News

Tween and teen retailers remain financially vulnerable

BY CSA STAFF

Apparel chains focused on tweens and teens are increasingly at risk of filing for bankruptcy protection.

At least that’s the view of Michael McGrail, COO of Tiger Capital Group and a veteran retail liquidation and asset appraisal executive.

“While we have already seen filings from the likes of Cache, Wet Seal, dELiA*s and Deb Shops, this is likely just the beginning of a larger trend. Amid dwindling sales at many (but not quite all) tween and teen-focused chains, the sector is positioned for further consolidation and additional filings,” McGrail stated in an article for ABL Advisor.

Numerous factors are at play in the troubled teen sector, from the rise of online shopping and changing fashion tastes to teens’ penchant for spending on video games and other digital diversions.

Retailers that address their cash-flow constraints early, McGrail advised, tend to be better positioned to renegotiate and terminate their undesirable real estate.

“Cash gives retailers options,” he wrote. “When companies fall into insolvency, options are more limited with respect to lease mitigations. Without sufficient cash on hand, such chains have no choice but to file for bankruptcy. Moreover, without an infusion of additional loans or capital, they will have no means of surviving the expensive process of bankruptcy.”

While staple products such as jeans sell year-round, generally speaking apparel inventory should turn four times a year, McGrail advised, with three-plus turns also considered healthy.

“Be on guard, then, for anything less than this,” he cautioned.

Decreasing same-store sales can also be an early and clear indication that fickle tweens and teens have moved on from a particular retailer.”

For the full article, click here.

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FINANCE

Report: Ahold to sell Richmond-area Martin’s stores ahead of merger

BY CSA STAFF

The Richmond Times-Dispatch is reporting that the 19 Martin’s Food Markets stores in the area will be either sold or closed as the completion of parent company Ahold’s merger with Delhaize Group. The Richmond-area stores are just some of the 83 stores the combined companies are looking to unload across the eastern and northeastern U.S. (Richmond Times-Dispatch)

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MOBILITY

On-demand delivery – not just for perishables anymore

BY CSA STAFF

American Apparel Inc. is the latest retailer to offer customers one-hour online delivery.

American Apparel is partnering with on-demand logistics provider Postmates to offer on-demand delivery of more than 50 core basic items in select markets within one hour. The new service will be offered in 79 of the vertical specialty retailer’s stores across 31 metropolitan areas.

Consumers will receive their orders within 60 minutes, instead of the traditional four to five days it takes through standard shipping methods. Both men’s and women’s items will be available.

"American Apparel is improving its omnichannel consumer experience via Postmates by becoming their first major fashion retailer to offer 'on-demand basics'," said Thoryn Stephens, American Apparel's chief digital officer. "You'll be able to receive hoodies, t-shirts, socks and more within a sixty minute delivery window — it's great for traveling or last-minute needs."

American Apparel is also providing Postmates with real-time RFID inventory tracking that allows Postmates to display the most up-to-date merchandise offerings. The participating American Apparel retail stores will have access to the Postmates Order merchant app via an Android tablet, which will display them directly on a terminal in the store. This will allow the American Apparel retail team to retrieve and package the order while the Postmates driver is on the way to pick it up.

With a one-hour guaranteed delivery time, Postmates estimates this process will save 15-20 minutes per order and result in higher order accuracy. The integration is also set up to allow Postmates to invoice American Apparel instead of the driver's credit card at pick-up, which will result in further savings of credit card fees and time.

American Apparel previously tested with Postmates in major cities such as New York and San Francisco with limited marketing and positive results.

While one-hour delivery is most frequently associated with perishable and grocery items, consumers will inevitably expect its availability across all product categories. Consumers expect maximum convenience from their digital shopping experience, and fulfilling orders from local stores within an hour meets that expectation. The use of real-time RFID inventory tracking will have the added bonus of improving internal inventory accuracy and awareness, as well as avoiding selling merchandise that cannot be fulfilled.

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