Magazines Archives - 2008 March

WALL STREET analysts looking at retailers on track for growth have named J Crew, Justice, Zumiez, Delia’s, Holister, Urban Outfitters, aerie and Gymboree “hot retailers”. Left out were major big-box operators, although Wal- Mart got Wall Street’s nod for its commitment to sustainability and green initiatives. It also gained plaudits for achieving better performance at Christmas than arch-rival Target.

Wall Street expects more store closures to follow those planned by Macy’s, Gap and Zale, with Ann Taylor revealing it would close up to 140 stores after NRF 2008. Starbucks, too, said it would close 100 “underperforming stores” in the US and would scale back domestic openings this year from the 1,600 target to 1,175. However, it is going ahead to open 75 more new stores than intended abroad, bringing the international count to 975.

Bryan Tunick of JP Morgan placed the past year’s closedowns nearer 5%- 6% than the yearly 2%-3% norm, while Citigroup’s Deborah Weinswig saw the “slowing square-foot growth” as suggestive of a reaction to the slowdown in retail sales.

Analysts also lamented the lack of enthusiasm for new store concepts by established retailers, pointing to the closedown of the newer Forth & Towne, Martin + Osa; D.e.m.o. and Bigelow’s.

Touche Ross research director Ira Kalish said at a session: “We are already seeing a major slowdown in consumer spending [in January].” His list of top retail trends to watch in 2008 included: ¦ Growing emphasis on issues linked to environment and safety in food and general merchandise; ¦ Increasing sales of services such as Best Buy’s Geek Squad, which offers in-home technical support; ¦ Increasing commoditisation, accompanied by shrinking margins; ¦ Rising quest for unexploited niche markets, especially at the high end; ¦ Greater multichannel integration, with more e-tailers investing in actual stores.

At a separate session, outgoing NRF chairman Farooq Kathwari, chairman/ CEO of home-furnishings chain Ethan Allen, told the group: “Tough times create an opportunity to gain market share.” But he warned: “Don’t pursue sales at the expense of margins.”