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February 12th, 2008

Starbucks goes back to school

Posted by: Alexandria Sage

By Lisa Baertlein 

Isbux.jpgs your Starbucks barista getting rusty? Has your grande latte lost its luster?
    
Fret no more.
    
On Feb. 26, Starbucks is closing its nearly 7,100 company-operated U.S. stores from 5:30 p.m. to 8:30 p.m. local time to give employees’ java know-how a jolt.
    
“As a result, baristas will be better prepared to share their passion and knowledge with customers. Customers will be able to truly enjoy the art of espresso as Starbucks baristas demonstrate their passion to pull the perfect shot, steam milk to order, and customize their favorite beverage,” recently returned Chief Executive Howard Schultz said in a “Transformation Agenda Communication” posted on Starbucks.com this week.
    
Schultz is on a mission to bring back the company’s formerly fast growth as traffic has declined amid a weakening U.S. economy and increasing competition from the likes of burger giant McDonald’s Corp.

January 17th, 2008

War and Monkeys at the ICRXchange

Posted by: Alexandria Sage

monkey.jpgAt the annual ICRXchange for consumer companies held in the beach town of Dana Point, California it’s always jarring to see buttoned-down big city analysts and fund managers look like fish out of water while schmoozing with laid-back apparel company heads in the bright sun.

But even more comical was the sight of an animated, energetic Dov Charney, chief executive and founder of trendy retailer and clothing maker American Apparel, giving an evolutionary lesson to suits and proclaiming himself to be a “monkey.”

The dinosaurs in his business, he explained to the rapt crowd assembled around him, are Hanesbrands and Fruit of the Loom, suggesting that his underwear designs are far more hip.

“I’m a monkey — and the rats are behind me,” he said, referring to those who copy his designs.

His comments prompted one fund manager to label Charney “a character,” something the controversial CEO — whose leadership at American Apparel has been marked by accusations of sexual misconduct — may well have heard before.

Also overheard at the two-day conference, Quiksilver President Bernard Mariette being asked if the company was contemplating acquisitions — this one day after the action sports apparel maker announced a bigger-than-expected quarterly loss due to its unwieldy Rossignol division, which it bought in 2005.

“You got any money?” Mariette asked to laughter all around.

Lastly, it feels like war at the ICRXchange. The requisite swag this year is an oversized camouflage backpack, which makes the attendees look like they’re shipping off for a deployment.

But maybe the battle analogy is not too far off, given the current state of retail in the United States.

(Photo: Reuters)

December 4th, 2007

Are Supermodels enough to Spice up Holiday?

Posted by: Alexandria Sage

vic1.jpgU.S. retail spending may be in a ho-hum mode, but Victoria’s Secret executives believe the holidays can be bright with sales of pajamas, impulse gifts — and a little boost from the supermodels and Spice Girls.
    
That, at least, was the message from the lingerie chain’s executives, who spoke with Reuters before Limited Brands’ recent Victoria’s Secret fashion show in Hollywood. The show, taped mid-November, will be broadcast Tuesday night on CBS.
 
“We are so very prepared for holiday. We are still optimistic,” said Sharen Turney, CEO of Victoria’s Secret, which has been hurt by low store traffic in recent months. “There’s a lot of newness that’s coming in,” Turney added.
    
Same-store sales, which measure sales at stores open at least a year, were down 6 and 7 percent in September and October, respectively, at the chain.
 
“We treat this time of year like an all-out assault, and we look at business results on a daily basis, by region, district, store,” said Ed Razek, Limited Brands’ chief marketing officer. 

Boosting publicity is the much-hyped fashion show, known for supermodels in elaborate get-ups featuring Victoria’s Secret lingerie embellished with rhinestones, feathers, beads and angels’ wings. The event costs the company $10 million but Turney said it reaps publicity “well worth over $100 million.”
 
British pop band the Spice Girls, who performed at the show, are also expected to help draw store traffic since their latest CD is presently only sold at the retailer.
    
Executives say categories of strength this year are expected to be pajamas, hoodies from the chain’s more casual Pink line, gift ideas such as panties packaged as lollipops, beauty products and Victoria’s Secret newly-launched fragrance.

But analysts foresee widespread discounting this December, as a host of competitors woo what many fear is an apathetic consumer. 
 
Razek would not share specific details, but acknowledged contingency plans for sales are “in the hopper.”
    
“Particularly this Christmas, you’ll have to offer (shoppers) value,” Razek said. “We are looking at what areas of the business we’ll need sharper price points on.”

November 30th, 2007

Eschew the Banal at Holiday! Adopt a Vampire Bat!

Posted by: Alexandria Sage

bat.jpgSo maybe you missed the doorbuster promotions, your family already has a Wii, or the emphasis on the material just doesn’t make your heart go pitter-pat. What then, come the holidays?
    
As the gift-giving days loom ever closer, a slew of organizations are touting non-traditional gifts, from adopting a lemur to jumping out of an airplane.
    
According to gift-giving company Excitations, 41 percent of consumers don’t even remember that amazing holiday gift you gave them last year. But maybe funding a Mexico City soccer league, cataract surgery in Ghana, or helping conservation efforts in Angola might not be so easily forgotten.
 
At the World Wildlife Fund, you can adopt a proboscis monkey, red-footed booby or Galapagos Island tortoise (and get a cute furry stuffed-animal equivalent). At Utah’s Best Friends Animal Sanctuary, you’ll be sure to find a wet-nosed dog, cat, bunny or even goat who needs to be sponsored (our personal feline favorites are the rotund Buddy Boy and the fanged Scooter). 
    
At http://www.changingthepresent.org, gift-givers can choose their favorite cause, from human rights to disaster relief and landmines. Choices include giving money to fund a cellphone for an African farmer, funding brain cancer research, paying for a child’s cleft palate surgery or helping homeless American veterans
    
Looking for something more hedonistic? Http://www.excitations.com offers the opportunity to drive a Formula 2000 race car, attend the NFL Player of the Year dinner, take a falconry excursion, or master the art of mixing through a cocktail master class for two.

Gift cards even exist in the realm of charity. At http://www.charitygiftcertificates.org gift recipients can choose their favorite charity in spending their gift from you. 

Happy Shopping! (and don’t forget the lemurs)

Photo from World Wildlife Fund Web Site. 

November 29th, 2007

Do Men and Women Shop on Mars and Venus?

Posted by: Alexandria Sage

shop.jpgWomen are from Nordstrom, men are from Sears. That’s according to a new study by the University of Pennsylvania’s Wharton School that found different priorities for men and women when it comes to shopping.
    
As this female reporter and avid shopper knows well, women are “happy to meander through sprawling clothing and accessory collections or detour through the shoe department,” according to the survey.
    
Men, on the other hand, are not as fun: “Men want to go to Sears, buy a specific tool and get out,” said Robert Price, a member of the advisory board of Wharton’s Jay H. Baker Retail Initiative.
    
The study, in conjunction with Toronto consulting firm the Verde Group, found that men’s interest in shopping has atrophied after years of being taken care of by women. And they seem to be annoyed more by parking. The top problem that rankled men, according to the survey, is “difficulty in finding parking close to the store’s entrance.”
    
Women, on the other hand, who represent 83 percent of U.S. consumer spending, are put off when they can’t find help in stores when needed, and value personal interaction with store employees more than men. And if staff make women shoppers feel important, so much the better, the survey found.
    
But ultimately, shopping strategies for men and women harken back to the cave.
    
“Women are gatherers. Men are hunters,” said Delia Passi of WomenCertified, a retail training organization that also worked on the study. “Women walk into a store and scan. Men look for a specific aisle.”

November 28th, 2007

Leavitt Stumps for holiday toys in L.A.

Posted by: Alexandria Sage

toy.jpgToy retailers got a cheerleader in U.S. Department of Health and Human Services Secretary Mike Leavitt on Tuesday, who cited the vast majority of safe goods imported into the country while touting an import safety plan presented earlier this month to President George W. Bush.
    
After buying a Tickle Me Elmo, a Wii and other toys for his grandchildren at a Los Angeles-area Toys ‘R’ Us, Leavitt told reporters that independent certification was needed in order to insure safety before goods, whether toys or food, were imported.
    
“We have a fundamentally sound system, but it’s being tested by the quantity of things coming across our borders,” said the former head of the Environmental Protection Agency
   
Other recommendations of the “Action Plan for Import Safety” include increased transparency, strengthening penalties against violators and training foreign inspection agencies.
    
But Leavitt suggested that retailers themselves have the most to gain by being diligent about their supply chain.
    
“They are saying to their suppliers, unless the (toys) are safe … we don’t want them on our shelves,” Leavitt said.  “The market will punish rapidly and severely anyone who puts products that are unsafe on the shelf.”
    
But some legislation will be necessary, he said, such as a law that would give the Food and Drug Administration authority to pursue mandatory food recalls.
    
Lawmakers have proposed legislation that would virtually ban lead in toys and would give the Consumer Product Safety Commission more muscle to enforce its standards.

Mattel Inc, the world’s largest toy company, has recalled about 21 million toys this year because of lead paint and hazards posed by small magnets.  

November 21st, 2007

Is the Kindle Hemlock or Heaven to Socrates?

Posted by: Alexandria Sage

kindle.jpgBest technological-philosophical query heard recently from Wall Street comes from Bernstein Research, whose Jeffrey Lindsay posed the question: “Would Socrates have bought Amazon’s new e-reader product, the Kindle?”     

The answer, according to Lindsay, using the best Socratic analysis, is yes and no.     

While Socrates, originally a stone mason who was unpaid for his philosophical teachings, may have balked at the $400 price, and gone for Sony’s cheaper competing device, given that the great man went about on foot, he may have appreciated the Kindle’s light weight.     

 Furthermore, since Socrates did not write down his teachings for posterity, Lindsay hypothesizes that he would not care about the upload charges to send documents to Amazon to be converted and uploaded to the Kindle. But who knows for sure, seeing as that service is mostly free from Sony already.     

And to the hypothesis whether Amazon has “shot themselves in the metaphorical foot” by making Kindle a closed system, selling it for $399 and charging for newspaper and blogs that are free on the web, Bernstein wrote that Amazon customers have already given the device a modest 2.5 stars, which he said is normally reserved for poorly performing products.     

 On the other hand, “Kindle is an innovative product with game changing potential,” that could be a winner at $200 once refined and improved.

Philosophize on that.   

(Photo from Amazon.com)

October 25th, 2007

You might not feel like shopping … But hey, the air is nice

Posted by: Alexandria Sage

Attention, shoppers — the mall is now open.

Ordinarily, the reopening of a suburban mall in California would not be significant. But when you’re the Westfield Group’s North County mall in Escondido, under mandatory evacuation while surrounded by wildfires for nearly three days, reopening means a first step in getting back to normal.

“We had clean air inside and the air conditioning was working,” said Michele Predko, Westfield’s regional marketing director for the San Diego area. “I think it has offered a way for people to get out … and have a little bit of a sense of normalcy.”

Two other Southern California Westfield malls never closed this week but were used as staging areas for emergency services — one held animals from a nearby petting zoo in its parking lots, another took in horses.

Still, most stores at the North County Mall are still shuttered, not due to safety concerns but because staff can’t get to work.

But at Sears, an employee in the small appliance department said things were picking up.

“Lots of people are coming in,” she said. “I see quite a few firemen, I see people like some of the evacuees who need underwear. I’m getting traffic.”

October 16th, 2007

Forrester sees 21 percent growth in holiday online sales

Posted by: Alexandria Sage

Despite concerns about reduced consumer spending this holiday season, shoppers could spend $33 billion online from Thanksgiving to Christmas this year, according to a new forecast from Forrester Research Inc.
    
The company, which asked consumers in September about their upcoming plans for online holiday gift-giving, says that would represent growth of 21 percent from the $27 billion spent online during the holiday season last year.
    
Some 80 percent of those surveyed said they planned to buy some type of apparel or accessories online, the largest category. Books and gift cards tied for second, and toys came in third place. Some 69 percent of those surveyed planned to buy consumer electronics online, compared to 55 percent last year.     
    
But online sales still represent just a fraction of total holiday sales. The National Retail Federation is projecting 4 percent growth in total holiday sales this year to $474.5 billion. Using Forrester’s projections, that would mean online holiday sales make up 7 percent of that total this year.

September 24th, 2007

Death of a brand

Posted by: Alexandria Sage

In the end, it Death won out at Life & Death. 
 
Blue Holdings today announced it would discontinue its underperforming Life & Death brand, exit its existing two retail stores and cut its workforce by about 25 percent.
 
Experts say the frenetic days when new pricey labels hit the market in droves — and generated mind-boggling sales rises — are over, with the stalwarts in the market now taking market share and pushing out younger, less-established rivals. That frenzy especially happened in jeans, one of Blue Holdings’ main businesses. Life & Death, a knits brand, was acquired to complement the denim business and broaden Blue’s product range. 
 
But Life & Death was not as well-known as lines from True Religion, Seven For All Mankind or Citizens of Humanity
 
Commerce, California-based Blue Holdings expects savings of $750,000 this year and about $2.8 million next year from its actions, with its two stores in Los Angeles and San Francisco to close within three months. Some 35 employees will lose their jobs by October’s end, the company said.
 
Other lines by Blue Holdings include Antik Denim, Taverniti So Jeans, and Yanuk.

( This blog was updated to correct that Life & Death sold knits, not jeans.)