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Top-Shopping at Nordstrom: An Equation for Success?

BY Jeff Green

If you’ve spent any time in Nordstrom over the past few years, you’ve probably noticed their efforts to integrate some younger, edgier product lines into their more conservative upscale fashion selections. It seems they’re taking these efforts one giant step forward with the announcement of their new partnership with Topshop.

According to news reports, by September, the hip British fashion line will occupy 4,000 square feet of dedicated space in 14 of Nordstrom’s select locations. Nordstrom will also sell Topshop apparel online, and the two brands will collaborate to develop and sell a range of specially designed products.

I think this is a great move for both companies. First of all, this partnership will help Nordstrom move forward with diversifying their offerings and appealing to a younger demographic, which has been a fairly successful effort by the retailer so far. In fact, I think the way Nordstrom has gradually become “cooler” without losing their core brand identity in the process has kept them competitive throughout the downturn. For Topshop, they have three existing locations in the U.S.: Vegas, New York and Chicago, with a fourth store lined up to open in L.A. next year. The Nordstrom partnership offers them invaluable brand exposure and a tremendous opportunity to establish a foothold in other major American markets without the expensive brick-and-mortar investment that would normally be necessary. They’ve used a similar strategy with The Bay department stores in Canada, with great success, and I expect they will have similar results here. In fact, I think we’ll see them expand rather quickly beyond these initial 14 to even more Nordstrom stores.

I think this partnership is a great fit even beyond the basic economic calculus. While some might look at this deal and see two dissimilar brands, I see two retail icons with a lot in common. As department stores go, Nordstrom occupies a relatively unique space right now in the marketplace, bridging the gap between promotional and upscale. I see that as an ideal fit for a brand like Topshop, which is similarly positioned with respect to price point and retail/fashion philosophy. I don’t think you can slap brands together at random and expect to have success. They have to be a good fit on several levels, and these two brands are.

I am surprised we haven’t seen more international brands adopt a similar strategy. Take Zara and H&M for example. While we think of Zara and H&M as hot brands today, it took both retailers years to gain brand traction in the U.S. Remember, well over a decade ago, H&M started out in small, Upstate New York markets in Pyramid malls and it almost derailed their whole expansion plan. Topshop can inevitably avoid that long, risky and expensive ramping-up process through their partnership with Nordstrom. This is definitely a strategy other international brands can learn from. It would have been interesting to see what would have happened if H&M had taken this same approach. Perhaps they would have gained traction faster.

What do you think? Do you think the Nordstrom/ Topshop partnership makes sense? Will we see more international brands partnering with U.S. brands in the near future? Please make a public comment below or feel free to e-mail me privately at [email protected].


Click here for past columns by Jeff Green.

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Iconix sees 5% boost in 2Q revenues

BY CSA STAFF

NEW YORK — Iconix Brand Group reported that total revenue for the second quarter of 2012 was approximately $93.6 million, a 5% increase as compared with approximately $89.3 million in the second quarter of 2011.

The company reported net income on a non-GAAP basis of $32.4 million, as compared with approximately $32.3 million the prior year quarter. Non-GAAP diluted EPS for the second quarter was 45 cents compared with 43 cents in the prior year quarter.

Neil Cole, chairman and CEO of Iconix Brand Group Inc. commented, "We are pleased with our overall performance in the second quarter. Our strategy of building our brands globally is gaining momentum with the launch of our India joint venture with Reliance and our first two direct-to-retail licenses in Europe. Looking ahead, we see continued opportunities to grow the portfolio both in the U.S. and around the world. In addition, with our significant free cash flow and strong balance sheet we plan to continue to deliver increased shareholder value through acquisitions and share repurchase."

The company is reaffirming its full year 2012 revenue guidance of $340 to $350 million, its 2012 non-GAAP diluted EPS guidance of $1.65 to $1.74, its 2012 GAAP diluted EPS guidance of $1.48 to $1.57, and its 2012 free cash flow guidance of $174 to $181 million.

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NPD: Last-minute back-to-school spending on the rise

BY Gail Hoffer

Port Washington, N.Y. — Once again, consumers are putting off back-to-school shopping until the last minute, but retailers can take solace in the fact that they intend to spend more this year.

According to NPD’s survey, 31% of respondents said they plan to spend more this year, compared with 22% who made that claim in 2011. The number of consumers who plan to spend less went from 38% in 2011 to 24% this year, while those who plan to spend the same rose from 40% to 46%.

When it comes to when they plan to shop, the numbers were essentially the same from 2011 to 2012. This year, 37% shoppers said they will finish their back-to-school shopping by Aug. 1 compared with 38% from the year before. This year, 58% of consumers plan to have their shopping done by Sept. 1, compared with 57% for the prior year.

“Retailers should plan to see a rise in sales when the temperature drops,” said Marshal Cohen, chief industry analyst, The NPD Group. “The summer heat wave in much of the country is a possible contributor to the delay in back-to-school shopping.”

Where consumers spend their money this year has shifted, with the bulk of the spending to be done at department stores (26% of those surveyed), followed by footwear specialty stores (25%) and online (16%).

“There will be waves of sales growth – in the early stages, school supplies and electronics will do well," said Cohen. "And when school is back in session apparel and footwear will show some true promise, driving shoppers to department, sporting goods, and specialty stores."

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azee1122 says:
Jan-09-2013 09:42 am

Thanks for the valuable information and insights you have so provided here... mahjong

azee1122 says:
Jan-09-2013 09:42 am

Thanks for the valuable information and insights you have so provided here... mahjong

J.Jay111 says:
Nov-03-2012 02:40 pm

I would like to thank you for the efforts you have made in writing this article. I am hoping the same best work from you in the future as well. Thanks... machineasous-fr.net

J.Jay111 says:
Nov-03-2012 02:40 pm

I would like to thank you for the efforts you have made in writing this article. I am hoping the same best work from you in the future as well. Thanks... machineasous-fr.net

M.Manu says:
Jul-26-2012 09:11 am

Informative article. I work for McGladrey and there's a white paper on Retail on the website ( http://bit.ly/JDHmUU ) that describes current trends in US retail sector with insights from industry experts.

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