Retail executives at the final day of Goldman Sachs’ Eighteenth Annual Global Retailing Conference offered, at best, a tempered outlook for investors.
Kevin Mansell, chairman, president and chief executive officer at Kohl’s Corp., said the retail climate had “turned really negative” over the past two months and Douglas Scovanner, executive vice president and chief financial officer at Target Corp., said the bottom line was being impacted by sales that are “more challenging” than predicted at the onset of 2011.
But Terry Lundgren, chairman, president and chief executive officer, Macy’s Inc., might have summed up the prevailing retail mood best: “I guess you can say that we’re planning a slowdown, but not a significant one. And that’s the trend that we’re buying into.”
Here are highlights from the second day of the two-day conference, including what Neiman Marcus and Target have in common.
Kevin Mansell, chairman, president and chief executive officer, Kohl’s Corp.
• “Things have turned really negative in the last 60 days. We definitely see differences in the way our customer is behaving. Our proprietary [credit] card customer, who is really a loyal customer, has actually stayed pretty loyal. Our noncard customer, who typically is a more infrequent shopper and probably a little less loyal…they’ve really dramatically reduced the number of visits and the number of transactions they make.”
• “The mall generally is a more promotional environment than it was a year ago.”
Terry Lundgren, chairman, president and chief executive officer, Macy’s Inc.
• “A lot of what is really working for us is newness….We’ve been injecting a lot of personal appearances and activities. You tell a 12-year-old girl that she can’t have her Justin Bieber fragrance, and good luck with that. She’s going to convince you otherwise.”
• “When you’re talking about 5 percent, 6 percent, 7 percent [price increases] on top of a $30 blouse, you’re not talking about a decision, ‘I’ll buy it, or I won’t buy it,’ for the most part, at least for the Macy’s consumer.”
Douglas Scovanner, executive vice president and chief financial officer, Target Corp.
• “We are far more heavily concentrated from a sales standpoint among our very best guests than anybody else at mass. We look more like Neiman’s, or Saks or Nordstrom in that sense. Ten percent of the households who shop with us drive almost half of our sales. And those aren’t households that split neatly along income lines; it’s by no means the best 10 percent of our households by income.”
• “Our growth in sales is clearly a bit more challenging than we had expected at the beginning of the year. And that, obviously, has an adverse effect on the bottom line.”
Richard Dickson, president and ceo of The Jones Group Inc.’s branded businesses
• “Acquisitions are not front of mind today….I would think now that [stock] buybacks would really be first.”
• “We’ve taken the luxury piece of our business, which four years ago was less than 1 percent of the business, now [it’s] on a full-year run rate with Kurt Geiger that’s about 15 percent.”
• “Jones New York…is probably the most important brand in terms of the revitalization project. It’s in a traditional space, which right now is also challenged. We’re in slow moving boat, and we are not alone.”
Dennis Secor, chief financial officer, Guess Inc.
• “We’re not assuming there’s a significant improvement nor a significant deterioration [in macroeconomic conditions]. And our strategy, particularly in North America, has really been to focus on full-price selling. We are planning on not seeing positive comps for the balance of this year, either here or in Europe.”
• “Last year, we did a lot more promoting and a lot more markdowns than we wanted to do, and we did more of it than is really appropriate for our brand. So I think that’s one of the catalysts….We’re in it for the long term, and the actions we’re taking are really going to help both build and preserve the brand for the long term.”
Neil Cole, chairman, president and ceo of Iconix Brand Group Inc.
• “The consumer is still out there consuming, pretty much top to bottom. We’re seeing from the luxury segment down to the mass segment [that] business is OK, [and] we’re on track for a record year and pretty excited about the opportunities.”
• “We have tremendous abilities to purchase [intellectual property] today, having a pretty delevered balance sheet and a lot of what we call gun power to do it.”