By Evan Clark
with contributions from Vicki M. Young, Kali Hays
 on January 9, 2018
A car drives by the entrance of a Kohl's department store in Orlando, Fla. Retailers are trying to step up their game online and in person for the winter holidays, from dangling more discounts to livening up their stores. Kohl's says it's trying to woo new customers by making it more simple to shop, including being more clear about possible savingsRetail-Holiday, Orlando, USA - 22 Aug 2017

Fashion companies with something to crow about were only too happy to take the stage at the ICR Conference in Orlando, where public companies wrapped up their public presentations Tuesday.

Kevin Mansell, chairman and chief executive officer of Kohl’s Corp., talked about driving foot traffic, fulfilling 38 percent of online orders from stores in December and thinking differently.

Robert Madove, chief financial officer of American Eagle Outfitters Inc., pinned a strong holiday season partially on solid online sales and said the channel might ultimately account for half the company’s business.

And Wayne Miller, chief operating officer of G-III Apparel Group, mapped out his company’s pathway to $5 billion in revenues.

After the market closed, Nordstrom Inc. weighed in with a 1.2 percent gain in comp sales for the combined November and December period, reflecting improvement in the company’s full-line and Nordstrom Rack stores, as well as growth in its e-commerce business.

The department store also pegged its full-year earnings per diluted share at $2.90 to $2.95, the high-end of its prior guidance calling for profits of $2.85 to $2.95.

Despite talk of growth, investors remain on guard. On Tuesday, shares of Kohl’s inched up 0.2 percent to $57.02, having risen 4.7 percent on Monday on word of holiday growth, while American Eagle slipped 3.2 percent to $17.38 and G-III decreased 2.5 percent to $38.87. Shares of Nordstrom were flat at 47.89 in after-hours trading, having slipped 0.8 percent in regular trading.

After a tough start and tepid summer and back-to-school, the retail world woke up during the holiday season, although by all accounts, the massive changes sweeping through the sector are going to keep coming as consumers decide the optimal mix of clicks and bricks.

A WWD spot check of 11 major retailers weighing in with holiday comparable sales so far showed eight companies posting gains, and in the case of American Eagle (up 8 percent) and Kohl’s (up 6.9 percent), heartening ones.

Meanwhile the decliners — Bon-Ton Stores Inc., Ascena Retail Group Inc. and Chico’s FAS Inc. — signaled that the struggle continues in the mall and among specialty concepts seeking to stand out to the consumer.

The companies gaining ground appear to be benefiting from changes in organizational structure, processes and mind-set that have been in the works for some time or, in the case of G-III, an acquisition.

Mansell, who will hand the ceo reins over to Michelle Gass in May, pointed to the company’s initiative to let Amazon customers drop off their returns at Kohl’s.

“It’s being embraced,” Mansell told analysts, referring to the program. “But really the point I’m trying to make with the Amazon pilot is just another signal to you that we’re going to continue to innovate. We’re going to continue to think out of the box or are going to do things that might be out of the ordinary for Kohl’s.”

The company, which is focusing on driving traffic and beefing up operations, had a slow start to 2017 and saw some improvement in the second quarter and a little more momentum in the third.

“We had a significant acceleration in the period we just finished,” Mansell said. “We’re starting to feel better that more and more of our performance in the holiday was based on company-specific actions that we took.”

He said Kohl’s online business grew by 26 percent during the holidays, but that the company’s stores remain the centerpiece.

“Our stores are our biggest asset by far, and therefore, remain our biggest opportunity,” Mansell said. “We did post positive comps in our stores in the holiday period.”

AE Studio at Union Square.

American Eagle Studio at Union Square.  George Chinsee/WWD

American Eagle’s Mandove attributed the company’s holiday sales to a “phenomenal digital performance,” as well as to quality of product and strength of its American Eagle and Aerie brands.

The cfo said 93 percent of the company’s locations are “cash-flow positive on an after-tax basis.” There are about 600 doors where the company will have to decide whether to renew store leases. Those leases that are renewed might require remodels, which Madove said would incorporate elements from its Union Square concept store in Manhattan that it is testing. Once the concept is finalized that will serve as the basis for a refresh of part of the fleet.

Madove also noted that tax reform would give the company a boost. American Eagle expects incremental free cash flow of “$60 million plus,” which is “going to drive earnings per share improvement in the range of 17 to 20 percent on a full-year basis for the next fiscal year.”

Part of that money will be used to reinvest in the business, including the remodeling of some stores. He noted that the company might choose to get aggressive in store closures as a defensive move, as well as invest more in growing Aerie as an offensive one.

He also spoke about digital trends, noting that online accounted for 25 percent of the business at the end of the third quarter, with Aerie posting a digital penetration of 40 percent. Madove also predicted that “five years to seven years from now, [digital] could represent roughly 50 percent of [our] total company revenues and sales.”

G-III is also charting out a positive trajectory.

Miller said during the conference that the company expects to eventually grow to $5 billion in revenues from $3 billion, aided by its acquisition of the Donna Karan and DKNY brands.

Emily Ratajkowski DKNY

Emily Ratajkowski in DKNY Intimates spring 2017 campaign. 

“The focus for at least the next 12 months is internal growth and less on [mergers and acquisitions],” Miller said.

The “pathway to $5 billion” is mainly laid with sizable expectations of growth for G-III’s marquee brands, including Donna Karan and DKNY and Vilebrequin, but also Karl Lagerfeld Paris and Calvin Klein and Tommy Hilfiger, which it owns licensing rights to through a deal with PVH Corp.

G-III’s Calvin business is projected to grow to $1.5 billion from $1 billion, Hilfiger and DKNY each are expected to hit $1 billion from $300 million, Lagerfeld to hit $500 million worldwide, of which about 20 percent would go to G-III, and Vilebrequin is expected to hit $250 million from $80 million.

While some of this growth will be coming from wholesale in North America, G-III is also planning to expand internationally for the first time, with the Donna Karan brands leading the way.

“In Europe, we have an office in Milan that we’re working closely with to establish some real opportunities to grow and we also have some great distribution partners. We’re looking to expand the business, and in the past six months we signed up the guys that did Tommy Hilfiger in China to do DKNY and Donna Karan in China,” Miller said.