Retailing used to be an industry that ran hot and cold by sector. If specialty stores were going gangbusters one season, it was a safe bet that department stores or off-price outlets were suffering. But that’s no longer the case, according to Gilbert Harrison, chairman of Financo Inc., the well-known New York investment banking firm that specializes in retail deals.
“Individual companies can no longer ride on the coattails of a hot sector. Only performance and execution can determine success,” he told an audience at the National Retail Federation convention in New York recently.
Holiday 1997 results are a case in point. No single category outperformed the average, and specialty apparel retailers were among both the strongest and weakest performers, Harrison said. Stores with upbeat holiday stories include The Buckle, a junior apparel retailer for boys and girls that posted impressive December sales gains of 28.3 percent. Also, American Eagle Outfitters, a purveyor of casual apparel, racked up a healthy 18.8 percent increase in sales.
Those with sad tales include AnnTaylor, the women’s apparel chain where December sales declined 10.1 percent; and Paul Harris Stores, a moderate-priced women’s clothing chain that saw sales fall 8 percent.
Is there a common thread? Retailers that did well were focused on a niche customer at the high, moderate or low end of the price spectrum. And they carried exciting merchandise that offered value, Harrison said.
Sounds a lot simpler than it is.
Walking shoes: It’s good news for Florsheim Group, the Chicago-based maker and retailer of men’s footwear. But it could be bad news for Sears, Roebuck and Co.
Florsheim, which is in the process of rejuvenating itself, has cut a deal to sell its “Comfortech” comfortable shoe line in 400 J.C. Penney Co. stores around the country. The distribution channel will give Florsheim “a strong vehicle to reach a large number of consumers,” said Florsheim Chairman Charlie Campbell.
That could be a blow to Penneys’ major competitor, Sears, which has carried Florsheim shoes since 1990. Sears even has Florsheim kiosks in its footwear departments that allow customers to order out-of-stock sizes or styles directly from the manufacturer for home delivery.
Sears says it isn’t worried. “It’s not really a competitive concern, because we’re carrying a much broader range than J.C. Penney,” said Sears spokeswoman Mary Ann O’Rourke.
Shopper-tunistic: It’s a rough time to be a mall owner. Time-pressed consumers are making fewer visits, spending less time in a smaller number of stores.
So smart mall owners are fighting back. They’re trying to create loyal shopper programs that reward heavy purchasers. And instead of being scared of Internet shopping, they’re trying to use on-line technology to boost mall-related sales.
At the forefront of these efforts is Simon Brand Ventures, a new strategic marketing unit of Indianapolis-based Simon DeBartolo Group, the country’s largest operator of malls, including the Mall of America in Minnesota.
Simon DeBartolo already has launched a Mall V.I.P. Visa card that racks up “frequent buyer” points for purchases at its mall tenants. One million cardholders have signed up since the national rollout last July, and the goal is to have 10 million, said Andrew Halliday, co-president of Simon Brand Ventures.
But perhaps more creative is the company’s efforts to tie mall shoppers into the Internet. The company is testing giveaways of Microsoft’s Internet Explorer software to mall shoppers, allowing them free access to the Web. While shoppers are surfing the net, they are bombarded with continuous ads and special promotions from Simon DeBartolo mall tenants.
The setup is being tested in Laguna Hills, Calif., and should be rolled out to five Northeastern malls in March. If successful, the Internet test could reach some Chicago malls by late 1998.
