Coffee giant makes a blockbuster deal in China

BY Deena M. Amato-McCoy

Starbucks Coffee Company has closed the biggest transaction in its history.

The coffee giant is buying the remaining 50% share of its East China business from long-term joint venture partners, Uni-President Enterprises Corporation and President Chain Store Corporation. The deal is worth approximately $1.3 billion (USD) — the largest single acquisition in the company’s history, according to Starbucks.

Through the transaction, the retailer will assume 100% ownership of approximately 1,300 Starbucks stores in Shanghai and Jiangsu and Zhejiang Provinces — a move that builds on the company’s ongoing investments in China. Specifically, the deal puts Starbucks on pace to meet its goal of operating more than 5,000 stores by 2021.

“Unifying the Starbucks business under a full company-operated structure in China reinforces our commitment to the market, and is a firm demonstration of our confidence in the current local leadership team as we aim to grow from 2,800 to more than 5,000 stores by 2021,” said Kevin Johnson, president and CEO, Starbucks Coffee Company.

According to Starbucks, China is the chain’s its fastest-growing market outside of the United States in terms of store count. In East China alone, the chain operates nearly 600 stores in Shanghai, the largest number of stores globally of any city where Starbucks has a presence.

In December, Shanghai will also be the first city outside of the United States to welcome the opening of the ultra-premium Starbucks Reserve Roastery. This concept store, which debuted in Seattle in late 2014, will be dedicated to roasting, brewing and packaging rare, small-batch Starbucks Roastery Reserve coffees from around the world.

“Full ownership will give us the opportunity to fully leverage our robust business infrastructure to deliver an elevated coffee, in-store third place experience and digital innovation to our customers, and further strengthen the career development opportunities for our people,” said Belinda Wong, CEO, Starbucks China. “Our East China partners’ relentless pursuit of operational excellence and leadership has provided us a solid foundation to maximize the unprecedented growth opportunities ahead and we look forward to extending our world-class network of unique programs to support their personal and professional dreams.”

In a separate deal, UPEC and PCSC will acquire Starbucks’ 50% interest in President Starbucks Coffee Taiwan Limited (Taiwan JV) for $175 million, giving the companies 100% ownership of Starbucks operations in Taiwan. The deal is worth $175 million. Taiwan JV currently operates approximately 410 Starbucks stores in Taiwan.

“Similar to our decision in 2011 to fully license our Hong Kong and Macau market operations, we are pleased to transition our business in the Taiwan market to our long-time partners Uni-President Enterprises Corporation and President Chain Store Corporation, both highly-recognized local operators, as we continue to grow in Taiwan,” Johnson added. “This is a critical next-step as we advance our multifaceted China growth strategy for long-term profitable growth in Asia.”

Both deals will close in early 2018.


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Carter’s sales soar in Q2

BY Deena M. Amato-McCoy

Carter’s credits its U.S. retail and international segments, and its new acquisition for a jump in its second quarter sales.

Net income for the quarter ended July 1, increased $1.7 million, or 4.8%, to $37.9 million, compared to $36.2 million, in the second quarter of fiscal 2016. Earnings per diluted share was or $0.78, which beat analyst expectations of $0.71 per share, according to Zacks Investment Research.

The company’s net sales increased $52.6 million, or 8.2%, to $692.1 million. This was driven by growth in Carter’s U.S. retail segment, and the benefit of Skip Hop, a global lifestyle brand for families with young children. Carter’s acquired the company in February 2017. Specifically, Ship Hop contributed $25.0 million to consolidated net sales in the second quarter of fiscal 2017.

Changes in foreign currency exchange rates in the second quarter of fiscal 2017 compared to the second quarter of fiscal 2016 adversely affected consolidated net sales in the second quarter of fiscal 2017 by $2.6 million, or 0.4%. On a constant currency basis (a non-GAAP measure), consolidated net sales increased 8.6% in the second quarter of fiscal 2017.

For the U.S. retail segment specifically, sales increased $39.0 million, or 11.1%, to $391.8 million. U.S. retail comparable sales increased 6.0%, comprised of comparable stores sales growth of 0.4% and comparable e-commerce sales growth of 27.6%. Ski Hop contributed $0.9 million to segment net sales in the second quarter of fiscal 2017.

In the second quarter of fiscal 2017, the division opened 11 stores and closed three stores.

“We achieved good growth in sales and earnings in our second quarter,” said Michael Casey, chairman and CEO.

“Our growth was driven by our retail and international businesses, and the contribution from our Skip Hop brand which was acquired earlier this year,” he added. “Given the strength of our fall and holiday product offerings, we’re forecasting good growth in the second half and expect to achieve our growth objectives this year.”

For the remainder of fiscal 2017, the company projects net sales to increase approximately 4% to 6% compared to fiscal 2016, and adjusted earnings per diluted share to increase approximately 8% to 10%. This is compared to $5.14 in fiscal 2016. This forecast for fiscal 2017 adjusted earnings per diluted share excludes anticipated expenses of approximately $2.5 million related to acquisitions, and approximately $0.3 million related to the company's direct sourcing initiative, which includes severance and relocation costs.


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Celebrating Excellence




Design: Burdifilek, Toronto

A premium brand born from the celebration of colder climates, Mackage (Yorkdale Shopping Centre, Toronto) received Store of the Year honors in the Retail Design Institute’s 46th annual International Store Design Competition.

Designed by Toronto-based Burdifilek, Mackage was awarded for overall concept and innovation in lighting design. The collaboration between Burdifilek and Mackage drew inspiration from the urban sensibility of a modern ski chalet, with the environment offering a calm respite from the traditional harried shopping experience.

The 2,600-sq.-ft. space reflects the sexy, modern edge of the Mackage brand, which, after gaining a cult following for its outerwear, has evolved into a premium lifestyle brand. An architectural approach to lighting was used to highlight the product offering, directed around the perimeter, and focused on product zones. The rest of the space received a neutral wash of ambiance lighting.

Subtle sculptural references to snow, ice and nature are expressed in noble materials resembling a warm cocoon from the elements. From the backlit image of the Rocky Mountains to the iceberg-shaped service counter, the environment brings forth notions of nature, winter and the landscape.

Penguin Shop


Design: figure3, Toronto

A kiosk-size space – 158 sq. ft. – is home to the first-ever permanent Penguin Shop. Located in the lobby of the book publisher’s Canadian headquarters, the flexible space is designed to foster a sense of discovery, wonder and visual delight. Magnetic book spines are mounted on rolling pantry-style storage which can be easily switched out to re-brand the shop around key marketing themes.

Bergdorf Goodman

New York City

Design: MNA, New York City; Bergdorf Goodman, New York City

The ground floor of Bergdorf Goodman is transformed with an updated, fresh look that also relates to the brand’s storied past and reinforces its luxury brand DNA. The design creates new contemporary areas and a jewelry salon suite, and is marked by highly customized materials and fixturing, and a stylistic echoing of French design of the 1920s and 1930s.

Sport Chek


Design: Stoever Jones Design, Calgary, Alberta; Ruscio Studio Inc., Montreal

A standard fleet store has been remade into a 44,000-sq.-ft., two-level flagship offering an experiential shopping experience that takes Sport Chek to the next level. Shoppers walk through a state-of-the art curved LED digital “tunnel” entrance into an immersive environment in which animation, interaction and show-stopping installations are all tied together.


Palo Alto, California

Design: Starbucks Coffee Co., Seattle; ArcVision, St. Louis

Teavana demystifies the tea experience and appeals to seasoned and new customers with an interactive and immersive experience. Customers are encouraged to taste, smell and experience tea to discover their perfect blend or flavor. The warm, but neutral wood palette allows the colors of the tea and packaging to shine.



Design: Burdifilek, Toronto

A new brand makes its debut with a design that elevates the sophistication of the modern pizzeria. Masseria takes its design cues from the rich history of Italian culture, specifically the country’s 1950s and ‘60s “dolce vita” period. The entire space is open, even the food preparation is showcased to illustrate the transparency and quality of the brand’s ingredients.

Desjardins Signature Service


Design: Ædifica, Montreal

Serving the affluent clientele of financial cooperative Desjardins Group, Desjardins Signature Service is a prestigious and distinctive space with a sophisticated atmosphere. The design offers a smooth progression from public foyer to semi-private spaces to ensure confidentiality as the customer moves through the consulting/ engagement process. Visitors are welcomed and invited to meet advisors in private offices/consulting pods or meeting rooms. The overall look and feel reflects an elegant yet modern environment focusing on delivering a high-end experience.


Pointe-Claire, Quebec

Design: Ædifica, Montreal

Online eyewear designer and retailer BonLook’s first physical store offers an inviting and welcoming environment that feels more like being in a lounge rather than in a store. The minimalist layout has floor-to-ceiling mirrored walls that offer multiple benefits: Customers never have to look for a spot to try on frames. Mirrors reflect and enhance the models on display, and the small space appears larger than it is. There is no cash counter. Customers carry out their transactions online.

Desjardins (mobile branch)


Design: Ædifica, Montreal

The first mobile branch for Desjardins Group, a leading cooperative financial group in Canada, is designed as an extension of the branch network. It offers all the financial services of a branch – only in a 39-foot bus. Wood textured floors, soft seating and warm colors make the space human, accessible and welcoming.


New York City

Design: Fitch, Columbus, Ohio

Pirch provides a new, experiential way to buy kitchen, bath and outdoor products, with a design that combines 30 working vignettes with hands-on “labs” and expertise in a supportive, urban context. Customers can cook side by side with in-house chefs, experience showers/spa or fire up the grill. The space is designed with modern, elegant residential aesthetic that puts customers at ease.

B&B Italia

New York City

Design: Antonio Citterio Patricia VIel Interiors, Milan

A “black box” store design serves to accentuate the B&B Italian and Maxalto furniture collections. Reflective false ceilings create an increased sense of the space, and large backlit images and adjustable metal mesh dividing elements further accentuate the store. The various areas while connected to one another, offer a neat well-defined interpretation, with the purpose of creating sets that suggest atmospheres, inspirations and emotions, rather than articulating the space into traditional rooms.

Silver Deer

Mexico City

Design: Materia Groupo Forma Arquitectos, Mexico City

Silver Deer redefines its identity with a new design that positions it among the most prestigious men’s clothing stores in the world. The branding creates an identity and place for the Silver Deer man: refined, living in the present and the embodiment of tradition and craft. The use of wood, marble and exposed brick are accentuated by a continuous black granite horizon line around the perimeter. The design uses materials exemplifying a contemporary expression, combined with a character of craftsmanship.



Design: Burdifilek, Toronto

Canada’s largest bookstore chain debuts a new concept that keeps books at the heart and soul of the experience, but compartmentalizes the space into several core categories. The design cross-pollinates books with product in areas that include Room Of Her Own, Joy of the Table and At Home, creating a richer narrative for the books in the category.

Hickey Freeman

New York City

Design: Two One Two Design, New York City; R H Sweers Architect

Hickey Freeman’s new made-to-measure format is designed as a destination retail experience. A floor-to-ceiling fabric bolt wall highlights the bespoke program, serving as a visual icon of the brand. It’s also functional, with 160 bolts of fabric for the customer to view, feel and drape. The minimalist interior speaks to the new generation of smart dressers, while the luxe materials and sophisticated details provide a nod to the tradition of men’s tailored clothing.

Cadillac House

New York City

Design: Gensler, New York City

Cadillac’s historic relocation of its headquarters to New York City marks a new era for the iconic automaker. An experiential brand center on the ground floor is designed to serve as a brand beacon for Cadillac, while remaining flexible enough to support a broad array of events and partnerships. A central colonnade, built on the foundations of the original architecture and inspired by the design of a vehicle “runway,” serves as a flexible stage for partnerships and events the brand supports.

Brothers Marketplace

Weston, Mass.

Design: BDHP Architecture, Cincinnati

Brothers Marketplace highlights the concepts of local, community, and curation in a rich and inviting gourmet marketplace that emphasizes locally sourced foods and products. The 9,000-sq.-ft. grocery store is designed to highlight unique attributes of the history and heritage of the town and deliver on the brand promise: “Eat. Drink. Be…Local.” The graphic elements work together to emphasize qualities and amenities that are unique to the store’s Weston location and history.


Temecula, Calif.

Design: Retail Habitats, San Diego

A rustic aesthetic underscores the “farm to table” nature of the overall merchandise mix at Cheflavor, a new gourmet food store brand. The flexible and inviting space allows the retailer to respond to seasonal and thematic merchandising plans and support ancillary functions, such as cooking demonstrations. The use of the building’s existing architectural features pays homage to its historic nature and also appeals to the tastes of the local community.

Best Buy Tech Home

Bloomington, Minn.

Design: Chandler Inc., Afton, Minn.

Best Buy created a temporary home-like structure at Mall of America that allowed customers to view, engage with and purchase smart-tech devices and gain a greater understanding of how connected devices function in different rooms of a home. From a cedar deck with planters to a fully furnished kitchen, a comfortable and relaxing at-home feel was important to the design process. Over 40 products were featured within the 2,460-sq.-ft. structure.

Yu Seafood

Richmond Hill, Ontario

Design: dialogue 38, Toronto

Serving upscale Chinese cuisine, Yu Seafood aims to provide a noble, customer-focused dining experience, with an elegant, sophisticated atmosphere. The two-level, 15,000-sq.-ft. space is divided into four zones defined by distinct designs and linked by dramatic transitional hallways. Individually framed traditional landscape paintings, carefully selected objects and exquisite materials bring the environment to the next level.

August 8

Brampton, Ontario

Design: dialogue 38, Toronto

Traditional Asian elements are given a retro twist in the renovation (and expansion) of August 8. The design provides a warm, comfortable dining experience while adding a visual excitement that appeals to a neighborhood demographic of students and families. Its modern fusion cuisine is well communicated throughout the space, which balances simplicity with bold layers of color and materiality.

The Clinic


Design: JGA, Southfield, Mich.

The Clinic sets the standard for the medical and recreational cannabis industry with an interior design strategy that delivers a premium, tailored experience new to the market. The distinctive environment brings together a variety of elements, from materials and finishes to the use of space planning, that balance the “new frontier” characteristics of this burgeoning retail segment.

Rent The Runway

New York City

Design: Heitler Houstoun Architects, New York City

Rent The Runway’s 6,000-sq.-ft. flagship is designed to serve as the physical embodiment of the online brand’s promise, which involves the aspirational fantasy of getting dressed up and access to infinite options. The layout was conceived around the central merchandise area, or Dream Closet, with all other areas immediately adjacent. This allows for all functions (service, fitting and styling) to continuously access the inventory at the heart of the store.

Saks Food Hall by Pusateri’s


Design: GH+A design studios, Montreal

Saks Fifth Avenue at Sherway Gardens enters the food sector, partnering with Toronto grocer Pusateri’s to open an 18,500-sq.-ft. gourmet food hall with a luxe market atmosphere. The layout is inspired by the traditional European food hall. Culinary stations are meshed throughout the space, creating a dynamic interplay of traditional shopping aisles with specialty stations. Departments are delineated with ceiling archways as a succession of arcades, recalling classic arcade architecture.

Interceramic Tile & Stone Gallery


Design: CallisonRTKL, Seattle

This 14,659-sq.-ft. showroom offers a full-service experience where customers can interact with products, view installations and work with experts to create custom interiors. Large-format tile wall panels, or “paintings,” create a studio experience, enabling the consumer to break away from conventional tile selection. Warm finishes and diverse textures serve as backdrops to highlight and complement the tile.

La Sirena

New York City

Design: TPG Architecture, New York City

A new destination restaurant at the Maritime Hotel, La Sirena blends the mid-century mod vibe of the legendary hotel with contemporary Mediterranean flavor. Glass doors open to the patio across the full length of the 38-foot bar and dining rooms, evoking a traditional Italian loggia and easing the transition from the bustle of the city to the haven within. During breakfast and lunch, light streams in, enhancing a outdoor connection.

Vision Source

Kingwood, Tenn.

Design: RetailOne, Atlanta

Vision Source updates its experience with a design that leverages every touchpoint to encourage more personalized service. A strong communications hierarchy guides customers, leveraging digital media at every point. Custom wallpaper features a play on the “tumbling E” eye chart combined with a prismatic pattern to create a uniquely branded graphic tool. This pattern’s elements are used as a unifying design language throughout in transparent acrylic backers, sliding doors and custom laminates.

Herman Miller

New York City

Design: Herman Miller; Vincent Bandy Architect, New York City

Herman Miller continues its transformation from a B2B enterprise into a premium lifestyle company with the opening of its first retail store in North America. The 6,000-sq.- ft. space is designed to reinforce Herman Miller’s leadership in design and communicate its warm, human, and personal take on modernism, demonstrating how the brand can be incorporated into all aspects of modern life. New Herman Miller designs are paired with the brand’s iconic pieces and layered with objects and accessories.

Calgary Co-op

Calgary, Alberta

Design: Shikatani Lacroix, Toronto

Calgary Co-op celebrated its 60th anniversary by debuting a new, contemporary and distinctive store design – one that makes it look and feel more interesting than its competitors. Playful graphics and language highlight the brand’s key attributes of fun, local, approachable, vibrant and fresh. The layout is easy to navigate, with lower gondolas that allow for expansive sight-lines and ease of shopping. Customers are drawn in by the vibrant produce area and then enticed to explore the added-value offerings.

Saks Fifth Avenue


Design: FRCH Design Worldwide, Cincinnati

Saks Fifth Avenue’s Toronto flagship offers a gallery-like environment where furniture and fixtures act as artistic objects. The 123,000-sq.-ft. space is beautiful, luxurious and light-filled, and draws inspiration from Toronto’s natural and artistic local heritage. On all levels, the store reflects an international, contemporary style with an elegant manner and artistic attitude that has been consistent theme in Saks stores since the early 1900s.

East Izakaya

St. Catharines, Ontario

Design: dialogue 38, Toronto

This new upscale Japanese restaurant offers patrons a contemporary environment blends the old and the new. Exposed brick walls, raw steel panels, and the use of decorative metal ceiling tiles bring out a sense of antiquity and rustic charm, which is translated into modern Japanese language. Customers are welcomed by a long communal table made with solid wood, lit by custom metal mesh pendant lights. These elements act as a runway for the art piece on the back wall – Japanese hand-painted brushstrokes, encaged in a metal grid.



Design: Nordstrom Store Design, Seattle; CallisonRTKL, Seattle

From the textural softness of the materials to the dramatic merchandise displays and open floor plan, every aspect of Nordstrom at Yorkdale Shopping Centre is carefully choreographed to create an engaging and embracing experience that draws customers in. Floor-to-ceiling windows add dynamic energy to the 199,000-sq.-ft. space, while the store’s natural palette delivers a luxurious yet approachable backdrop that fits well within the shopping center’s overall context. The store is designed to create a sense of discovery, allowing customers to navigate easily and to find new brands they haven’t experienced before.



Do you think retail brands should steer clear of taking a stance on social and political issues?