WWD.com/globe-news/trends-analysis/fno-retailers-take-the-long-view-5131106/
government-trade
government-trade

FNO: Retailers Take the Long View

As far as generating sales volume and profit, Fashion's Night Out is questionable.

The crowded Via Montenapoleone

Fashion’s Night Out could be called Fashion’s Party Night Out.

This story first appeared in the September 10, 2011 issue of WWD.  Subscribe Today.

In terms of generating traffic, goodwill, fun and new customers, as well as kicking off the fall season, retailers, designers and brands couldn’t ask for more. As far as generating sales volume and profit, FNO is questionable.

“If you look at it over one night, you could say at best, it’s breakeven. But I don’t think any of us look at it that way,” observed Ron Frasch, president and chief merchandising officer for Saks Fifth Avenue. “A whole crowd of people came to our stores, who, quite frankly, may not have before.”

“People love events,” said Michael Gould, chief executive of Bloomingdale’s. “The store was hopping with events and special appearances. That’s what we’re about.”

Gould said Bloomingdale’s had a “good day” Thursday, particularly with the new Reiss and Zadig & Voltaire shops. Yet the amount of traffic is disproportionate to the business being done, he admitted. “Not every FNO event is conducive to shopping. For example, it’s hard to shop when you’re waiting on line for an hour or more to meet Rachel Zoe,” as visitors did at Bloomingdale’s. “This is a long game,” Gould said. “It’s not about one event or one night. There’s no question that FNO is very heightened for that one moment in time. The challenge is how to spread that out for the rest of the year.”

“I don’t think Fashion’s Night Out can be judged by just the one night,” added Brendan Hoffman, chairman and ceo of Lord & Taylor. “It exposed people to the store who otherwise might not have come here. They could come back and spend more.”

Thursday night’s event, Hoffman observed, was “overwhelming with the crowds — we didn’t quite get the same uptake in business. Certain floors were just too crowded.”

Putting an evening of events filled with celebrities, designers, performers, DJs, hors d’oeuvres, as many big retailers did, “is a lot of work,” Hoffman said. “There is an expense to get that kind of traffic through the doors, but I feel it’s worth it, and my team loves it.”

However, some executives were quite blunt about the level of business seen. “There’s no buying,” said Bud Konheim, ceo of Nicole Miller. “FNO is not a commercial retail event. FNO is a hype where anybody can go and get a free drink in any store in New York. What does it do for business? Nothing. FNO doesn’t move the needle, but it adds to the perception that fashion is fun. We have to make people feel good or else we’re out of business. In terms of the money we spent on FNO, we didn’t get it back.”

As one retail ceo said, “If Anna takes a year off with this, I wouldn’t complain,” referring to Anna Wintour, Vogue’s editor in chief who spearheads FNO. (Nonetheless, the ceo requested anonymity.)

But Macy’s would be on board. “It’s an incredible marketing event,” said Martine Reardon, Macy’s executive vice president of marketing and advertising. “It gives us an opportunity to showcase our fashion credentials.”

Macy’s plans FNO at Herald Square and other flagship locations six months in advance. Asked if it’s worth all the effort, Reardon replied, “Absolutely. There are many objectives. Certainly you want to get the sales. That’s why it was created, to give people a reason to go shopping again and to [revive] that social kind of shopping experience department stores saw many, many years ago. The Macy’s stores that really had a concentration of events, like Herald Square and Chicago, definitely performed better than stores that didn’t.” While the crowds were big and many were there just to check out the entertainment or grab a free drink, “there was a heck of a lot of shopping,” Reardon said.

Manhattan’s Meatpacking District was one “big block party,” said Susan Davidson, ceo of Scoop and Zac Posen. “At first, we were afraid there wasn’t going to be shopping, but at the end of the night, the numbers came in and business was great.”

“It brings a lot of attention to our industry,” said Frasch. “The challenge is it’s becoming a little competitive. There’s enormous amount of preparation and work that goes into it. By going forward, we will have to keep planning further and further ahead.”

Saks’ flagship shut down some selling space early in the day, sacrificing some business, to set up for entertainers including Ne-Yo, and also got cast members from “Glee” in the store. Lord & Taylor’s Fifth Avenue flagship drew more than 15,000 shoppers in five hours. Candy Pratts Price, creative director for vogue.com, unveiled the store’s Fifth Avenue windows she curated with customer-submitted photos of the city. Solange Knowles DJed her favorite tunes, and there was a mob scene for Ivanka Trump, who took photographs with customers and signed the bottom of shoes from her new collection. By the front of the store, the New York Jets Flight Crew Cheerleaders shook it up and signed calendars.

Macy’s brought Joss Stone to Herald Square Park for a short concert, and Amar’e Stoudemire and Rachel Roy came to the Impulse contemporary department to greet customers and promote the collection they’ve done together.

But Barneys New York abstained from any entertainment or hoopla and saw a 35 percent lift in sales. “Whereas during the last two FNO events, Barneys led with innovative entertainment and designer participation in activities such as karaoke, musical chairs and Ping-Pong, we want this year to refocus all of our efforts on the shopping experience, which was the original impetus for FNO, and in turn raise the highest possible donation for a worthy cause on this solemn anniversary,” said ceo Mark Lee, noting that Barneys contributed 10 percent of sales to supporting the National September 11 Memorial and Museum. Alluding to opportunistic FNO party-hoppers, Lee said he wanted to “do something for our true customers as opposed to seekers of entertainment.”

“It was less traumatic than previous years,” said Rogan Gregory. “I don’t know how good it is for all stores, but we had a reasonably successful FNO. It was worth it.”

At the Missoni boutique on Madison Avenue, a 25-foot tall robo doll designed for the Missoni for Target launch, and Rosita Missoni were the draw. “We had customers and they bought ready-to-wear,” said Diane Levbarg, executive vice president. “This is our third FNO, and it was the best.”

Bernard Aiden, ceo of Catherine Malandrino, said FNO “had a great effect, not just in terms of selling but for creating a great atmosphere. We got new customers who discovered the brand.” Sales were double last year’s. “It’s definitely a valuable investment,” Aiden said.