Why L Brands CEO Les Wexner Needs to Spend a Day in London

Victoria's Secret Fashion Show - RunwayVictoria’s Secret, the $7 billion brand known for its sexy lingerie, scantily dressed models and world-famous intimate apparel runway show, is opening more than a hundred new stores this year in Asia, Europe and other international markets.

Shoppers heading there to buy the latest Dream Angel bra and panty will be disappointed, however, because these stores carry little or no lingerie.

Yes, you read that right. Of the approximately 130 new Victoria’s Secret stores slated to open overseas in 2015, 120 will be Victoria’s Secret Beauty and Accessories (VSBA) stores, carrying fragrance and accessories. The stores are financed and operated by franchise partners who pay L Brands (LB) a royalty based on sales volume. Early this year, several of these stores opened in China, a key future market for the company. Most of them are in airports, and bear the Victoria’s Secret nameplate, just like their fully-assorted older sisters. [Read more…]

Polo Ralph Lauren – Adventures in Brand Architecture

Polo Ralph Lauren flagship store on Fifth Avenue in New YorkA New Take on an Old Story

In 2004, Ralph Lauren launched Rugby, a new brand to appeal to a new customer. The company was serious enough about the brand to attempt to trademark the use of the name in apparel and related categories. The Rugby brand had less to do with the wide striped, white collared shirts associated with the sport than the desire to appeal to a new, younger customer who may or may not have been familiar with the Ralph Lauren brand. Or brands, because there are several in the Lauren stable. More on that later. [Read more…]

Lifestyles From the Rich and Famous

RR_Lifestyles From the Rich and Famous_mcAh, Robin Leach, you won’t believe what they’re doing now.

Back in the heyday of your incredibly ridiculous – and every bit as addictive – breakthrough TV series, you gave us a measured and breathless peek into how the superstars of the entertainment world actually lived. OK, so maybe it wasn’t so actual, but that wasn’t the point: aspirational voyeurism was.

Well, now we don’t need Robin (Leach, not Lewis) to enlighten us. The rich and famous are doing it themselves…and trying to make a few bucks in the process.

Over the past year or three, a whole slew of TV, movie and ersatz celebrities have launched businesses selling us the products they themselves actually use…once again with the proviso that this is much more about perception than reality. [Read more…]

Fulfilling the Availability Promise

RR_Fulfilling the Availability PromiseEnabling an Omnichannel Inventory Management Strategy

While today’s consumer has dramatically changed, most retailers are still relying on inventory management tactics that are stuck in the past.

Some of the world’s best-known retailers have learned this lesson the hard way and are now leading the way toward truly omnichannel inventory management.

For example, in 2013, Walmart lost $3 billion in sales due to out-of-stock issues, even though its inventory grew faster than its sales. The culprit? Infrequent collaboration with supply chain partners, who were not nimble enough to react to quick changes in demand. To address this problem, Walmart gave key vendors access to its backroom inventory data, leading to significant improvements in replenishment capabilities and on-shelf availability. [Read more…]

J.Crew Enters Danger Zone

RR_J_Crew Enters Danger Zone A Graveyard Resting Place for The GapA Graveyard Resting Place for The Gap

It may be too late for Mickey (Millard “Mickey” Drexler, CEO, J.Crew). Ironically, I believe the J.Crew brand is going the way of the Gap. Drexler was at the Gap’s helm, lifting it up out of its initial ditch to become one of the most revered and powerful apparel brands in the world. As any good captain of the ship, he was still on deck as it was submerging, never to return. I have pointed out why Gap, in my opinion, will not ever return to its former pinnacle. In There is No Gap Déjà Vu, I reported that the decade-long attempts under two Gap CEO’s, and now a third that would be as futile as the first two, have not understood that once consumers mentally disconnect from a brand, it’s over — fini, the fat lady sang, period. Note: I said brand, not the failure of being off-trend or bad styling; not bad product, marketing, imaging or advertising … none of which alone would necessarily render a brand kaput. It’s a combination of all of those interconnected elements that complete a brand’s persona, and which over time indelibly and powerfully embed the brand in consumers’ minds. [Read more…]

At Your Service: Two Case Studies

TOP Shop John Lewis combo FinalIn the developed world, retailing remains under siege. As we know, a steady flow of new Internet competitors vie for consumer dollars, frequently undercutting prices of the brick-and-mortar stores. Meanwhile, amidst a sea of sameness with parity products, traditional retailers too frequently compete merely on price. In-store service levels have evaporated in all but the most high-end luxury houses or new entrepreneurial and tech brands, further propelling the “race to the bottom,” an industry trend Robin Lewis coined back in 2012. [Read more…]

There Is No Gap Déjà Vu

gap_RL_RR_7-15-2015More Like A Slow, Sears-Like Descent To The Bottom?

Glenn Murphy exits.  Art Peck takes over.  It matters not who the players are because there has been a revolving door full of them for the past 15 years, all declaring how they would return Gap to its once dominant position as the cool apparel brand for America’s youth.  All of them failed to do so, and there is no reason to believe Art Peck will have any better luck.  Actually, even luck would not be enough to reverse the ultimate fate of this storied brand.

I say this because the brand was driven into ubiquity (the anti-cool for young consumers, and therefore, the beginning of its end) in the late ‘90s and first two years of the Millennium under the watch of then CEO, Millard “Mickey” Drexler.  With a Gap on every corner, so to speak, cool turned to cold and its descent began. Ironically, Drexler would leave the helm of the brand that he guided through two decades of meteoric growth from $480 million in revenues upon his arrival in 1983 as president, to almost $14 billion in 2000, an amazing 2,400 percent increase when he left.  Indeed, his success earned him the moniker of the “prince of all merchant princes.” Unable to right the ship when it started to sink, Drexler retired in 2002. Comp store sales dropped 5 percent in 2000, their first decline since 1989, and then a whopping 13 percent in 2001, with the overall Gap brand down 12 percent. [Read more…]

I’m Worth it!

Worth Summer Campaign_My House is More Than a HomeBrand’s High-Touch, High-Tech Service Business Model Attracts Busy, Fashion-Conscious Women

As the apparel sector gravitates toward cheaper products, relentless promotions, and declining service, a very different microtrend is taking hold. Direct-to-consumer luxury apparel company Worth Collection Ltd. is providing hands-on service with a high-tech twist — and no discounting.

When she answered the door at the Worth New York showroom on New York’s West 57th Street, Dana Kendrick took only a few minutes to size me up — literally and figuratively. “You’re a size 2,” she announced, “and you like classic, updated styles and dark or neutral colors.”

The stylist ushered me into a beautifully paneled room lined with racks of clothing samples from which she began to pull a selection of items. Then the questions started. Was I looking primarily for clothes for work or for social events? Have I thought about wearing color around my face? What are my most urgent wardrobe needs? [Read more…]

I’ve Got Mail!

Monitoring a year of Macy’s email…and living to tell about it.

First things first: My e-hat is off to all the programmers, merchandisers, web technicians, copywriters, graphic artists and digital geeks who run the Macy’s direct email program. Well done, guys. I am in a position to make this evaluation after what seemed a rather simple task: I would gather and save all the promotional emails Macy’s sent me as a customer over the course of one year. I began moving those messages rom my inbox to a separate folder on Jan. 1, 2014, and filed my last one at 11:46AM this past Dec. 31.

Simple my ass…ortment.

As a customer who had made home, apparel and jewelry purchases from Macy’s over the years, my inbox became a breeding ground for a promotional onslaught that neared biblical proportions. By any measure — quantity, variety, creativity or just plain audacity — my year with Macy’s email was memorable. First, the volume, which was indeed voluminous. I received an email from Macy’s virtually every day. Some days I received two. Occasionally, I missed a day, which I attributed more to spam filters than any lack of enterprise on the part of the store’s promotional department. [Read more…]

Is There a Serial Killer Loose in Your Corner Office?

serial_killerYou don’t have to be a criminologist to know that Serial Killers kill people. Retail Serial Killers (or RSKs) on the other hand, are, in my opinion, CEO’s who through their lack of skill, recklessness, disingenuousness, or gross incompetence, destroy the businesses they have been tasked to lead.

I believe that RSKs are the scourges of the retail industry. Businesses which have taken decades, if not generations, to become successful through the talent and hard work of dedicated teams, are murdered in short order by RSK’s. These RSK’s should never have been given the baton in the first place, or who, upon demonstration of lack of skill, should have been promptly removed from power when it became apparent they could not perform credibly. RSK’s are never indicted. In fact, they are often rewarded handsomely for their efforts.

Consider some of the retail industry’s most notable Serial Killers: [Read more…]

TJX Companies

Luxury Brands, Fast Fashion, Treasure Hunt, Localization, Super Value

Untouchable

tjx_1The TJX business model is not easily copied. In fact, one could make the case that the specific differentiators and advantages that have been crafted into its DNA cannot be duplicated, period. With the exception of Ross Stores, smaller and not a pure copycat, TJX Companies Inc. (T.J. Maxx, Marmaxx, Marshalls and HomeGoods) all but owns the so-called “off-price” space it dominates.

Hey, you guys in the other sectors, in the middle of the “perfect storm” of an overstored, intensely competitive retail environment, with omnipotent consumers driving you into the insanity of the retail share wars, you can only dream of being in such a position. [Read more…]

Jonathon Duskin Who?

Jonathan-DuskinActivist Lightweight Attacking Children’s Place

I like being an activist myself, but a special kind.  I like attacking financial activists who assume they understand the businesses they are attacking, yet build stories based on the only thing they do understand: numbers. These stories are all about creating greater shareholder value, but mask the real objective, which is to make tons of money for themselves. Sadly,  90% of them don’t know what the word strategy means and couldn’t operate their way out of a paper bag, much less lead the process. Most of them destroy more value than they create.

Which brings me to Jonathan Duskin, the current poster child activist lightweight, whose track record could only be described as “failing upward” as he became CEO of Macellum Advisors. Somehow he got Barington Capital Group to collaborate with him (I guess he needed their now questionable credibility) in sending an “attack” letter to Norman Matthews, revered industry veteran and Chairman of the Board of Children’s Place (PLCE). The delusional letter, penned by Macellum and Barington, was sent from out of the blue (or black) the night before Children’s Place’s 4th-quarter earnings call (March 12th), attacking the company’s operating and leadership performance under its CEO, Jane Elfers. The “delusional duo” of Macellum and Barington (the delusion revealed below), with a 2 percent share of Children’s Place, had not uttered a peep of discontent during any of the four previous investor calls throughout 2014 — or even two months prior to the attack letter. Perhaps Duskin was trumping up the delusion in a dark room somewhere before luring Barington into the deal?  Who knows? [Read more…]