Robin Lewis

About Robin Lewis

Robin Lewis has over forty years of strategic operating and consulting experience in the retail and related consumer products industries. He has held executive positions at DuPont, VF Corporation, Women’s Wear Daily (WWD), and Goldman Sachs, among others, and has consulted for dozens of retail, consumer products and other companies. In addition to his role as CEO and Editorial Director of The Robin Report, he is a professor at the Graduate School of Professional Studies at The Fashion Institute of Technology.

Amazon Acquires Sears

amazon-sears_Rd.1If you have any doubts, just wake up and think about it. It’s a win-win for both Jeff “Get Big Fast” Bezos and Eddie “Take the Money and Run” Lampert. Amazon gets roughly 2400 US stores (or “buildings”), overnight (1300 Sears, 1100 Kmart). The acquisition becomes Bezos’ answer to omnichannel and the proven revenue synergy of consumers’ ability to shop online and off; the convenience of proximity for pick up and returns; and facilitation of even greater delivery speed. So just as Walmart’s 4500 stores double as distribution centers, so would Amazon’s acquired Sears/Kmart stores.

The real estate assets would be the primary reason for Amazon’s interest in acquiring Sears Holdings. However, there are several other valuable assets and operations, which Amazon could enhance and grow.

What Eddie gets in such a sale is a potentially profitable exit strategy that many analysts, myself included, believe he is pursuing. In fact, in several of my past articles I have opined that Lampert was, indeed, managing the business into liquidation. And regarding the real estate assets, Lampert has been methodically selling, leasing (partial or in total), and/or closing Sears and Kmart locations. Indeed, he indicated not too long ago that Sears Holdings was considering shuttering its entire fleet of Kmart stores. So if he is seeking an exit, a far less painful and certainly more profitable option would be a sale to Amazon.

This could fall nicely into Bezos’ hungry little hands. Amazon might be able to cut an incredible deal, at least far less costly in time and capital, than building or leasing its own nationwide distribution centers/stores.

The financial complexities involved in such a deal are beyond my pay grade, particularly since Eddie engineered a total reorganization of the business: morphing its structure into some 30 business units; establishing the securitization of brands — “unlocking value” as Eddie called it — and other aspects that might give the dealmakers a royal headache.

However, “by the numbers” alone, it might be timely for both Bezos and Lampert to want to make the deal. When Lampert formed Sears Holdings in 2005, revenues of the combined businesses were around $50 billion with about 3500 stores. Revenues and profits have dropped steadily, to $36 billion in 2013, with a loss of about $1.4 billion last year. The stock price hit a high in 2007 at $192 per share; today, a share of Sears Holdings is hovering around $30. One analyst said if the stock drops to around $20 per share, Sears would be “one stop on the way to liquidation.”

So as Sears’ declining financial condition continues, its valuation as a potential acquisition target falls as well, making it very attractive to Amazon. Sitting in Amazon’s lengthening shadow, Eddie might assess that the “whole” is now more valuable than the sum of each of the last few remaining assets. Therefore, in my opinion, Eddie might be bailing into his lifeboat sooner rather than later, and a deal with Amazon would no doubt fill it with enough cash for him to add substantially to the pile he’s already extracted through his brilliant financial engineering.

Other Amazon “Gets”

There are other attractive assets and operations that could easily be integrated into Amazon’s model, and to which value could be added (in some areas repaired). While Kenmore appliances, Craftsman tools, and DieHard batteries have been placed into another entity and charge Sears royalties as a licensee, I’m sure Amazon would insist they come with the deal. And, those are iconic brands that can be re-energized. The e-commerce business, which Lampert invested most heavily in and strategically focused on for future growth, while only accounting for about 3% of the total business, could certainly be leveraged when plugged into Amazon’s model.

Furthermore, Amazon has mastered “Big Data” (its database is estimated to be larger than that of the Pentagon), and more importantly, they know how to use it strategically. For example, it has the ability to guide customized or “localized” assortments into each of the store locations based on local consumer preferences.

What Amazon Shouldn’t Want

However, and above all, the Sears or Kmart names are not on anyone’s “value-added” list. Sears and Kmart’s financial plunge; the physical deterioration of their stores; the fragmented and “siloed” operations; strategically chaotic merchandising and marketing strategies and ad hoc implementation, all have contributed to the decimation of the consumers’ perception of the brands. The iconic Sears brand has taken this biggest hit; it was once at the pinnacle of retailing in the 1970s even bigger than today’s behemoth Walmart.

So, in my opinion, bye, bye Sears and Kmart brands, hello Amazon, replacing those brands wherever they appear, store nameplates included. Why not? The Amazon brand name is simply more powerful today, and I suggest even more so among the younger generation, well on its way to becoming the largest consumer segment.

You say, ‘How sad!’ But, get over it. If Sears and KMart aren’t discarded in this kind of a deal, at some point in the very near future, they will end up in the trash bin of history. And “Fast Buck” Eddie “Time to Exit” Lampert will go down though the ages as the iconic financier who won more cash (way more than most people would know what to do with), but failed to succeed at what he declared was his original objective: to return Sears and Kmart to their once powerful positions as iconic American retail brands.

Amazon, a little-known brand just a decade ago, is becoming the new American icon. Maybe acquiring these two fading American icons is a more dignified way to put them to rest than the blunt harshness of liquidation.

Walmart Can Crush Amazon

walmart-amazon-pac-man_rd.3I described Amazon a while ago, as “PacMan,” gobbling up everything in sight, including big chunks out of Walmart. Well, that’s about to change. Walmart can literally crush Amazon. Or at least it can put a lid on Jeff Bezos’ mantra: “get bigger faster.” Bezos will have to begin quantifying just what getting “big, bigger and faster” means. And it will also be the moment we’ve all been waiting for when Amazon will have to start turning a profit. At this juncture, yes, Amazon, the great disruptor, has created a new retail playing field, that they alone have been dominating.

But Walmart is finally rediscovering and reinventing the part of its DNA that disrupted the industry and created a unique new playing field half a century ago, which it alone dominated and grew to its near- $500 billion in annual sales (Amazon is pushing for $90 billion). Walmart is rediscovering its once-revered distribution genius, not just as an incremental update and improvement, but rather to reinvent it altogether. And I predict it will reinvent itself by “leapfrogging” over Amazon’s model (which still has miles to go), and will redefine what getting bigger, faster really means. Talk about a breathtaking spectacle. What does a gargantuan $500 billion, 10,000-store (worldwide – about 4500 in the US) company look like getting bigger, faster? [Read more...]

Technology Doesn’t Change People, People Do

speed kills_FinalPardon me for using the “guns don’t kill people” metaphor. But people are now using the incredible power of technology and the Internet in ways that are disruptively changing our entire culture: some of it awesomely positive, but some of it ominously negative. The myriad of positive effects is accelerating on a daily basis, immediately recognizable as providing “better, easier, quicker, more convenient, more sustainable, more experiential” and on and on. Yet, in my opinion, there is a darker side that threatens to alter our culture in a very negative way.

Today, humans are born with a mouse in one hand and a smartphone in the other. “Digital” is the ‘D’ in our DNA. That is to say that as we evolve generationally, the importance and utility in our lives of newspapers, books, libraries, movie theaters, concert halls, designers and on and on, become irrelevant. Exaggerating a little bit, but you are getting my drift; and we are, indeed, participating in this cultural evolution whether we want to or not. [Read more...]

Robin Lewis on CBS Sunday Morning

Check out the complete article “A dying breed: The American Shopping Mall” on the CBS Sunday Morning web site >>

The Great Retail Demassification

deadmall2The Death and Diminishment of Malls and Other Big Footprints

We are on the edge of the Great Retail Demassification. Prior to the “great disruptor” (that would be the Internet), and before the marketplace became ridiculously over-stored and over-stuffed, consumers were well served by massive regional malls (currently numbering about 1200), in which retailers located their stores and to which consumers travelled enthusiastically. To steal a line from the movie, “Field of Dreams,” retail growth strategy during the pre-digital era could truly be based on nothing more than “build it and they will come.” And they did. Fast forward: consumers have every retail store in the world resting comfortably in their pockets, just a key-tap away, wherever they are and whenever they choose to shop for exactly what they want. Why, then, would anyone spend the time and money to travel to, and shop through the malls; or for that matter, any large, impersonal, traditional retailer? [Read more...]

The British are Coming, The British are Coming

RR_MarigayMarigay McKee’s Revolution?

First of all, along with many industry luminaries, I extend a warm welcome to Marigay McKee to this side of the pond, and especially to New York City: the most intensely competitive city in the most ferociously competitive country on the planet; massively over-stored; stuffed and web-sited; and with the most complex distribution and marketing infrastructure in the world. And I’m sorry to start off with such a negative tidbit, but as people get to know me they understand I tend to remind them of the darker side of things. Usually my observations are followed by: “so good luck!.” And in Ms. McKee’s case, it’s augmented by: “particularly since she is coming from the role of chief merchant of one privately-owned store to president of 41 publicly-owned stores, with a lot of underperforming doors.” [Read more...]

Amazon “Nailed”…For Now

Jeff Bezos was quoted at an Aspen Institute awards dinner, “Invention requires a long-term willingness to be misunderstood.”

Okay Mr. Bezos. However, I must say that my friend and columnist for this publication, Warren Shoulberg, didn’t misunderstand your “invention.” In fact, he nailed it in this issue, at least for now. His article, “Down by The River,” provides a clear and brilliant insight into the breadth and depth of that omnipotent “river,” indeed, sparking the “fourth distribution revolution.” It also sends a strong and provocative message to all retailers, large and small, both online and off: you are getting your “e-butts” kicked, and you might as well concede “game over.”

He suggests that even if you catch up, it will be too late.

Yes!! … But for the 70% on the Ground

I totally agree with Warren about kicking “e-butts,” but what about the share of total retail sales owned by the real butts on the ground? Currently, varying between 70 to 95 percent, depending on the category. That’s a whopping big share flowing through the various physical distribution platforms in this omnichannel new world. So, even if, as Forrester Research predicts, that someday e-commerce may account for 30 to 40 percent of total retail sales, the omnipotent Amazon will not even be a player on the biggest “real butts” playing field, unless …

They Hit the Ground

And if Amazon does go physical, as predicted in my co-authored book, and in many articles in this publication, they will hit the ground running, no — sprinting. I say sprinting because, they will not only be adding a sixth distribution point to Warren’s “fourth revolution,” Bezos will be launching a new “real butt” model that will — well, kick “real butts.”

Using their Pentagon-sized database and the hundreds of huge distribution centers they are now building across the country, I envision small, experiential showroom-like offshoots of those centers, spreading into neighborhoods, and physically and digitally connecting/engaging with each local consumer. Their ‘big data’ already tells them what each of those people desires. And all of the technological gizmos and gadgets currently being tested and tried by the “real butts” will likely be improved and added to by Amazon when they hit the ground.

And They Will

If Bezos is as brilliant as reported, he ‘gets it,’ and knows this is a next phase. The omnichannel concept is not just for brick-and-mortar retailing. And the three-to-four-times more revenue producing synergy created by both online and offline shopping options, is a metric Bezos can’t ignore, to say nothing of the absolute dollars he will be leaving on the real butt playing field if he chooses not to play.

Oh yes, understand one other thing about his “invention:” you may have to wait (not long), but he will play.

Michael Gould…A Leader in the Ways of Life

MIke-Gould-FINAL-IMAGEHow often have we read or heard the phrase “…so and so is stepping down,” when announcing or referring to a colleague who is retiring? Michael Gould, CEO of Bloomingdale’s, is officially doing this on February 1st. However, after 22 years of elevating that revered brand to a higher level, building on the brilliant achievements of his legendary predecessor, Marvin Traub, who created a store “like no other store in the world;” in my opinion, Mike is not “stepping down.” He is just continuing to move “up” in life.

In life there are doers and observers. And, there are leaders and followers. Mike Gould is a doer, (still with incredible energy), and a leader, with an exclamation point on leader. So, whatever it is he will be “stepping up” to, he will be “doing” leadership. And, it will be done in his unique way, which is not about titles or rank, or just about leading employees in business. And it certainly isn’t about exercising the power those titles bestowed upon him to direct those under him to follow without question.

Mike’s leadership philosophy has always been about helping each individual find his or her, own unique path in life. Building trust, humility, empathy and thinking of others ahead of himself, are his defining characteristics. Of his CEO role at Bloomingdale’s, he was quoted in a New York Times article as saying: “I’d like to think my legacy will be the ‘people come first’ environment I’ve tried to create. Employees’ personal growth and education has always been the first thing I wanted to talk about because I felt that as long as people knew that Bloomingdale’s was a place where you could grow, they’d know there was no reason to go somewhere else.

At the end of the day, no one remembers anyone’s numbers, no matter how good they were at any moment in time. I hope people will say, ‘He gave me an opportunity to be more than I thought I could be’ — and that they will carry that forward as they manage people in the future.”
I was envious that the New York Times “scooped” that bit of Mike’s philosophy, but I’m certainly not too proud to give them the credit, because it is central to my view of him; it explains why I believe he is moving “up” rather than “stepping down.”

Now he will have the expanse of life to influence, teach and lead many more people “to be more than they thought they could be.” His father was a teacher, and Mike expressed to me that this is something that very much interests him. He does speak often about leadership in conversation, as a guest lecturer and at more formal conference venues. So don’t be surprised if one of his forays into his new life is teaching, perhaps a leadership course at his alma mater, Columbia University where he received his MBA.

What Did He Do in His Day Job

I would be remiss within the mission of The Robin Report not to provide my perspective on how Mike took Bloomingdale’s to a higher level, strategically positioning it for growth into the 21st Century, and what could metaphorically be called the “World War III” of retailing. Marvin Traub did create the “center ring,” so to speak, in pioneering some of the most exciting and entertaining experiences in retailing at the 59th Street store. However, Mike envisioned a more expansive Bloomingdale’s, spreading the excitement and experience into all of their stores, which grew during his tenure from 14 to 37, plus 13 outlet stores. And he was among the “first movers” in expanding internationally, opening

Bloomingdale’s in Dubai.

He also continued the Bloomingdale’s focus on finding emerging designers and new brands to keep “newness” flowing through the store. He was quoted: “That’s the kind of business I wanted to run. We weren’t going to try to replicate anything else; the plan was to do what no one else did.”

His thoughts on creating an exciting shopping experience were captured in a conversation I had with him for The Robin Report. He said, “To me it all revolves around one thing. How is the store this interactive place that creates relationships? How is the store about something more than theater, but a sense of excitement? It’s about, ‘wow I didn’t expect that.’ It’s a place of discovery. Today you can call Daniel or Shun Lee East in New York and they’ll deliver three-star take-out to your office or home. Anyone can deliver. So why come into a store? Why go to a movie theater when you can watch Netflix at home, for almost nothing? Because it’s all about the experience. That to me is what it’s about.”
“Charles Swindoll who said, Life is 10% what’s given you; 90% how you want to deal with it. We’ve got that 90%. The 10%, that’s the yucky weather. But the 90%, which is our attitude, is what we are doing to create an environment that says “Wow! I’ve got to go there!”

So instead of having “big shoes to fill” upon Marvin Traub’s departure, Mike created his own shoes. Likewise, Mike’s very capable and visionary successor in his own right, Tony Spring, will create his own shoes.

Mike likes to refer to a John Gardner article in 1990 about personal renewal, and says: “Life is an endless process. When you get out of college you say: ‘I’ve got my degree, I graduated with a solid GPA, I played intercollegiate sports, I spent a year in Europe. Now I’m going to go work.’ No, you’re not going to go work. You’re going to go learn. Part of what you’re going to learn about here is retail and part of what you’re going to learn is about life and interpersonal skills. It’s everyone’s role at Bloomingdale’s to make sure these kids are learning. And it’s everyone’s responsibility to keep learning.”

So with a new pair of shoes that no one will ever fill, Michael Gould is off to learn more about life.

China Seeks Low-Cost Production copyIn the United States

Beware of what you wish for. For all of the “pollyannas” who have been rooting for manufacturing jobs returning to the good old USA from low-cost countries such as China, they may just be getting their wish; but not in the way they intended.  It will end badly.

In a perverse kind of irony, it appears that the United States may be evolving into a low-cost country, wooing China-based manufacturers to set up shop here — at least in the textile and yarn industries — which the US lost to Asia and the Far East in the 70s and 80s.

In fact, several Chinese yarn and textile manufacturing businesses have already moved to the United States, primarily in the southern states where the manufacturing skills still reside and where most of those textile jobs were lost to lower-cost countries. The region also has state and local governments eager to boost their economies and decrease unemployment, and willing to provide significant tax breaks, bonds to defray project costs, grants, and job-development credits. [Read more...]

In Search of The Future

futureThe Past is Not Prologue

I feel your pain, your anxiety, your confusion. I’m just relieved it’s yours and not mine! You are in the middle of chaos, the “Wild West,” in search of the new frontier, and a future shrouded in fog. However, two things are clear. The past will be no prologue for the transformation your business must go through; and if it fails to transform, it will surely die.

The disruptive, game-changing dynamics of the Internet, all of the new retail and supply chain enabling technologies, globalization, and over-saturated markets continue to drive unlimited and instantaneous access for whatever product or service consumers desire; whenever, wherever, however and how often they so desire. The unprecedented convergence of these dynamics of commerce and a 24/7-consumer is arguably driving the greatest transformation in retailing’s history, which will require innovation and creativity; plus fundamental new strategies and systemic change in our business models to succeed into the future.

To paraphrase Charles Dickens’ opening line in his epic Tale of Two Cities, for this revolution, we are now in the most exciting of times and the most challenging of times. [Read more...]

Now It’s The Post-Prep Digital Menswear Evolution?

nicksplash1Remember when Nick Graham launched a rocket into space with a pair of his Joe Boxer brand shorts in the nose cone? Or, were you there when he did the first live-streaming fashion show (from an airline hanger in Iceland?) Regretfully, I was invited but couldn’t attend. Or, how about when he launched one of the first fashion industry websites; wove the Joe Boxer URL into the elastic of his underwear; installed the world’s largest live ticker-email sign in New York’s Times Square; and sold the world’s first cyber-scooter in the Neiman Marcus Christmas catalogue.

During the early 90s, Nick Graham, an early adopter of technology, connected his cyber-vision to his meteoric Joe Boxer brand and one outrageous and hysterical event after another.  Indeed, his mantra, ‘The brand is the amusement park, the product is the souvenir,’ was the DNA of the Joe Boxer brand.

And, now he’s at it again. [Read more...]

The Death of Mega Brands

P&G’s Tide: Just One Canary In the Mine

Preposterous!!! You must be thinking: “he’s finally gone off his wheel,” when I say iconic brands like Tide, and suggesting that other P&G mega-brands, Chevrolet, Levi’s, Nike, Coca-Cola, Wheaties, Cheerios, Skippy, Ralph Lauren, Gap, and on and on, are going to suffer a precipitous decline in relevance, in sales, and share of market; or drop dead, at the very least.

canary FC_FINALWell, yes, that is what I’m saying, because we are well into what can be called the Consumer Century. So what? All of the mega brand managers and retailers understand the power of the consumer today. Furthermore, most of them believe that classic mega brands are each powerful and compelling enough to win the purchase.

Not a chance. Today, the consumer has the power and is operating on technological steroids bringing mega brand power to its knees. This is due to shoppers’ rapidly increasing power of choice (including price dictation in a world of too many stores and websites, and too much stuff); instantaneous access (ubiquitous distribution); and demand for ever-greater experiences. [Read more...]