NEW YORK —Get ready for another promotional melee.
Depressed holiday sales have retailers still lunging at skittish consumers with coupons,two-for- one deals and markdowns of 50 percent or more,as they seek a final lift in the week between Christmas and New Year ’s.
Aside from two short shopping surges —the Friday and Saturdayafter Thanksgiving and two to three days before Christmas —sales were almost universally disappointing this holiday eason.Wal-Mart,Target,Sears,Roebuck, and Federated Department Stores have all reported that business fell either under or at the low end of their revenue goals.Specialty chains have also been sluggish.
It is believed that 10 percent of holiday ales happen between Christmas and New Year ’s,leaving ome hope for improvement,particularly ince it ’s been a record period for gift certificates and electronic gift cards.Consumers will be in the stores for the next week to redeem them for merchandise and potentially purchase some more.Low- single-digit fourth-quarter sales gains,at best,are being projected by stores and Wall Street analysts.
This season could be a wake up call.Retailers have been obsessed with cutting prices,but the strategy in itself doesn ’t seem to be working given the lack of shop- ping.It ’s been creating a sense of desperation,obscuring any real values,and distracting from what retailers should focus on — innovative product..
"What’s so unfortunate is that o much of retailing is about price,and not about product,"stated Howard Socol,president,chairman and chief executive officer of Barneys New York."People are more focused on the lowest price.I am not ure it ’s a winning trategy.For sure at Barney ’s,it ’s not a winning strategy."
"The season was not a urprise,"said Hal Kahn, chairman and ceo of Macy ’s East,a division of Federated."Business came in on the low side of our expectations.With the economy and the lack of newness in terms of product classifications,there wasn ’t enough reason for people to buy.In prior years,there were many more new items and key items to compel people to buy at a more aggressive clip."
While Macy’s and other Federated divisions have been aggressive price promoters,Kahn said,"the lesson to be learned for all the naysayers is that when the product is right,when the price is right,customers will shop the malls and the stores.I continue to urge all of us to stay focused on what drives customers to tores — fashion newness,excitement and value in our offerings."With some stores and manufacturers,there has to be reevaluation of those relationships,so that it combines financial self-interests and takes into consideration true development of relevant product,newness and intelligent risk-taking,"aid Arnold Aronson,managing direc- tor of retail strategies for Kurt Salmon Associates.This season,"Everybody was so scared about business,they took the safe way out.Most people were playing more to avoid losing,than playing to win.Markdowns were probably very well managed,bringing ome margin relief. There was a much bigger percentage of pre-planned promotion where margins get built in with the help of ven- dors,but you can ’t have big store-for-store decreases and expect that margins can maintain themselves intact."
On the bright side,ome higher-end stores,including Barneys,Bloomingdale ’s and Bergdorf Goodman said Tuesday that they were pleased with holiday results, suggesting a pickup in luxury sales due to tock market gains and pent-up demand,and improved traffic in the New York area,relative to last year ’s post-9/11 downturn.
J.C.Penney led the big chains."It ’s been a more promotional Christmas,no question about it,"observed Vanessa Castagna,chairman and ceo of tores,catalog and Internet."But there was a balance to our promotional efforts,which were much more trategically planned and competitive.We are pleased with the holiday eason,and the week after Christmas will be very important.Castagna cited Penney ’s centralized merchandising for being in stock on most wanted items, being more trend right,a new gift strategy,and customers noticing the changes,as reasons for results that lead the pack.Among the best performing categories: casual fashion apparel,velour,hooded fleece,bright sweaters,leepwear and intimate apparel,girls and boys wear,and gifts for the home,uch as crystal,which the chain didn ’t sell a year ago.
Other strong categories included:jewelry,outwear and cold weather accessories,handbags and small leather goods,robes,leathers,uedes,men ’s accessories and contemporary sportswear.Online sales gains were substantial.
Perhaps most importantly,retailers nationwide planned conservatively,kept inventories under control, making it an easy transition into pring merchandising, which should really kick in during February,and cut expenses.Therefore,the outlook for profits isn ’t as de- pressed as sales,and are seen at least twice as high.
"Retailers planned staffing and overhead on a very lean basis,"Aronson added."Stores found every way to be able to conserve on expenses,not only by outright elimination,but certainly through deferrals,like maintenance,renovations,new tore plans,openings,pre- opening expenses.Things have been pushed back.""It was a difficult season,"said Helene Fortunoff, president of Fortunoff Fine Jewelry and Silverware Inc. She said Fortunoff ’s did keep expenses down,with the store staff no bigger than it was last year when cuts were made in response to the 9/11 downturn.She did stress that he was impressed by how hard the staff worked,and that the company made its plan.It was a combination of people "pulling together "in the spirit of cooperation,and also wanting to insure their ongoing employment with Fortunoff ’s."If people can ’t find the service,or can ’t get something checked out,they ’ll just walk out the door and not come back," Fortunoff said..
Projections for industry sales overall call for low-single- digit gains,generally around 2 to 3 percent,with a most optimistic outlook coming from the National Retail Federation."We are till predicting a 3.5 to 4 percent range for an increase,"Tracy Mullin,president of NRF,said Monday."I haven ’t een anything to make me think it will be much off that mark.The difference that we see this year is that more of the promotions were planned," helping profits."Last year,retailers were slashing prices without regard to the holiday plan to get goods out of the stores."
Macy ’s,Bloomingdale ’s and other Federated divisions seemed as promotional as ever,though Kahn said,"Some retailers reacted to a lide in their business.Our promotions were planned.We continued our thrust to eliminate coupons.We had fewer coupon days in December than a year ago,and we continue to tress a more implistic pricing strategy that would offer value to all our customers,though I don ’t think we are there yet.There are certainly a lot of tores promoting like crazy.The economy,fear of war,gasoline prices,and the continued down- sizing of corporate America and layoffs have affected the business in a major,major way.The consumer is very concerned,but even with a robust economy,we still need more creative offerings and more fashion."
"I am very concerned about what happens after January."
He ’s not the only one.Ernst &Young LLP says growth may not be much better.E&Y expects that U.S. retail sales will grow 2 to 4 percent in 2003."The struggling US economic recovery and high consumer debt loads will moderate consumer pending,"E&Y said in a statement."Price deflation —which in the U.S.is based primarily on high productivity growth,not a reduction in consumer demand —also will be a key factor in 2003. The need to improve upply chain efficiencies will take on even greater importance in this deflationary environment.With unemployment rising and consumer debt at a very high level,consumers will be more reluctant to spend in 2003.However,price reductions in many merchandise categories will keep consumers spending enough to drive a small increase in retail sales."Socol aid Barneys,except for the first week of December,operated at regular price for the month."We will finish in the low double digits,"for the month,Socol said."We were very consistent throughout the month,no highs or lows.It was a very good margin month."
Part of the increase could have been from last year ’s depressed season due to 9/11,but Socol tressed it stemmed mostly from intensified marketing of growth categories,including accessories for men and women, as well as dress shirts,and shoes,where Barneys has also increased space.Also,he said Barneys Co-op busi- ness for denim and contemporary sportswear and new flows of resort goods,were really well received."There is a whole push at Barneys to bring new goods in for the fourth quarter and sell forward looking things."
Michael Gould,chairman and ceo of Bloomingdale ’s, said he felt very good about the November-December period,particularly results in contemporary sportswear, cashmere,certain designer lines in men ’s and women ’s, kids,cold weather apparel and accessories.
Looking at the bigger picture,Gould said,"In my 11 1/2 years,I ’ve never been so optimistic about Bloomingdale ’s and its direction as it relates to clearly differentiating itself as a bridge department tore.I think we are on the right course,we ’re executing better, we are raising the bar on our tandard —our people ’s standards and our merchandise tandards.Our num- bers are at the top of the pack.I feel good about that, but there is always a lot of room for improvement.
"The season wasn ’t any tougher than I thought it was going to be,considering there were six less days,the eco- nomic uncertainty and all of the world political and se- curity issues.We were less promotional.We have a lot of newness.I feel very good about that.That being aid,my attitude is we performed better than my competition." Asked if the store will make its plan,Gould replied:"We had a number of plans.We ’ll make our revised plan."
Ron Frasch,chairman and ceo of Bergdorf Goodman, said,"Business wasn ’t as difficult as we had anticipated be- cause the first couple of weeks [after Thanksgiving ]were o strong.There was a very high interest and demand in luxu- ry goods,even unusual luxury goods.So many customers had not bought clothes for o long.We had a pretty good performance on resort clothes,clearly elf-purchases in- ventories are in good shape.We stuck to strategy."Frasch also emphasized some new trategies and spe- cial items."We ’ve worked hard on making the store an en- joyable place to hop,"by tepping up the special events, such as designer appearances,book signings,bringing Santa Claus in for the second year,musicians,refresh- ments,and greeters at every escalator landing."Some days we might have had two or three events," Frasch said..
On the item side,a Jay Strongwater signed picture frame and vintage Christmas ornaments,were empha- sized,and around mid-November,the store launched its "Very Bergdorf " advertising campaign,with ads in the New York Times ix days a week.They featured items, not prices,over a wide yet exclusive range of luxury gifts. "We think the strategy to make ourselves a little more dis- tinctive worked.We adopted a kind of hopkeeper men- tality,"Frasch aid."We can ’t win on price.We can ’t go that road.At the end of the day,it ’s about product and it ’s about ervice.I ’ve enjoyed this Christmas.Everybody in the store came together.As a manager,that ’s a big part of what you are doing for a living."
Taubman Centers on Christmas Day said traffic was ex- ceptional Monday,and cited its Beverly Center mall in Los Angeles,where the automobile count was up 31 percent, compared with last year ’s Monday,which was Christmas Eve.Karen MacDonald,director of communications at Taubman reported that jewelry,teen apparel,gifts,and specialty foods were where consumers were largely gravi- tating toward.However,echoing what everal other retail- ers said,gift certificate sales may have led the field,with many centers saying the category ran 25 to 50 percent ahead of last year.Woodfield Mall in Schaumburg,Ill,was up 30 percent in gift certificate sales for Monday alone.
MacDonald did note that traffic was lighter than ex- pected on Tuesday on average,with parking lots 75 to 80 percent full.The West Farms Mall in Farmington,Conn., another Taubman property,reported that ome stores began after-Christmas sales on Tuesday.
"There will lines outside the department tores Thursday because holiday decor will be marked down between 50 and 75 percent,"MacDonald predicted. "Many hoppers will want to take advantage of the addi- tional markdowns,but decor is always the first to go."On the West Coast,"In the last few days business picked up,but not enough to make it more than a disap- pointing Christmas,"said Macy ’s West chairman and ceo Robert Mettler on Tuesday.Even stores in Hawaii,a region that has uffered from its own economic prob- lems caused by the drop off in tourism travel post-Sept. 11,outperformed stores in California,he added.
At Macy ’s,fashion won out over the classics with Juicy Couture velour track uits,Seven jeans and women ’ trendy costume jewelry leading the way."Traditional men ’s and women ’s has been difficult," Mettler said..
Outerwear started out of the gate at a good pace,no- tably denim coats lined with fur,and sherpa coats.But the category slowed.
Mervyn ’s et a promotional tone for the season when it offered two-for-one deals,$5 to $10 cards given out to the first 350 to 700 people per tore the day after Thanksgiving."Shoppers were looking to buy items on sale,"aid Leanne Furman,a pokesperson,also noting traffic had picked up the last few days of the season. Mervyn ’s aw increases in mock turtlenecks,V-neck sweaters,romantic tops and costume jewelry.Velour track suits and fleece items were also uccessful,partic- ularly in colder regions of the state.
Traffic appeared brisk at Nordstrom ’s,according to spokesperson Pamela Perret,Best-sellers included Rayure form-fitting white blouses,camisoles with match- ing boy-leg pants from Ariane and Natori,Juicy velour track suits,Malo cashmere track suits,as well as wash- able suede jackets and car coats with patch pockets.
At Elder-Beerman Stores,sales were on plan and flat through Christmas Eve,according to Bud L.Bergren, president and ceo."We planned the season conserva- tively and went into it with inventories that were at least 10 percent leaner than a year ago."
Bestsellers were women ’s moderate apparel,acces- sories,outerwear,domestics such as sheets and blankets and beauty products from J.Lo,Estée Lauder and Lancôme.The weakest spot was women ’s and men ’s better apparel.Post-Christmas price tags will slashed by at least 50 percent on clearance merchandise,added Bergren.
Online retailers and retailers with e-commerce chan- nels had a very good Christmas,according to TechStrategy Research analyst Carrie Johnson.After a rough third-quarter,online retail rallied in the final quarter of the year and consumers are now on track to spend a projected $9.5 billion between Thanksgiving and Christmas,wrote Johnson,in a research note. Moreover,online retailing is expected to achieve or ex- ceed TechStrategy ’s quarterly forecast of $20 billion.Johnson attributed the online success to a combina- tion of factors.First and foremost,consumers started shopping online early this year.Free shipping and the shortened shopping eason were the key lures,with a survey by Shop.org/BizRate.com indicating that nearly one-third of all online shoppers finished their holiday shopping by Dec.3.
The big sellers were low-ticket items uch as DVD ’s and music,while higher-ticket consumer electronics were taking a hit.Jewelry,as well as home and garden items,did very well,with ales advancing 79 percent compared to the same period last year.
Another important element was that retailers pushed cross-channel hopping in news ways,wrote Johnson. To take advantage of the season ’s offline promotional frenzy,retailers relied heavily on multichannel market- ing,using catalogs and offline flyers to induce online purchases.For example,J.C.Penney offered shoppers the ability browse through weekly store circulars. Concurrent e-mail and catalog mailing also helped to drive online traffic.
—With contributions from Kristin Young in Los Angeles and Rusty Williamson,Dallas
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast