Paul McAleer’s Post

Are you a Sephora, Ulta or Bluemercury shopper? Each of these beauty retailers has its unique strengths. According to the Robin Report, Sephora offers a more European product line and excels in fragrance and makeup. Ulta, on the other hand, has a greater emphasis on hair and is extremely approachable for the average consumer. And then there's Bluemercury, the most elevated and intentional of the three. It tells a story and has an opinion, hiring beauty experts who are fixated on ingredients and product performance. Which one is your go-to for all things beauty? #Sephora #Ulta #Bluemercury #beautyretailers

Traditional mall tenants continue to outperform: Think of Abercrombie & Fitch Co. and its sister brand Hollister Co. as the comeback kid. The mall-based clothing retailer, which courted teens with dark interiors and loud music in the 1990s and 2000s, put a stamp on its comeback with mostly remodeled bright stores in the 2020s, posting its best first quarter in the company’s history. The retail chain reported $1 billion in net sales, a 22% jump from last year. The Hollister brand managed a 12% growth in same-store sales, defying a soft economy. The growth was widespread, with revenue up 23% in the Americas and 19% in Europe, where the U.K. and Germany led the gains. The results marked the sixth straight quarter of gains. Profits on these sales also surged, with operating margins rising 860 basis points to 12.7%. For every $1 in revenue A&F brought in this past quarter, it roughly tripled that sale's profits. The company owes its blowout numbers to well planned clearance sales of overripe winter fashions, a pull-back on promotions and inventory, and its fashion predictability, like the wide-leg, low-rise jean that was known half a century ago as bell bottoms that hippies like your grandparents used to wear. This retail success—which propelled a 285% stock growth that even exceeded Nvidia’s stock growth last year—has been due to a seven-year disciplined transformation of Abercrombie’s brands to focus on young millennials (the mid-twenties consumer). But apparently, Abercrombie is also attracting middle-age fashion forward shoppers nostalgic for their youth by introducing a wider range of sizes. Abercrombie’s comeback represents a beacon of hope for other apparel retailers that were once stalwart mall brands. At AMERICAN EAGLE OUTFITTERS INC. revenue gained 6% year over year and marked a record for first quarter results. Gap Inc. (due to report earnings after the stock market closes today) is expected to report consistently with this positive trend, even as department stores continue to wither as they struggle to cater to the young customer. In the earnings statement, A&F CEO Fran Horowitz said, “we continue to make strategic investments across stores…” That’s key for retailers to thrive, in my view. Abercrombie & Fitch Co. operates about 750 stores across North America, Europe, Asia and the Middle East.

The Nordstrom family, behind one of the nation’s oldest department store chains, has proposed a $3.8 billion offer to take the company private, according to a regulatory filing on Wednesday. The move comes as retailers face challenges adapting to shifting shopping habits and the high costs of maintaining physical stores. Led by CEO Erik Nordstrom and Executive Vice President Pete Nordstrom, the family is working with a group of investors to acquire the retailer at $23 per share in cash. Both brothers represent the fourth generation of Nordstrom leadership, with the company’s roots dating back to its founding in Seattle in 1901. The deal is pending shareholder approval. Department stores like Nordstrom are grappling with reduced consumer spending on discretionary items, such as clothing and accessories, as well as inflation, declining mall traffic, and intense competition. These challenges have prompted some to consolidate, with Macy’s planning to close 150 stores in the coming years and Saks Fifth Avenue's parent company announcing a $2.65 billion acquisition of Neiman Marcus. Despite its strong brand and reputation for top-tier customer service, Nordstrom has faced hurdles, particularly in its off-price Nordstrom Rack division, which struggled last year. Inflation-conscious consumers increasingly sought bargains, contributing to uneven performance. Nordstrom’s stock has risen 25% since the start of the year, though it has dropped nearly 27% over the past five years. The family’s offer represents a 35% premium over the closing stock price on March 18, the day before reports of the potential acquisition surfaced. However, the offer is only slightly above Tuesday’s closing price. A special committee of Nordstrom’s board of directors is evaluating the proposal, pledging to act in the best interest of the company and its shareholders. Neil Saunders, managing director at GlobalData Retail, noted that while the modest premium might normally make the deal unattractive, the situation is unique given the company’s family ownership. The Nordstrom family plans to finance the acquisition using cash, their existing stake in the company, and $250 million in bank loans. El Puerto de Liverpool, a Mexican real estate and department store company with a 10% stake in Nordstrom, is also part of the buying group. Last week, Nordstrom reported improved quarterly earnings, with same-store sales rising, partially due to better performance at Nordstrom Rack. The company also raised its annual outlook slightly. CEO Erik Nordstrom expressed optimism, highlighting progress in both the main Nordstrom brand and the off-price segment.

Aloha Friday! 🤙🏼 Here are some interesting stories from the world of retail for Friday, April 12: 👕 Fashion retailer EXPRESS is reportedly considering various options, including Chapter 11 bankruptcy, as it faces increased competition in the fast-fashion space. But its struggles have been a long time in the making. 👩🏽⚖️ SHEIN is facing a class action lawsuit that alleges the fast-fashion company uses an “industrial-scale scheme of systematic, digital copyright infringement” against small designers and artists, according to court documents last week. 👖 Levi Strauss & Co. has named Burberry executive Gianluca Flore as its chief commercial officer. Flore will report to Michelle Gass and oversee the company’s commercial operations across stores, e-commerce and wholesale. 🤖 Amazon CEO Andy Jassy has touted AI in annual shareholder letter. Amazon’s approach to AI has made some investors optimistic about its financial outlook for the start of the year. 🏥 Walmart is taking the first steps in an initiative to nearly double the footprint of its Walmart Health format. It has now opened three of 18 planned new Texas health centers 💊 RITE AID is shuttering 53 additional stores in nine states across the U.S. as part of the company's bankruptcy proceedings, according to recent court filings. 📺 Qurate Retail Group promotes CFO to expanded role. Bill Wafford has taken on the additional position of chief administrative officer and will oversee the company’s transformation office. 🚗 CarMax stock fell 9% Thursday after the car retailer missed analyst estimates for fourth-quarter net income and revenue, as it bought fewer cars from customers and dealers. 👗 Rent The Runway turns to resale, advertising in renewed growth push. The apparel rental service beat expectations in Q4 and struck a note of confidence, saying its restructuring earlier this year wasn’t just about cuts. 🏕️ Bloomingdale's is opening a pop-up space called "Carousel: Camp Bloomingdale's" in select locations and online. The space is the latest iteration of Bloomingdale’s Carousel rotating pop-up format. 📦 Amazon shares finished the trading day up 1.7% at $189.05 yesterday. That marked their first all-time closing high since July 8, 2021, when they ended at $186.57. 📈 The Producer Price Index, a closely watched measure of inflation at the wholesale level, rose 2.1% for the 12 months ended in March, up from a 1.6% gain in February. ⛽️  Prices at the pump are likely headed higher in the near term. Prices have been edging higher, with motorists on average paying six cents more per gallon than a week ago and 23 cents more this time last month. 💳 New data published by the Federal Reserve Bank of Philadelphia shows that a growing number of Americans are struggling to make their monthly credit card payments as they continue to battle high inflation and interest rates. #retail #retailnews #economy #DailyRetailNews

Aloha Friday! 🤙🏼 Here are some interesting stories from the world of retail for Friday, April 26: 👟 Skechers' stock soared 10% in after-hours trade Thursday, after the athletic footwear company swept past earnings estimates for the first quarter. Sales rose 12.5% to a quarterly record of $2.252 billion. 🚜 New stores helped drive Tractor Supply Company's first-quarter net sales to $3.39 billion, up 3% from $3.3 billion a year ago. Comps grew 1% versus 2% year over year led by transaction growth. 🏷️ An upcoming online-only sale will give members of the Walmart+ paid subscription program first crack at limited-edition and Walmart-exclusive items. The Early Access event runs for 24 hours from April 29 at noon. 📧 The Federal Trade Commission alleges top Amazon executives, including founder Jeff Bezos and chief executive Andy Jassy, erased text messages that the agency could have used in its antitrust case. 👜 Resaler Rebag is adopting a new membership model to try and boost sales and bring back dormant customers. Members pay $50 a month or $500 a year to join, Rebag converts that money into credit they can use. 👰🏼 Forever 21 launched its first bridal capsule. The 22-piece collection features sleepwear, lingerie and accessories such as cowboy hats, statement hair pieces and embellished sunglasses. 🌟 Rob Walton, longtime Walmart director and son of the retailer's founder, will retire from the company’s board in June. Walton, 79 years old, is the longest-serving director at Walmart after more than 40 years in post. 🛒 Amid a surge in thefts across Washington DC, Harris Teeter has made policy changes it hopes will deter shoplifters. Backpacks are banned and customers need to show receipts to exit. 🎃 Spooky season may not be upon us, but that’s not stopping The Home Depot from selling Halloween decor in April. It's selling its highly sought-after Halloween decorations much earlier than previous years. 🏬 UBS analysts have suggested that e-commerce isn’t done with the brick-and-mortar store just yet. They predict that around 45,000 retail stores will close over the next five years. 💵 Following the US Department of Labor’s announcement Tuesday that it’s set to finalize new overtime pay regulation, two key retail industry groups expressed concerns about their effect on retailers and their employees. 🏗️ Amazon ’s cloud computing unit Amazon Web Services (AWS) plans to invest $11 billion to build a data center in northern Indiana that will create at least 1,000 new jobs, state and company officials announced Thursday. 🌯 Chipotle Mexican Grill has no plans to open another Farmesa Fresh Eatery after its initial ghost kitchen location closed. Chipotle’s primary focus now is on growing its own brand. 💊 Weight loss drugs like Wegovy are reshaping the US health and fitness industries. Even established diet companies like WeightWatchers and brands like Lean Cuisine are getting makeovers. #retail #retailnews #economy #DailyRetailNews

Aloha Friday 🤙🏼 Here are some interesting stories from the world of retail for Friday, November 15: 👜 Luxury fashion conglomerates Tapestry and Capri Holdings Limited have called off their merger, weeks after a federal judge sided with antitrust regulators who oppose the deal. 🌳 Dollar Tree Stores has announced that Jason Nordin is the new president of the company’s Family Dollar banner. Nordin will play a key leadership role as the company undergoes a formal review of strategic alternatives. 🎈 The Macy's Thanksgiving Day Parade is set to dazzle with a star-studded lineup featuring Jennifer Hudson, Kylie Minogue, and Billy Porter. The holiday tradition will begin at 8:30 am on November 28th. 📦 Amazon’s new service Haul is filled with economical products, low prices and even cheaper product photography. Indeed, it looks like many of the products being sold are not-so-artfully using AI to doctor the images. 🚘 Shares of Advance Auto Parts pulled a sharp early U-turn to trade higher Thursday, after the company laid out its plan to return to sales growth and to boost margins, including by closing more than 700 store locations. 🏬 Dillard's Inc. has reported that Q3 retail net sales fell 3.8% year over year to $1.4 billion, with store comps down 4%. Cosmetics was the strongest performing category. The weakest were kidswear and menswear. 🎄 The season of sales is now in full swing as retailers aim to woo weary consumers: With a tighter window between Thanksgiving and Christmas, the ramp-up to Black Friday is steeper than ever this year. 🥦 Americans are shelling out 22% more for groceries compared to when President Joe Biden took office in January 2021. However, some of President Trump's policies may increase, not reduce, prices, notes CNN. 👟 adidas has signed one of its youngest female athletes yet. It announced the signing of Kaleena Smith as its first high school girl’s basketball partner under a name, image and likeness, or NIL, deal. 🦃 Some 34% of consumers are anticipating spending more money on their Thanksgiving haul, but that won’t impact the amount they buy - largely thanks to higher prices. 👖 BofA analysts reiterated buy ratings on Burlington Stores, Ross Stores, and TJX ahead of Q3 results. They expect all three to continue to attract core and trade-down consumers. 👩🏽⚖️ A federal judge said Kraft Heinz must face a proposed nationwide class action alleging that it defrauded consumers by claiming its Kraft macaroni and cheese contains no artificial preservatives. 📈 US wholesale prices rose a bit faster in October and suggested that the Federal Reserve’s battle to reduce inflation to low pre-pandemic levels may go on a while. 🎶 Gap's new holiday ad campaign features nine “sing-fluencers,” including north Alabama musician Lamont Landers. 👾 Following a cyberattack, Stop & Shop is experiencing significant inventory shortages, affecting the shopping experience. #retail #retailnews #economy #DailyRetailNews

#BlackFriday happens differently in NYC; generally a bit later, and more focused on fashion and footwear than big box. And it happens outside - block by block. A few thoughts following the 10 miles (15,000 steps) I spent in most of Manhattan’s major shopping districts. Foot traffic was mixed. Core midtown / 5th Avenue (48-57th) was bustling (mostly with foreign tourists) and prime Soho (Broadway b/w Prince & Broome) was packed. But 1-2 blocks further and the crowds thinned out. The Flatiron to Union Square triangle (5th Ave & Broadway) was pretty sparse, as were its stores, and the Union Square Holiday Market, which is often gridlocked with people, was only moderately crowded. Further downtown, Westfield WTC was only moderately busy, with more people eating than shopping. Turning to retailers … for every store that was crowded, there were plenty that looked no busier than a typical weekend. Edikted wins the “longest line” award, with 100+ teen girls (and some parents and boyfriends) queuing. The North Face was one of the few other stores with a line. Abercrombie & Fitch Co. and UNIQLO were both packed (in Soho as well as 5th Ave). The biggest surprise was Macy's. The Herald Square flagship was #WallToWall on the main floor, and quite busy on many of the others. On the flipside, Nike and Apple were notably quieter than I expected (I’ve seen lines at each in years past), H&M and Zara both seemed pretty flat, and the Nordstrom flagship was downright empty (in fairness, I was there on the early side — 11:30am). On the whole, I would say we’re in for uneven performane. The macro sentiment is closer to #HoHum than #HoHoHo and you can see the brands that appear to be separating themselves from the pack. And as we all experienced, most of the Black Friday deals started long before the day itself, and a LOT of the shopping has shifted online.

"The consumer [is] being mindful about how they’re using their dollar and purchasing power, knowing they have so many choices." As the data comes in from #BlackFridayWeek, it's about as mixed as I saw on the streets of NYC. The quote above is from Michelle Meyer, Chief Economist at Mastercard, which reported spending growth of 3.4% (15% online and 0.7% in-store) on Black Friday. Adobe Analytics, which only tracks online spending, reported sales growth of 9%, driven by "bigger-than-expected" discounts. And it's important to remember that: (1) "Black Friday has transformed from a stand-alone day ... to a monthslong campaign of discounts;" and (2) "The ease of online shopping has meant fewer Americans go out to stores on Friday, even as it remains one of the busiest days of the year for retailers." https://lnkd.in/ehEA_9B3

I’ve been closely monitoring Abercrombie & Fitch’s stock performance, and it’s impressive to witness its consistent ascent. While the A&F Wedding Shop has undoubtedly contributed to this success, it’s the brand’s strategic pivot that truly captures my attention. Abercrombie has undergone a remarkable transformation, shifting its focus to an older demographic and embracing inclusivity, which has resonated well with consumers. It’s inspiring to see a company thrive through robust market validation and product development that’s deeply rooted in understanding user needs. As A&F CEO Franz Horowitz puts it, “Getting close to the customer and understanding what they are looking for is the win. Put out there great product, fashion and an equation that they are excited about. They’re willing to spend.” This approach is a testament to the power of identifying and addressing pervasive customer problems with solutions they value and are willing to pay for. The result? A staggering 102% growth YTD in their stock. Abercrombie’s journey is a prime example of how intentional business strategy and customer-centric product definitions can lead to remarkable outcomes.

Gap Inc.’s new CEO was on the hunt for a hoodie. In March, he called one of his stores and got a recording, which reeled off the location and hours, but didn’t provide an option to connect with a human being. He called a second store, where an employee, who didn’t know the person on the other end was his boss, left him on hold. There wasn’t even music to help pass the time. The third store had the hoodie but not in his size. “Who doesn’t have a medium?” said Richard Dickson, who was hired as Gap’s chief executive in August, after joining its board in 2022. The company that once reigned over American casual fashion has bungled the fundamentals of retailing for years. Its profits have halved over the past two decades as sales have slid. Even if its stores were perfectly stocked, it’s still facing a crisis that has simmered for decades. Its Gap, Old Navy, Banana Republic and Athleta chains have been outmaneuvered on all sides, from discount stores like Target and fast-fashion brands like ZARA USA and SHEIN that offer trendier products at lower prices to rival specialty retailers like AMERICAN EAGLE OUTFITTERS INC. and lululemon that have wooed away shoppers with higher quality and better styles. All of which means Dickson must grapple with what might be the most fundamental question possible for a retail CEO: Why do his brands exist? 🔗 Read how Dickson is trying to make the clothing company cool again—one hoodie at a time: https://lnkd.in/eHGQ7kWE