. Adam Siegel, VP sustainability and retail operations for RILA, was joined by a pair of retailers — Maria Barr, manager of global sourcing operations for The Disney Store, and Bob Jensen, director of construction for Family Dollar – to discuss where the industry is in terms of sustainable leases, and how they are working to help the movement gain traction.

“There is a disconnect between the landlord and the tenant,” RILA’s Siegel said. “Tenants want to install energy-saving devices and increase recycling rates, but most of the time those programs are not regulated by the lease.”

That’s not to say that landlords aren’t on board. In fact, that is where the greatest disconnect is, said the panel. The right hand (retailer) is unaware of what the left hand (landlord) is doing. And vice versa. The answer lies in green leasing.

According to Siegel, there are five reasons for a green lease:

1. Improve base building efficiency;

2. Align incentives for waste/energy reduction;

3. Improve tenant space;

4. Increase utility usage transparency; and

5. Clarify access and control of key spaces.

Disney has been a leader in the green leasing charge.

“At Disney, we knew we had to collaborate with our landlords, as well as our merchant teams and production/sourcing teams for all sides of the environmental equation,” Barr explained.

The company created a pilot project in several shopping center stores to test feasibility of increased recycling. It’s in the very early stages, but it’s about turning challenges into opportunities, Barr told the audience.

Bob Jensen, who wears the sustainability hat for Family Dollar, has set a goal to develop a thoughtful green lease that contains negotiable and non-negotiable items that are designed to impact a building’s environmental and energy goals.

“We have to keep asking, ‘What if?’ in order to move this initiative forward,” Jensen said.

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