Retailers are sharpening their axes and looking at their store bases.After a tough holiday season with often-dismal foot traffic in stores, executives at the annual ICR retail conference said they were going over the fine print on their leases or planning to just let many of them expire — or use that as a negotiating point with landlords — as they seek to right-size operations.Macy’s Inc. said last week that it would close 63 doors this spring under a plan first laid out last year and Sears Holdings Corp. is shuttering another 150 stores.That looks like just the beginning of what’s going to be a rush of store closures from retailers of all stripes.Investment conferences tend to include a lot of posturing and chest-thumping growth strategies, but the latest outing to ICR showed a more sedate retail crowd, favoring a toolkit heavy on closures of one sort or another, expense cuts and just about anything to drive business online.“It's a very tough environment out there,” said Sandeep Reddy, Guess Inc.'s chief financial and accounting officer. “And it's true also that it's expected to be tough for the coming years as the environment is continuing to be a very difficult one for most players in the marketplace.”Reddy noted that the company, which just cut $25 million from its global expense structure, gets 60 percent of its revenues from overseas, helping to make up somewhat for weakness in the U.S.“With traffic being the headwind that it is for just the business in general, we really have to focus on the cost side to actually squeeze more profitability out,” he said.The company’s closed about 50 stores over the past couple of years, leaving it with a base of 450 doors that could be cut by another 50 stores over the next 15 months, Reddy said.“If realized, that's about a 25 percent reduction in our store count in a three-year period," he said. "The good news for us is we have a lot of flexibility in our leases, and we are able to actually get out over a number of stores through lease expirations over the course of the next few years. What's happening is when we go into landlords and explain that the economics to make sense, we may have to get out, they are actually looking with us on the rent reductions.”Theoretically, the company can trade revenues for a boost in profitability and better returns on invested capital.The calculus is much the same at American Eagle Outfitters Inc., which has 550 doors with leases that expire over the next three years. Chief financial officer Bob Madore told analysts on Tuesday that, “We will definitely see a decrease in our U.S.-based real estate portfolio over the ongoing years, particularly, as traffic gets more challenged in some of the C locations.”But even solid store portfolio’s are being scrutinized.Frank Conforti, Urban Outfitters Inc.’s cfo, said out of the company’s nearly 600 stores, only two of them are unprofitable.Even so, he said the migration of more business to the web has the company looking at its store base and that Urban Outfitters and Anthropologie would probably have fewer doors in five years — although some of the existing doors could be replaced with larger locations.“I think with Urban, we'll probably open in the ballpark over the next three years, two to three new stores, but…will start to bring the unit count down just a little bit,” he said.Stuart Burgdoerfer, cfo and executive vice president of L Brands Inc., also acknowledged the weakness in the market, although the company’s Victoria’s Secret brand was set for a tough year as it exited swim and apparel to refocus its business.“It certainly seemed to be a somewhat more challenging macro environment,” Burgdoerfer said. “How much was election? How much was calendar? How much was the ongoing changing nature of gift giving? How much is the ongoing change of brick-and-mortar retail versus all these cardboard boxes showing up on doorsteps? A lot of dynamics for sure.”But the broader business of retail also hasn’t changed.“What matters most in this business is about the merchandise,” he said. “You've got to have compelling brands and great categories, which we think we do and then the next most important thing is how do you have a regular flow of compelling new items for her merchandised in-stores and online in a way that where she says, ‘I just got to have that,’ and that's where we're focused on,” Burgdoerfer said.
For its next men’s wear collection, @roberto_cavalli will show as a special guest at #PittiUomo, running from June 12-15. The brand, which has Florence in its roots, will relaunch its men’s wear collection, which will be presented separately from women’s wear for the first time since Paul Surridge was appointed creative director in May. #wwdnews #wwdfashion (📷: @aitorrosasphoto)
“I was making the guacamole when my scout saw me,” says model @stuckinteenage on being discovered just six months ago while working at @chipotlemexicangrill. Since then Williams has signed with @dnamodels, walked in her first show at @calvinklein and landed on the cover of @vogueitalia – a high point of any model’s career. To read @lisajlockwood’s full interview with the model on her experiences thus far, head to WWD.com – link in bio. (📷: George Chinsee)
“I love the idea of dialogue, period. It’s where I’ve always gotten my inspiration from: hearing other women speak, their journeys and their paths,” said @hereisgina, who delivered the keynote speech at the @sxsw conference for @createcultivate, the online platform and conference series for women. For her two panels, Rodriguez chose female empowering, female-led and female entrepreneurs to focus on. Head to WWD.com to read more about her thoughts on Time’s Up, growing up in a family of women and why we “need a girls’ club.” #wwdeye #sxsw (📷: @jgreenery)
Leading luxury brand are shaking things up to keep up with streetwear. Case in point: the arrival of @mrkimjones as artistic director of @diorhomme. Jones, who succeeds @Kris_Van_Assche, is seen as one of the handful of designers who can actually straddle the luxury and streetwear worlds — which could lead to even more changes at established brands. What could this mean for the rest of the menswear landscape? Head to WWD.com to find out what experts predict #wwdfashion (📷: @franckmura)
“It’s like buying groceries. You’re going to buy the best mango, the best mozzarella, the best things. You have to, or others are going to take it all,” said @gabrielahearst on why she uses only the finest fabrics. Last week, Hearst received her first @cfda nomination for Womenswear Designer of the Year, and earlier this month she opened a permanent showroom in Paris. To read @jessiredale’s interview with the designer and find out why this is shaping up to be a big year for her, head to WWD.com. #wwdfashion (📷: @francoisgoize)
“It’s an interesting thing, playing a younger version of your mother. It’s an interesting concept. I adore my mom and love her in every capacity, but it was just something that had never crossed my mind,” says @anniemstarke on playing a young Joan Castleman in “The Wife.” The same role will be played by her mother Glenn Close. Read more about her growing up in the film industry as the daughter of producer John H. Starke and Close and what she has planned for the future #wwdeye (📷: @nataliamantini)
@asics is launching a new streetwear sneaker inspired by its latest ambassador, @steveaoki. The Hyper-Kenzen x Aoki, which will launch at @footlocker stores exclusively tomorrow, is a slip-on style that incorporates the brand’s proprietary Gel technology through beads integrated into the midsole for comfort and endurance. Read the full story on WWD.com.