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These retailers are the biggest winners with exit of Toys ‘R’ Us

BY CSA Staff

With the holiday shopping season looming, retailers are jumping in to fill the void left by the demise of Toys “R” Us — but two rivals are the clear winners.

Walmart and Target appear to be the biggest winners to date, according to a study by Gordon Haskett Research Advisors in partnership with data provider Alpha Hat, CNBC reported.

Walmart has captured 26% of lost Toys “R” Us traffic, Target got 14%, Dollar General and Dollar Tree each captured 10%, and Costco got 8%, the report said, citing a research note by Gordon Haskett.

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Kroger Q2 mixed as profit tops Street, but sales come up short

BY Marianne Wilson

Kroger Co.’s second quarter profit topped estimates, but its sales came in below estimates amid ongoing intense competition in the grocery sector.

Net income rose 43.9% to $508 million, or 62 cents a share, from $353 million, or 39 cents a share, in the same period a year ago. Excluding non-recurring items, adjusted earnings per share came in at 41 cents, above estimates of 38 cents.

Sales increased to $27.87 billion from $27.60 billion, below estimates of $27.93 billion. Same-store sales rose 1.6%, below expectations.

On its quarterly earnings call, Kroger management said that its ongoing efforts to adjust store layouts and rearrange brands on the shelves, with an emphasis on its own labels, impacted same-store sales.

“This effect is not a surprise to us,” said CEO Rod McMullen on the call. “We expect the headwinds from space optimization during the first half of 2018 to become a tailwind late in the third quarter.”

Looking ahead, the company raised its net EPS guidance range to $3.88 to $4.03 from $3.64 to $3.79, but affirmed its adjusted EPS outlook of $2.00 to $2.15.

Kroger has been investing in a slew of initiatives to grow its online business as it faces fierce competition in the space from Amazon and Walmart.

“We are only two quarters into our three-year Restock Kroger plan, and we are making solid progress,” McMullen stated in a release. “Kroger customers have more ways than ever to engage with us seamlessly through our recently-launched Kroger Ship, expanded availability of Instacart, successful ClickList offering, and selling Simple Truth in China through Alibaba’s Tmall.”

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New York & Co. is changing its name, launching new brands

BY Marianne Wilson

Say goodbye to New York & Co.

The women’s apparel retailer on Tuesday announced it is changing its name to RTW Retailwinds to reflect “the ability to grow the portfolio of lifestyle brands into new categories and markets.”

The name change, expected to occur in October, is part of New York & Co.’s new strategy that is designed to drive sales to over $1 billion. It includes such new initiatives as expanding the company’s plus-size brand, Fashion to Figure (which it acquired at a bankruptcy auction last year), introducing a lingerie lifestyle brand, and debuting a Kate Hudson casual lifestyle collection. Both the lingerie brand and the Kate Hudson collection will have their own digital sites.

In addition, the retailer also plans to accelerate growth of its core namesake brand through ongoing celebrity partnerships, including collaborations with Eva Mendes, and Gabrielle Union to name a few.

“We are at a defining moment in our corporate reinvention, with a proven track record for developing celebrity and sub-brand collections that resonate with our consumers,” said CEO Greg Scott.

Over the past several years, New York & Co. has developed and implemented the necessary framework to take our company to a new level of growth, Scott continued.

“Today, over 30% of our sales are generated digitally, we have optimized our retail footprint, and have the talent and infrastructure to capitalize on our strengths,” he said.

Scott noted that, in the second quarter of 2018, the company reported its fourth consecutive quarter of comparable store sales growth, it highest gross margin rate achieved in the second quarter since 2005, and is on track to achieve adjusted EBITDA of $35 million to $37 million for the fiscal year, up from adjusted EBITDA of $30.5 million in fiscal year 2017.

The retailer said its ability to incubate new brands is further substantiated by New York & Company’s physical footprint of 425 stores, a digital presence which represented 30% of 2017 sales, a customer file with over 13 million names, and approximately 165 million annual visits online and in stores. The company’s loyalty member base represents 43% of total sales.

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