Retailers searching for momentum in the digital age aren’t necessarily putting their money where their e-commerce is.

This story first appeared in the May 27, 2014 issue of WWD. Subscribe Today.

A study of capital expenditures conducted by analysts at Wells Fargo Securities found that, while capex among a large sample of retailers increased 8 percent last year over 2012 levels, amounts earmarked for e-commerce and information technology dropped 2 percent among the 14 companies that disclosed amounts for both years.

Wells Fargo also found that IT/e-commerce investments among specialty and department stores and branded apparel and footwear companies expanded more rapidly than among hardlines and “healthy lifestyle” companies last year. But the trend appears to be reversing in 2014, perhaps a result of the latter group seeking to close the investment gap.

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Last year, Target Corp. led the retail group in tech-related expenditures with 57 percent of total capex, although Canadian operations were excluded due to the effect of the firm’s entry into Canada. Among retailers selling apparel, Kohl’s Corp. ranked second with 45 percent, American Eagle Outfitters Inc. third at 29 percent, Nordstrom Inc. fourth at 27 percent, Vera Bradley Inc. fifth at 26 percent, Ross Stores Inc. sixth at 22 percent and L Brands Inc. seventh at 20 percent. Wal-Mart Stores Inc. reported 19 percent, as did Ralph Lauren Corp. and Ann Inc.

Among the lower levels of tech spending were Burlington Stores Inc. (13 percent of capex), Vince Holding Corp. (9 percent), J.C. Penney Co. Inc. (7 percent) and, at the lowest reported level, Gordmans Stores Inc. (6 percent).

The largest increases in tech capex last year came from American Eagle, 148 percent; Ross, 100 percent, and Nordstrom, 57 percent. Penney and Wal-Mart last year cut their tech capex by 49 and 13 percent, respectively.

Transparency on tech capex remains the exception rather than the rule, although the trend is clearly running in favor of disclosure. The number of firms in Wells Fargo’s coverage universe disclosing IT and e-commerce investments rose to 19 last year from 14 but still makes up just 35 percent of the companies covered. Among the specialty and department stores and branded apparel and footwear companies, the percentage disclosing capex for their tech expenditures rose to 43 percent last year from 27 in 2012.

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