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MK is no LV: It’s Not Coach Either

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Is this any way to manage a Jet Set brand? Maybe, if you’re looking for a quick exit.

Listening to Michael Kors CFO Joe Parsons speak at ICR on January 16, 2013 on the Kors Jet Set aesthetic—spanning wings, wheels and water—I was reminded of the brand Louis Vuitton, also rooted in luxury travel.

iStock_000019271426MediumI make the comparison to Louis Vuitton for several reasons, beginning with its origins as a provider of luggage in the 1850s. In October 2010, I visited Paris (not just because I love to travel… and I especially love Paris) to see the installation of a Coach shop-in-shop at the Printemps flagship on Boulevard Haussmann, and do a store tour of Ralph Lauren’s new Left Bank flagship on Boulevard Saint-Germain. While I was there, I visited the Musée Carnavalet (the museum of the history of Paris). I never quite understood the fascination and demand for Louis Vuitton until I walked through the museum’s exhibit, Voyage en Capitale, Louis Vuitton & Paris.

On exhibit were the tailor-made trunks for nobility, celebrity and the wealthy. The exhibit told the brand story rooted in travel, a phenomenon that excites the imagination with the romance of new places and people, and different cultures and experiences. What holds more allure than travel? At the show, I discovered the basis of the brand’s aspirational DNA, which combines best-of-class quality and aesthetic with fashion’s excitement and superior execution at every touch point.

Is Michael Kors brand association with Jet Set travel designed to be the LV of the 21st Century? [Read more...]

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Posted February 12, 2013

Michael Kors – A Tale of Two Brands

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MK_Charm-01I’ve long been a Michael Kors fan, buying gorgeous double-faced wool dresses on sale at Bergdorf Goodman or in the Michael Kors store on Madison Avenue—only at 70% or more off, after Christmas and in the early summer.

These dresses, and some pants, skirts, jackets and wonderful cashmere sweaters, are lined up like so many soldiers in my closet ready for almost any outing. The styles remain basically the same year-in and year-out. Beautiful fabrics such as the double-faced wool, along with heavier wools and tweeds, matte jersey, raw silk, satin, and cotton twill for summer. All styled classically and elegantly. Feminine. Flattering. Simple sleeveless sheaths and separates with some accessories, handbags and shoes to round out the collection. Wearable, luxurious, classic American style.

But now, since Michael Kors has gone public, the positioning of a lower tiered line, Michael by Michael Kors, into a global lifestyle brand seems a distinctly different brand proposition and one that is, perhaps, at odds with the couture line. Of additional concern is the thought that the couture line has suffered as a result of the greater attention to, and investment in, the lifestyle brand.

The lifestyle brand is designed and merchandised for a different and younger customer who likely has never seen, heard of, or cared about the Michael Kors collection or its understated, classic American positioning and style. These customers know Michael Kors from his successful appearance on Project Runway; from Michael Kors advertising; and from Michael Kors licensed watches, handbags and small leather goods featuring a prominently displayed MK logo in shiny brassy, brass. The new Michael Kors brand is described by management as a “global luxury lifestyle brand with a multi-channel strategy, unique design and strong infrastructure…a compelling assortment of luxury merchandise and exceptional service in a Jet Set store environment.”

The term “Jet Set” appears often in company communications. As a child of the 60’s when ‘Jet Set’actually meant something—picture Princess Margaret flying off to Mustique, Bianca Jagger going anywhere. And before international travel became so much more like getting on a bus at the Port Authority than departing in style at the Eero Saarinen designed TWA terminal at Kennedy— “Jet Set” was defined as: “An international social set made up of wealthy people who travel from one fashionable place to another.” [Read more...]

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Posted February 12, 2013

lululemon: A Cult, a Phenomenon or Just a Great Brand

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The Robin Report - lululemon

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A few years ago, I noticed a woman in Central Park with what I thought was a tag or store sticker on the outside of her pants. “You still have the tag on your pants,” I told her as I passed her on the track. “That is the label, it belongs there!” she explained. This was the first time I noticed the Lululemon brand icon. The logo is featured on pant legs in a way that looks like it was stuck there. An rounded A shape that appears like an upside down U, it is inconspicuous, but, for those in the know, it is the sign of membership in what is one of today’s most powerful brands.

Lululemon was founded in 1998 in Vancouver, British Columbia by Chip Wilson, a 20-year veteran of the surf, skate and snowboard business, who noted a need for a more technical and performance-based product after he took, and loved, his first yoga class. Wilson, now a Forbes ranked ‘Yoga Billionaire,’ stepped down from his role as CEO and passed the reins to Christine Day, a former Starbucks executive. Wilson remains Chairman. Together Wilson and Day hold approximately 32% of the company’s outstanding shares. “We like that management has skin in the game,” a Morningstar report noted recently.

Lululemon opened its first store in 2000. The company now has 147 stores in North America. Lululemon is one of the fastest growing companies in the retail and apparel space and is outperforming the industry on almost every level. Lululemon management is projecting FY 2012 growth of 25% with same store sales growth at 25% and direct to consumer growth, which accounts for 14% of sales of 179%. Last year the company reached a billion dollars in sales; this year the company is projecting revenue in the range of $1.3 billion. And it holds no debt. [Read more...]

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Posted October 23, 2012

Wake Up Consumer Electronics…You’re Ignoring Women

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One fact that should continually resonate in the minds of brands and retailers every minute of every day is that women are responsible for roughly 70% of all purchasing in the retail and consumer products industries.  And, since about 70% of our GDP is driven by consumption, women should indeed, be the number-one shopping target.

The Robin ReportAnd, in one category, consumer electronics, I was made aware of the findings of a research project conducted by Cisco called “Retail Orchestration,” that not only are retailers missing a huge opportunity for women’s business, they could simultaneously beat the online sellers in the “showrooming” game, simply by shifting their focus from tech-savvy young college guys (who are into devices), to women (who are into content, and who want attention and education).
Steve Jobs and his team at Apple always understood this.  Today, you can observe moms and their kids in an Apple store, and you’ll notice a tiny table full of the kids banging away on iPads while their moms are taking their time shopping with sales associates. Apple gets that you have to keep the kids entertained so mom can look around, (and seek education).

Conversely, if you walk into a Best Buy, everything is geared towards the college and younger segment tech-savvy males, who, by the way, are also the biggest “showroomers.” [Read more...]

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Posted October 11, 2012

Why Home Furnishings Can Save Sears & Kmart… And Why It Will Never Happen

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The Robin Report - KmartDisclaimer: This is not another opinion piece trashing Fast Eddie – aka Eddie Money, Edward Moneyhands, Edward S. Lampert. Unlike a whole lot of other people, I get what he’s doing at Sears Holdings, which is making a lot of money for Fast Eddie – aka Eddie Money, Edward Moneyhands… well, you get the idea.

The plan is not to run a great retail institution, it’s to make a great deal of money. And by that measure, they are perhaps the most successful company in American business today. If someone were able to analyze all of the SEC filings, reports and data coming out of ESL Holdings in Greenwich, Connecticut, it would no doubt show Fast Eddie has done quite well… for Fast Eddie.

No, we’ve come not to trash Fast Eddie, but to present a tale of what-if… what if Sears Holding really wanted to be in the retail business and operate not just one, but two strong, competitive and profitable stores?

Not only is that eminently doable, it’s quite frankly not all that hard and wouldn’t take a whole lot of capital investment. Even more amazing, what it would take are some of the very things Fast Eddie has tried, particularly in the earlier days of his ownership – back when it seemed there might have been even a glimmer of a plan to create successful retailers. [Read more...]

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Posted September 9, 2012

Derailing the Showrooming Scare

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The Robin ReportIt’s easy to see why showrooming is keeping many brick-and-mortar retailers up at night. In fact, it looks like the beginning of a bad epidemic-outbreak movie — some retailers even feel powerless to slow its advance and are reduced to simply watching, one by one, as those around them succumb and close their doors for good.

But in reality, retailers aren’t powerless against showrooming. They have a choice: they can either combat showrooming or embrace it. The decision to combat or embrace it depends on the level of susceptibility a retailer may face, which in turn depends on the demographics of the retailer’s target customers, product price points and merchandise type.

Demographics. A recent Kurt Salmon and Prosper Corporation survey of 8,000 consumers revealed that 70 percent of consumers ages 25 to 54 with smart phones use them to comparison shop, up from 62 percent a year ago. And of those who use their smart phones to comparison shop in-store, almost one in three ultimately buys the product online, according to ClickIQ. Older consumers are getting more comfortable with showrooming as well. The Kurt Salmon survey found that 49 percent of consumers ages 55 to 65 use their smart phones to comparison shop. And as the population ages, the percentage of the population showrooming will continue to grow.

Perhaps not surprisingly, wealthier consumers are also more likely to showroom. The Kurt Salmon survey showed that 65 percent of consumers with incomes over $150,000 a year comparison shop on their smart phones, compared to only 56 percent of consumers who earn under $50,000 a year. [Read more...]

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Posted July 17, 2012

Reinvention Hardware

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The world of retailing is filled with some astonishing tales of stores being reinvented, transforming themselves into entirely different species.

Banana Republic started life selling safari jackets in funky jungle-like locations with jeeps crashing through the front window until it turned to metrosexual ware. Before Marvin Traub & Co. arrived, Bloomingdale Brothers was a low-end discount department store where the Little Brown Bags were little brown bags.

And Abercrombie & Fitch used to cater to the adventurer crowd who wouldn’t know the difference between a Cosmopolitan and a cosmetologist.

To that list, Gary Friedman is in the process of adding Restoration Hardware. [Read more...]

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Posted January 23, 2012

Confessions of an Aging Baby Boomer

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I’m a leading edge Baby Boomer, born at a time when life was simple and filled with optimism and possibilities. Now, that time is past and the world around us has changed. And, of course, we are getting older. We do not think of the next life stage as ‘old.’ Aging, yes. Old, no! But we will continue to be an important consumer segment in the coming decades, and will not “go gentle into that good night.”

I belong to the largest and most important economic cohort in U.S. history. I’ve accounted for the greatest share of U.S. consumption and earnings since 1980. My era of economic dominance is projected to last until 2019. I’ve benefited from more education than any previous generation. As a woman, my increased education and participation in the labor force along with the rise in technology and globalization led to a strong positive economic environment throughout much of my life.

The Robin Report BabyBoomer

I’ve been a big spender, accounting for 78% of GDP from 1995 to 2005. The relative prosperity which characterized most of my life, along with the complete dominance of my cohort in every life stage, served to increase my innate generational optimism and feelings of entitlement. I grew up believing I both earned and deserved “the good life.” [Read more...]

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Posted November 24, 2011

Fun Facts about Furniture

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Imagine if you crossed a car dealership with a funeral parlor. What you’d have would be a furniture store.

The retailing of furniture may not be the most archaic, antiquated and illogical form of merchandising in American business today…but it’s pretty damn close.

Anytime anyone talks about the best retailers in America, that conversation hardly ever includes a furniture retailer.

Virtually every consumer products category in America has a world-class, national retailer that dominates the category. Not furniture.

Virtually every consumer products category in America has a world-class, national brand that is instantly recognizable. Not furniture.

Think about it. Furniture is usually the third most expensive thing a person will ever buy, after a house and a car. Yet most people visit a furniture store about as often as they stop by a mortuary. With an often similar shopping experience, too. So, what you don’t know about furniture retailing could fill…well, could fill this column.

[Read more...]

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Posted September 5, 2011

Q&A With Joseph Gromek, CEO of Warnaco

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The Robin Report - Joe GromekWarnaco’s (WRC) performance since CEO Joe Gromek arrived in 2003 has been spectacular. He inherited a company that was just coming out of bankruptcy, and had suffered a bottom line loss of almost $900 million in 2001 on sales of $1.6 billion and a loss of almost a billion dollars on sales of $1.4 billion in 2002. Starting with his first year, and every year thereafter, except for a negligible dip in income in 2008 and revenue in 2009, Warnaco enjoyed double digit growth on all key metrics. The company sailed through the Great Recession as though it didn’t happen. Sales now stand at about $2.3 billion, operating margin at 11.4%, and operating income at $262.7 million.

Q. Joe, can you give us some background on the turnaround efforts put in place before the recession, and highlights of how you were able to get through the recession with only minor hiccups and outperform the majority of players in this industry? Was there something about your business that “insulated” Warnaco from the full impact of the recession?

[Read more...]

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Posted July 6, 2011

School Dazed and Confused

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Why Home Retailers Should be Cracking the Books

By Warren Shoulberg

It’s time for many home furnishings retailers to go back-to-school – when it comes to back-to-school.

While the late summer/early fall back-to-school selling season is primarily focused on apparel, some stores in the home business have gotten a nice seasonal boost selling dorm items to college kids. It’s developed into a nice business for stores at a time of year when there aren’t any natural holiday-oriented events on their home promotional calendar.

The Robin ReportBut it’s not as easy as A-B-C. While stores like Bed Bath & Beyond (BBY) and Kohl’s (KSS) have seized the college back-to-school season and made it their own, a lot of retailers have simply been left behind.The home furnishings business, other than some obvious exceptions like beach towels and patio furniture, is largely a seasonless business. Stores are used to at most a twice-a-year merchandise reset, with the occasional drop-in program. [Read more...]

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Posted April 13, 2011

Homeless in Bentonville

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The Robin ReportWill all due apologies to Bob Dylan:

“Oh, Mr. Sam, can this really be the end,
To be stuck inside of Bentonville
With the home furnishings blues again.”

Whoever would have thought it? The biggest big box of them all. The grand, high falutin’ retailer of the world. The mother of all megastores. And they don’t have a clue what to do about their home business.

What’s a Walmart (WMT) to do?

I have the utmost respect for Walmart. They are an amazing operation and they’ve changed not only the retailing world, but also the entire world by their very presence.

Most vendors will tell you they are a stand-up operation: Tough negotiators upfront but never abusive or prone to cheap chargeback tricks.

And they’ve cleaned up their public image a whole lot over the past few years, presenting a much more politically correct front to the world.
I even think Sam’s Cola isn’t bad.

[Read more...]

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Posted November 20, 2010