Thursday, August 31, 2017

Simon Property Group vs. Starbucks: Precedent setting?

Simon Property Group raised eyebrows in the real estate and retail communities this week with the filing of a suit that challenged Starbucks’ decision to close 78 Teavana stores in Simon malls. All of the retailer's 379 Teavana shops are slated for closure through next year. 
 
Simon’s suit contends that Starbucks, in closing its stores in Simon malls, would be “shirking its contractual obligations at the expense of Simon’s shopping centers.” It’s a case with the potential to set precedents in how “covenants to operate” are executed and enforced in retail leases, according to one lawyer.. . . more

Nordstrom warns shareholders of the risks of going private

Image result for nordstromNordstrom kept quiet about the possibility of the family taking its namesake company private when reporting its last financial results, but company executives are warning of the potential risks in the latest documents filed with the Securities and Exchange Commission.

"The exploration of a possible 'going private transaction' by the Nordstrom family could impact our relationships with our customers, employees, suppliers and partners, operating results and business," the company wrote in its quarterly filing with the SEC.. . . more

Moody's: Amazon is ‘weakest’ of large retailers

Amazon isn't as dominant as is widely believed — at least not according to a new report from Moody's Investor Services.
  
Yes, the online giant continues to outpace other retailers when it comes to online sales growth, and its stock has gone through the roof. But it falls behind its large competitors in some key areas, according to Moody's VP and lead retail analyst Charles O’Shea, reported MarketWatch.. . . more

Dollar General beats Street, but profit slides; ups forecast

Dollar General turned in mixed results for its second quarter, with gains in sales but a dip in profits and a decline in gross margins. 
 
Net sales rose 8.1% to $5.83 billion in the quarter ended Aug. 4, compared to $5.39 billion in the year-ago quarter, better than analysts were expecting. Same-store sales increased 2.6%, also better than expected, driven by increases in average transaction amounts and customer traffic.. . . more

Will Whole Foods Workers Be Replaced by Amazon Technology?

Image result for amazon and whole foodsFor some time, robotics experts have forecast that robots will replace many of the jobs within the retail industry. This is particularly true for checkout functions and packaging. Amazon.com Inc. is at the forefront of the retail automation industry. It stands to reason it will apply some of its expertise to grocery store company Whole Foods, which it recently bought.

Amazon has a suite of products that could supplement or replace humans in a retail operation. Among these, Alexa is the most obvious. It could answer questions about groceries that range from prices to nutritional values, which are functions provided by humans.. . . more

Kohl's prepping new small format stores, another fulfillment center

Image result for kohl's new small store formatThe third quarter will be a busy one for Kohl's, which plans to expand its retail footprint and ecommerce fulfillment network by opening four small format stores and its fifth fulfillment center.

 The new four 35,000-square-foot stores bring the retailer's total of small format locations opened in 2016 to eight. The new stores will be located in the following cities:
  •     North Smithfield, Rhode Island. . . more

IHL Group Debunks The Retail Apocalypse

U.S. retailers are opening 4,080 more stores in 2017 than they are closing, and plan to open over 5,500 more in 2018, according to a new research report from IHL Group. The report, “Debunking The Retail Apocalypse,” was released today.

IHL's research reviewed more than 1,800 retail chains with more than 50 U.S. stores in 10 retail vertical segments. It found that for every chain with a net closing of stores, 2.7 companies showed a net increase in store locations for 2017.. . . more

Wednesday, August 30, 2017

Amazon uses Whole Foods to bolster its private-label portfolio

Amazon is wasting no time in leveraging its ownership of Whole Foods Market.
 
Amazon Fresh has made “hundreds" of new items from Whole Foods' house brands available online. Merchandise includes fancier fare and bath products from Whole Foods Market, staples from 365 Everyday Value, and pet foods from Whole Paws, according to CNBC.. . . more

Lower Property Taxes are Silver Lining for Landlords in Weak Retail Market

Image result for retail property taxRetail sales and occupancy rates are falling in many parts of the country, partly due to oversupply of stores and competition with online retail. That has meant lower property values, lower tax collections and -- in some cases -- less to pay teachers and firefighters.

But property owners and retailers say lower tax bills, which are a large part of operating costs, will help to keep them in business.. . . more

Homesense plans to add a Westwood, MA store

Image result for homesense framingham, maHomesense, a new home decor store from the parent company of HomeGoods, is getting ready to open its two locations in New Jersey.

TJX unveiled its first Homesense store on Aug. 17 in Framingham, Massachusetts. Besides the two New Jersey stores, the company also has one planned for Westwood, Massachusetts.. . . more

Consumers buoyant in August as confidence rises

Consumer confidence increased in August to the second highest level since late 2000. 
 
The Conference Board's Consumer Confidence Index rose to 122.9 in August, up from 120 in the prior month. Economists had expected the index to rise to 122.5 in August.. . . more

Simon Property Group in unusual legal move against Starbucks

The nation's largest shopping center operator is suing Starbucks Corp. over its plan to shutter the retailer's 78 Teavana stores in Simon malls.
 
In a lawsuit filed Aug. 21, Simon Property Group said that Starbucks is breaching its leases by closing the Teavana stores and “shirking its contractual obligations at the expense of Simon’s shopping centers and the dozens of communities they serve and support,” reported the Indianapolis Business Journal.. . . more

US economic growth upgraded to 3 percent rate in Q2

The U.S. economy rebounded sharply in the spring, growing at the fastest pace in more than two years amid brisk consumer spending on autos and other goods.

The gross domestic product, the broadest measure of economic health, grew at an annual rate of 3 percent in the April-June quarter, the Commerce Department reported Wednesday. It was the best showing since a 3.2 percent gain in the first quarter of 2015.. . . more

Interest Rates And Cap Rates? It's Complicated

Image result for retail cap ratesThree commercial property sectors, three different cap rate stories amid the same three increases in the federal funds rate over a six-month period. What these stories have in common is that they did not play out in lockstep with the Federal Reserve’s 25-basis point rate increases this past December and in June and March of this year. “Although cap rates tend to rise with interest rates, the causation is not as direct as the theory would suggest,” writes Barbara Denham, senior economist with Reis.

In three separate reports focusing on cap rates in the multifamily, office and retail sectors, respectively, Denham reports that mean cap rates actually showed declines for multifamily and office during Q2 and a downward trend in the 12-month rolling average for retail, by which point two of the Fed’s three rate increases would already have gone into effect. From there, though, the longer-term stories diverge.. . . more

Tuesday, August 29, 2017

How Walmart is Using Machine Learning AI, IoT and Big Data to Boost Retail Performance

Even though Walmart was founded in 1962, it’s on the cutting edge when it comes to transforming retail operations and customer experience by using machine learning, the Internet of Things (IoT)and Big Data. In recent years, its patent applications, position as the second largest online retailer and investment in retail tech and innovation are just a few reasons they are among the retail leaders evolving to take advantage of tech to build their business and provide better service to their customers.

Lauren Desegur, VP of customer experience engineering at WalmartLabs said, “We’re essentially creating a bridge where we are enhancing the shopping experience through machine learning. We want to make sure there is a seamless experience between what customers do online and what they do in our stores.”. . . more

Restaurant chain backed by Shake Shack's Danny Meyer will open in Chestnut Hill

Image result for Tender GreensTender Greens, a California-based restaurant chain backed by Shake Shack's Danny Meyer, will be opening its first-ever Massachusetts location next year.

The company said on Thursday it will open a 3,000-square-foot restaurant in spring 2018 at The Street shopping center at 49 Boylston St. in Chestnut Hill.. . . more

Day One: Amazon makes its presence known at Whole Foods stores

Image result for amazon whole foods store ad Amazon found a savvy way to remind customers that it now owns Whole Foods Market.
 
On its first day as the owner of the natural foods grocer, Amazon positioned its Echo voice-assisted speaker as one of Whole Foods’ featured “Pick of The Season” discounted products. The deal slashes prices down to $99.99 for a full-size speaker, and $44.99 for the Echo Dot, according to The Verge, which highlighted a tweeted photo of the in-store ad.. . . more

Athletic footwear retailer adopts poison pill; lowers guidance

The Finish Line's board on Monday adopted a shareholders rights plan as the retailer warned of a grim second quarter and a steep decline in sales and profits for the year.  
 
The move comes on the same day that the retailer announced disappointing preliminary results for its second quarter, ended August 26, 2017, and cut its outlook for the fiscal year ending March 3, 2018. For the second quarter, consolidated net sales fell 3.3% to $469.4 million, driven by a 4.6% decrease in Finish Line same-store sales. . . . more

Domino's, Ford to test driverless pizza delivery in Ann Arbor

Soon, the pizza you order from Domino's might show up in a Ford Fusion hybrid without a driver.

Domino's and Ford will begin testing the concept today in Ann Arbor, where Domino's is based, to see whether customers like the idea of driverless-car delivery or stumble over what amounts to a self-serve pickup process once the pizza arrives.. . . more

Best Buy ups profit and sales outlook on strong 2Q results

In this Monday, May 22, 2017, photo, Edward Calixto walks out of a Best Buy store with his purchased LED TV, in Hialeah, Fla. Best Buy Co., Inc. reports earnings, Tuesday, Aug. 29, 2017. (AP Photo/Alan Diaz) Best Buy raised its full-year profit and revenue outlook on Tuesday as the nation's largest consumer electronics chain delivered second-quarter results that beat Wall Street estimates.

The results offer strong signs that Best Buy Co. has been able to fight off online leader Amazon.com as well as increasing competition from Walmart.. . . more

Monday, August 28, 2017

Perfumania files for bankruptcy, plans to close stores

Image result for perfumaniaPerfumania, a retail and wholesale company that bills itself as the largest fragrance retailer in the country, filed for Chapter 11 bankruptcy in federal court on Saturday. The company said in a press release that it planned to recapitalize and reduce its store count to “better align with current consumer shopping patterns,” “increase investments in its e-commerce business,” and to ultimately emerge as a private company.

Management has already identified stores that are “core to the company’s ongoing operations,” which will continue operating on emerging from bankruptcy. The Wall Street Journal reported that the company plans to close 64 of its existing 226 stores.. . . more

Amazon's Retail Trade War Is Bad News For Neighborhood Stores

Whole Foods’s soon to begin price cuts is the beginning of a new retail trade war that will have two big causalities: neighborhood stores and minimum wage employees like store cashiers.

Neighborhood stores will have to close their doors at increasing numbers, as they will find it increasingly difficult to match Amazon’s price cuts at razor thin profit margins—see table.. . . more

How Hollister Came Back From the Dead

Image result for hollister storeAfter years of being relegated to the back of the closet, Hollister has been reborn.

Though the heyday of the seagull logo is long past, the teen apparel brand with the California vibe has charged back into the mix, trying to turn things around for its struggling parent, Abercrombie & Fitch Co. The bird was once a stamp of approval for cool kids—until it wasn’t, and sales tanked. The broader demise of logo apparel didn’t help.. . . more

Ulta Beauty beats Street; on track to open 100 stores in 2017

Ulta Beauty turned in another winning quarterly performance, besting analysts' earnings and sales estimates. The beauty powerhouse also raised its fiscal 2017 guidance.
 
One of the few specialty retailers with an aggressive store opening program, Ulta Beauty said it remains committed to opening 100 new locations in 2017. It will also remodel 11 stores and relocate seven others.. . . more