Beg Borrow or Steal December 31, 2008

WHAT’S HAPPENING

• When the going gets tough, the tough dicker for a better price. Consumers are beginning to embrace a range of unusual buying behaviors that will help them stretch a dollar further. Haggling, for example, is becoming fashionable again. Max Edison has become a minor media star — his 2001 book How to Haggle is on back order at Amazon.
• Why own when sharing or renting will do? Even in boom times, we noted the rise of fractional ownership, especially of prestige luxury items. Now that strategy is being applied to commuter cars, condos and even community department stores.
• We’ve mentioned that the mushy core of this economic swamp is the housing bubble. Through services like YouWalkAway.com, consumers can do just that legally and in a way that controls the damage done to their credit (NYTimes.com 2.29.08). They can approach home ownership less like marriage and more like dating. And why wouldn’t they? The annual average cost of renting is now lower than owning: $15,721 compared to $17,707 (Washington Post 11.25.07).
• Even before the economic downturn, “transparent recycling” was coming into fashion. While most Americans are not going to become freegans, digging through restaurant compost for their next meal, they are going to think twice about throwing out that old sofa.
• Another area where consumers are trading down in a big way: personal transportation. While car sales languish coast-to-coast, bicycle sales are actually up nearly 10%, and Shimano — the world’s largest bike parts manufacturer — set a new sales record in 2007 (BicycleRetailer.com 2.25.08).
• Five finger discount? A number of national chains report that shoplifting and employee theft are up significantly — as much as 11% in some areas (HometownAnnapolis.com 3.24.08). Not every consumer will throw her morals out the window with every dip in the Dow Jones. But thieves are finding more willing markets for hot, cheap goods.
• A penny saved is a penny earned. Yes, Americans seem to be dabbling in that most extreme and alien form of economic behavior: saving the old-fashioned way. Sixty percent of Boomers say they are spending less in the current economy (FOXBusiness.com 2.12.08).

WHAT THIS MEANS TO BUSINESS

• In tough economic times, smart marketers want to know what consumers are buying. But it pays to look at how consumers are buying.
• Don’t expect a sudden full-stop in discretionary spending. Do expect a certain amount of trading down, and higher levels of skepticism about what “luxury” and “prestige” really mean as value propositions.
• We’ve tracked the emergence of consumer interest in “überobscure” goods and services. That will amp up in coming months, especially where obscurity equals savings. Treasure hunting at pawnshops and garage sales could be almost as popular as the Olympics in Summer 2008.
• We’re talking about a fundamental shift into active, intentional, highly targeted consumerism. Consumers know the economy’s health rests with them. They know companies are hurting for business. They know their dollar can go further when they flex their muscles of free choice.
• Watch as consumers take a somewhat aloof approach in their buying behavior. You can’t haggle if you’re too enthralled with any particular item. Even “gotta have its” will be subject to price comparisons and value assessments.

Retail Leases Under Pressure December 30, 2008

NEW YORK — Retail lease disposition is showing signs of distress in this downtrodden economy. A record 8,000 to 9,000 leases have become available for distribution as a result of bankruptcies, liquidations and downsizings.

With more retail bankruptcies anticipated in the new year, available square footage is expected to grow exponentially. And with few retailers in expansion mode, there may be lots of dark spaces in shopping malls, strip centers and power centers.

Circuit City, which was to hold an auction of 154 leases this week, canceled the auction due to a lack of bidders. The retailer, which filed Chapter 11, hopes to reject the leases in bankruptcy court.

Mervyns, which was liquidated, had 150 leases up for sale. In sounder financial times, experts said the leases collectively could have fetched $50 million to $100 million. Only 46 Mervyns leases found takers for a total of $6.2 million.

Even healthy retailers are using the distressed economy to try to get rent reductions. “A retailer doesn’t have to be in bankruptcy,” said Ivan L. Friedman, president and chief executive officer of RCS Real Estate Advisors, which helps retailers evaluate their real estate portfolios, shed underperforming stores and trim occupancy costs. “Retailers are not renewing leases that they can’t get great rent relief on.”

RCS is marketing 165 leases belonging to the bankrupt Steve & Barry’s. “We are getting a few calls on [the leases],” Friedman said. “I don’t know what’s going to happen to them. In good times we could sell lots and lots of leases. Now, everyone is preserving cash. You’ve got no buyers.”

RCS has doubled or tripled its client base this year, Friedman said. “This is not a good time for anybody. I get 15 to 20 calls a day from retailers with companies that do $200 million in sales and up. Everybody says, ‘I need rent relief’ or ‘I want to get out of leases.’”

Andy Grasier, co-chief executive officer of DMJ Realty, said, “Generally when a space went back to a landlord it would get leased up within a year. It’s probably going to take longer to fill some of these vacancies than ever before. Landlords will allow some discounters that they normally wouldn’t have allowed into their centers. They’re going to try everything, churches, health-related services and schools. There’s going to be a lot of alternative uses. This is a fairly new phenomenon.”

Power centers may have trouble finding large tenants to replace big box pads. In some cases, the boxes are too big to subdivide. “Some of these power centers are going to rely on less occupancy from the nationals and will start focusing their efforts on some of the regional players,” Grasier said.  

“Landlords are being as flexible as humanly possible,” Grasier said. “It’s no secret that there’s little or no growth.”

Friedman also finds that “landlords are being very cooperative in reducing rents. I’ve done deals where I’ve reduced rents by up to 50 percent. A 20 percent to 30 percent decrease in rent for B, C and D malls is not unusual. Right now it is very much a restructuring environment.”

The glut of retail space can’t only be blamed on the economy. For years, retail experts have said that the country is overstored, but the industry for the most part ignored the warnings. Now, the problem of too much retail square footage has come home to roost. “The bottom line is that we were overstored for several years and that was during the good times,” Grasier said. “We’re in a very overstored situation.”
WWD

Shoppers haggle for deals from frantic retailers December 29, 2008

I found this recent MSNBC article very interesting.  Now I’m kind of bummed I didn’t ask for any better deals- especially since one quote from the article is “You would have to be a moron not to ask for a discount!”  Ouch… oh well, this MORON only shops online- so it’s kind of hard to ask someone on ebay to discount their 2 year old camera I “won”!  Merry Christmas Eve!!!  Here are a few highlights from the article.  To view the entire article click here.

With holiday sales possibly the worst since the industry began annual comparisons in 1969, stores are increasingly willing to do whatever they can to get rid of merchandise — even offering discounts on the spot.

NEW YORK – If you’re looking for an extra bargain before the holidays, you may only have to ask. With holiday sales shaping up to be the lowest in years, possibly the worst since the industry began annual comparisons in 1969, retailers say they’re taking consumers’ demands for good deals seriously. Some are extending return policies, while others are matching competitors’ prices. Many are volunteering on-the-spot discounts and even letting customers haggle prices well down from what’s marked in a desperate bid to make the cash register ring.

Allen Chen, a part-time cashier at a J. Crew store in White Plains, N.Y., said shoppers with two-month-old receipts are asking for partial refunds for items now on sale. Normally, the store’s policy is to refund the difference between an item’s purchase price and a later sale price only if it goes on sale within seven days of the purchase.

“When I tell them it is past the seven-day policy, they tell me that they will just return it and re-buy it” at the sale price, he said, adding that his store managers are now allowing customers to do so most of the time.

Shoppers are also being far more savvy about asking retailers to match a competitor’s lower price.

While shopping for Blu-ray discs at a Los Angeles Best Buy, Luis Levy used his cell phone to check the price at nearby competitors. Each disc was $10 cheaper at Circuit City or Wal-Mart. Best Buy matched the lower prices.

Diana Thang, manager of Grace Jewelers near San Francisco’s Union Square, said she and her staff are bargaining more than she ever has in two-plus decades in the business. But it’s not working wonders.

“They have a budget,” Thang said of most customers this season. “We give a low, low price and they still can’t accept it. They’re looking at more than $1,000 stuff, and they want to spend $200 or $300.”

With sales slow at virtually all retailers, experts say customers now have the upper hand. And even some who don’t explicitly ask for a discount or price-match are pressing for better deals.

“You’d have to be a moron not to ask for a discount,” said Stephen Hoch, a retailing expert at the Wharton School at the University of Pennsylvania.

More and more consumers are doing just that, treating a trip to the mall like a visit to the used car lot.

Bluefly helps shoppers dress like a Gossip Girl December 23, 2008

WHAT’S HAPPENING

What would Serena wear? Bluefly is taking a guess with its Haute Gossip e-shop — helping customers dress like their favorite Gossip Girl characters. Why? As the retailer says, “There’s more than just skeletons in [the characters'] closets.” Like taking a peek into their hypothetical high-society walk-in wardrobes, Haute Gossip compiles the apparel and accessories that Nate, Serena, Chuck, Blair, Dan and Jenny might wear. Haute Gossip stays true to the teens’ on-screen style: Jenny likes lesser-known labels, Blair’s got lots of bling and Chuck’s closet is packed with argyle and ties. WHAT THIS MEANS TO BUSINESS We’ve come a long way since the days of Sex and the City when clotheshorses were on their own to find apparel that reflected their favorite character’s look. Now consumers want immediate access to constructing a closet that imitates the ensembles of their fashion icons.

Iconoculture

Retailers Get Holiday Reality Check… December 23, 2008

There’s no bailout for retailers this holiday season.

Despite slashing prices and extending hours, stores appear to be giving in to reality with just two days left before Christmas. The traditional late surge of shopping is nonexistent because of the deepening recession, which is likely to make this season the worst in memory.
Even with schools and many consumers on vacation, merchants are holding out little hope of recouping lost ground.

“It’s really bad,” said Crawford Brock, owner of the luxury Stanley Korshak boutique in Dallas. “Everybody’s discounting, so the margins are terrible and sales are strong double-digit down with no real bright spots. It’s just miserable….I don’t think it will be better until the fourth quarter” of 2009.

Stanley Korshak sells to affluent customers, but this season even the well-off don’t think it’s fashionable to make expensive and multiple purchases. “They are getting each other one gift or maybe a stocking stuffer,” Brock said. “Nobody’s doing the big Christmas. Everybody is terrified.”

That goes for the moderate market, as well. “Results were disappointing during the critical week before Christmas,” said Keith Fulsher, executive vice president and chief merchandising officer of Dress Barn. “The weather [snowstorms during the weekend] has definitely not played in our favor. We continue to focus on managing our inventories. A few highlights however, are our social special occasion dresses, as well as career and casual jackets.”

At the Maurices division of Dress Barn, Lisa Rhodes, executive vice president and chief merchandising officer, acknowledged difficult business, though she added that embellished dressy tops and novelty screen tees in sizes 1-24, remain bestsellers in the tough environment.

“We are probably off, but I haven’t looked at the figures — I’d rather not know,” said Connie Sigel, owner of Elements boutique in Dallas. “I have to say this much, I knew this was coming in March — Bear Stearns’ [demise] was a big wake-up call — so I cut back on my buy about 30 percent, so that helped tremendously.”

The economic nosedive has “taken the thrill out of shopping because everybody feels bad for everyone else,” she said. “But most everyone has taken a hit in their portfolios, so everybody feels poor no matter how rich they are.”

WWD

Smart Girls party on in a new web series December 19, 2008

WHAT’S HAPPENING

• Forget mean girls. Smart girls are the real queen bees. Ambitious, creative and all-around brainy chicks are the stars of fellow smarty-pants Amy Poehler’s new web series, Smart Girls at the Party.
• The show features tween girls “making a difference by being themselves.” The first episode features Cameron King, a budding mystery writer. The 10-year-old walks viewers through her storytelling process while Poehler keeps it light with questions like, “When you get writer’s block, do you flip over a table like I do?”
• And who’s sponsoring the party? None other than Barbie, featured prominently on the Smart Girls landing page.

WHAT THIS MEANS TO BUSINESS

• The newest generation of girls is a confident, can-do force ready to show off their creative chops — and welcoming new platforms with which to do it.
• Early feedback on the series has been overwhelmingly positive, though some have questioned the Barbie tie-in: “It’s tough to stomach pop-up ads for … a toy that basically represents an impossible image for young girls while you’re watching a show that so gracefully strives to do the opposite,” says Jezebel.com blogger Hortense (11.15.08).

Iconoculture

A vision to remake the mall… December 18, 2008

When Architect Daniel Libeskind won the assignment to design the Westside Shopping and Leisure Centre in Bern, Switzerland, his objective was made quite clear. “Do something beyond the box on the highway made of cheap tin,” Libeskind said, describing the challenge presented by the owner Migros, the large Swiss company operating supermarkets, department stores and other retail formats.

 

“Shopping, leisure, retail, hotels — Westside is a whole complex,” he said. “Why shouldn’t that have the same degree of architectural attention as a museum or a civic building? Since people use it everyday, it’s probably even more important. This was not just a one-off.” During an interview at his offices in Lower Manhattan, Libeskind, 62, said he took inspiration from a somewhat unusual source in designing Westside. His point of reference was “The Big Store” a Marx Brothers movie that was made in 1941. “They actually move into a store, like a Macy’s, after the store closes,” he said. “They start using the beds, the kitchen. I thought this is the right idea. That people should live there. It shouldn’t be just an abstract experience. People should own it — emotionally, intellectually. They should feel this is their home.”

With America’s malls losing shopper traffic and typically perceived as sterile, new perspectives are needed, even from someone who takes inspiration from offbeat sources and was long an outsider to the industry. Libeskind has an international reputation for creating celebrated buildings, including the Jewish Museums in Berlin and Copenhagen, the Denver Art Museum, the Royal Ontario Museum, the Ascent residential high-rise in Covington, Ky., and skyscrapers and other commercial and residential projects around the world.

In 2003, he won the competition for the master plan to rebuild the World Trade Center site and is credited with naming a key structure, the Freedom Tower. The 1.5 million-square-foot, $400 million Westside, which opened last month, was his first mall project. Libeskind’s second is the 500,000-square-foot retail, entertainment and dining complex known as The Crystals, inside the huge $9 billion MGM Mirage City

Although Americans might refer to Westside as a mixed-use facility, Libeskind described it as it “a new organic whole.…It’s not a solitary, one-dimensional mass. My idea was to transform the idea of the formula of the shopping center. I didn’t tamper with the formula for making money. This is a huge potential in really focusing on public spaces. Where people walk, where people move, where they have dinner.”

The architect wanted to create a composition that was more of “a place to be and stay — not just where you go shopping and go back home….It’s really an urban complement to the richness of Bern,” the capital of Switzerland. “It’s in the countryside. I made it so it would be synergistic to the traditions of Bern — the arcades, the famous clock tower. But in new spaces, with a new scale of activity.…It’s to make you think, my god, I have arrived at a museum or a great cultural institution. That’s the point. Just as much as my clients in museums want them to be commercially successful, so do commercial clients want to bring a cultural component.

 The people who come there aren’t coming for the architecture. They are coming for the experience and the experience is the wide number of offerings. They are coming to shop. To eat. To see the movies. “But I think architecture is a huge component of making people want to come somewhere,” he explained. “They don’t want a corridor with some shops on both sides and some marble glistening. They want the same experience walking the streets of Bern. It’s intricate. It’s complex. I wanted to make Westside very intimate. I didn’t want to waste space.

 Libeskind’s projects are detailed in a book, with The New Yorker’s architecture critic Paul Goldberger, released last week, called “Counterpoint: Daniel Libeskind” (The Monacelli Press). In it, Libeskind even cites “The Big Store” for affi rming what he tries to convey in his projects: “That life is the unexpected crossroads of possibilities.”

More of this article and other great articles can be found in WWD’s ICSC Preview Section II.

 

 

 

E-Commerce Holding Steady With Incentives December 17, 2008

I tried to shorten this article- but it was so great  I kept most of it!  Enjoy!!!

From Amazon to Yahoo, the e-commerce industry — largely based in the West — has been resilient during one of retailing’s darkest hours, with a mix of discounts, customer service upgrades, shipping deals and enhanced assortments.

Although not immune from recession fallout, online retailing has the advantage of a clientele that remains relatively affluent, as well as enhanced convenience and service and competitive pricing, experts said.

“The value of what online presents is being magnified at a time like this,” said Patti Freeman Evans, vice president and research director at Forrester Research, which has projected Web sales growth of 12 percent this year “When things get bad, deep and long from a recessionary perspective, nobody is on the sidelines. However, because the online customer is more affluent, because it is still a bit of a new market and because of the benefits of shopping online are so directly aligned with peoples’ needs right now, you see a little extra life.”

The major e-commerce players, including Amazon, eBay, Yahoo Shopping and even wal-mart.com, are predominantly run out of Northern California and are significant drivers of the state’s economy, which is sagging under a budget deficit that might reach as much as $41.8 billion in the next 18 months, rising unemployment, falling home values and declining consumer spending.

Pure e-commerce, online components of traditional retailers and online auction companies in the U.S. employed more than 381,000 people last year and generated $171.2 billion in revenues, according to research firm IBISWorld.  To be sure, major sites such as eBay and Yahoo have slashed jobs and seen their stock prices fall. Yahoo’s stock price fell to $13.36 on Tuesday from $23.04 on Dec. 17 last year, and eBay shares have tumbled to $15.17 from $31.89 during the same period.

Online holiday sales, however, are edging up even as the National Retail Federation predicted traditional retail will crawl 2.2 percent ahead of last year and deep discounts seem to be doing little to goad shoppers into opening their wallets wide.

Market research firm comScore reported that e-tail sales increased 15 percent on Cyber Monday, the kickoff to online holiday shopping on Dec. 1, to $846 million, and rose 3 percent from Dec. 1 to Dec. 12 to almost $8.3 billion, although sales turn flat when extending the period to Nov. 1. Results from the first half of this week could boost the figures because it is expected to be one of the heaviest stretches of online shopping this year.

Overall, e-tailers known for their value have fared better than their online higher-end counterparts. Traditional retailers have entered the online deals territory this holiday season with aggressive markdowns that may have siphoned off some consumers less accustomed to the Web and drawn to the immediate gratification of store shopping, said Patrick Byrne, ceo of Overstock, based in Salt Lake City. “We are in a very competitive environment — more than we have ever seen,” he said. “Word on the street was that the good deals this year were in brick-and-mortar. We are hunkering down in the bomb shelter to withstand the radioactive plume overhead.”

In an online environment flooded by discounts and shipping promotions, those offers alone don’t distinguish one e-tailer from another. That’s where customer service and selection comes in. Many online retailers have sought a broader pool of consumers by expanding their assortments. Seattle-based Avelle added watches this year; Gap Inc.-owned online accessory site Piperlime is offering handbags for the first time, and Skymall.com expanded its holiday selection to 15,000 items from 7,000.

More generally, online retailers have been enlarging their apparel and accessories collections, the fastest-growing product category tracked by comScore during the Dec. 1 to Dec. 12 period with a 21 percent increase.

Overstock’s Byrne said the closeout destination’s selection of apparel and jewelry is larger than in past years. “That is turning into a very nice category for us,” he said. “It is second tier, but it is close to being first tier.” The sour economy has been a boon to Overstock’s selection as manufacturers need to off-load merchandise. “We are getting calls from manufacturers that wouldn’t even return our calls two years ago,” Byrne said.

At Yahoo Shopping, apparel became the number-one search category this year after eight years of consumer electronics’ dominance. At PriceGrabber, president Ron LaPierre reported that searches of women’s skirts and dress suits were up 227 percent year-over-year, women’s overalls and jumpsuits increased 129 percent, and women’s boots were 31 percent higher. “It is practical stuff,” said LaPierre of the apparel pieces that PriceGrabber users are looking for this season.

Yahoo Shopping’s Hintz, who singled out Ugg boots in particular as a frequently searched item, said shipping offers and simpler returns, abetted by providing return labels and packaging, have contributed to the mounting popularity of apparel online. Apparel’s online growth could also be a consequence of more women, who have historically followed men on technological adoption, migrating online.

The impact of customer service programs on revenue are difficult to quantify, but that hasn’t stopped online retailers from pursuing better service. Avelle, operator of online rental service Bag Borrow or Steal, brought its customer service in-house this year and ceo Michael Smith said that is partly responsible for the company’s largest jump in return customers in November since its 2004 founding.

“The customer service piece is something that we have always believed strongly in,” Smith said. “We all come from places like Nordstrom and Lands’ End. We wanted to get closer to the customer, and we feel that with doing it ourselves we can provide better service.”

Online firms have aided shopping with reviews, as well. A Shop.org survey found that about one-third of online retailers added product reviews this year. SkyMall.com and costco.com, which launched product reviews this year, have discovered they are valuable tools to get feedback about online customer service. “Anything that has to do with tailoring the experience to you as you shop — we are seeing nice results from. We are looking at how to leverage that,” said Christine Aguilera, ceo of Phoenix-based SkyMall.

Despite attempts to improve customer service, online satisfaction has slipped this holiday shopping season. According to ForeSee Results, which measures online customer service satisfaction, that metric was down 0.91 percent to 76.6 on Cyber Monday, 0.93 percent to 76.3 from Dec. 1 to Dec. 7, and 3.09 percent to 75.2 from Dec. 8 to Dec. 14.

Larry Freed, president and ceo of ForeSee Results, expected the lower figures given the economic climate. “I’ve still remained cautiously optimistic,” he said, while admitting the drops are “starting to look a little worrisome.”

Online customer service and selection improvements are not just about short-term gains. Freeman Evans of Forrester Research estimated that new online buyers, a group that is dwindling as Internet use proliferates, will account for one-third of holiday sales this year. Pleasing new and longer-term clientele could generate loyalty as returning customers become more critical in a maturing online environment where new customers get rarer. IBISWorld’s senior analyst George Van Horn predicated that e-commerce growth rates will be in the 8 percent range in the next few years, versus 20 to 25 percent in its formative years and 12 to 14 percent from 2004 to 2007.

“We will see more efforts toward long-term relationship development” as online retailers mature, said Freeman Evans. Overstock already has plans to retool its loyalty program, called Club O, in the first quarter to enhance its customer relationships.

Online players are keenly aware that the impression they make this holiday season, during which consumers are focused on value, could affect their performance down the line — a by-product of online shopping satisfaction isn’t obvious in holiday financials.

“We have always believed that good companies gain market share in down economies,” said Ginnie Roeglin, senior vice president e-commerce and publishing at Issaquah, Wash.-based Costco, “We are trying to make sure we are the best value in the market and at a time like this, when people are paying attention to that, I think you do capture market share.”

WWD

What comes after menopause? December 16, 2008

WHAT’S HAPPENING

• Cause — and pause — for mass celebration, The Secret Pleasures of Menopause encourages women over 50 to fully embrace menopause as the beginning of a new period of sexuality and sensuality.
• In a message that is part Goddess^SM and part Health Monitor,^SM doctor and author Dr. Christiane Northrup guides women on ways to maintain and enhance their sexual lifestyle by knocking down all conventional views associated with menopause and intimacy.
• Dr. Northrup has also authored bestsellers Women’s Bodies, Women’s Wisdom and The Wisdom of Menopause.

WHAT THIS MEANS TO BUSINESS

• The power of positive menopausal thinking has become infectious as women embrace and actively fulfill their passion points and personal potential.
• Women are actively pursuing ways to maximize their physical and emotional wellbeing. A resource that helps promote openness and the importance of sexual health is not only liberating, it’s empowering.

Iconoculture

Wholesale Apparel Prices Inch Up 0.2 Percent December 16, 2008

Wholesale prices for domestically made apparel increased 0.2 percent in November from the previous month, and rose 0.9 percent year-over-year, the Labor Department said Friday in its Producer Price Index.

Prices for women’s and girls’ apparel rose 0.2 percent last month, and were flat compared with last year.  Prices for all goods manufactured in the U.S. fell 2.2 percent in November, the second consecutive month of falling numbers. The decline was driven primarily by lower energy prices. Along with energy, the overall domestic price index has declined, a trend that is expected to work its way through the pipeline to other goods if fuel and commodity costs continue to go down, said Patrick Newport, U.S. economist for Global Insight.

There is concern that falling prices could fuel a deflationary cycle. In apparel, the PPI is not a true indicator of price fluctuations, since only a small percentage of goods are made in the U.S. “Although deflationary prices outside the energy sector did not appear to be widespread in November, the evidence is that those pressures are worsening rapidly further down the pipeline and could be felt in coming months if supplies continue to outstrip demand,” said Charles McMillion, president and chief economist, MBG Information Services.- WWD