It’s been another week with far more retail news than there is time in the day. Below, we break down some things you may have missed during the week, and what we’re still thinking about.
From Nintendo opening a new flagship to retail executives’ changing expectations around shrink, here’s our closeout for the week.
What you may have missed
Best Buy revenue dogged by consumer sentiment
Best Buy reported Thursday softer than expected earnings in the first quarter, attributing the Q1 6.5% revenue dip to macroeconomic conditions.
“Inflation is still high, mortgage rates are high, and consumer confidence scores are trending lower,” said CEO Corie Barry an an earnings call with analysts. “This, in combination with the pull forward of tech purchases into the early years of the pandemic and lower levels of material innovation, has led to continued lower demand for higher-ticket consumer electronics and a focus on value and deals for current purchasers.”
While comp sales fell 6.1% year over year and net earnings were nearly flat at $246 million for the quarter, the retailer's omnichannel fulfillment continues to improve, Barry said. Almost 60% of packages were delivered or available for pickup within one day.
Williams-Sonoma names Andy Campion to board
Williams-Sonoma on Wednesday announced that Andrew Campion has been elected to its board of directors.
Campion is currently the executive chairman of Unrivaled Sports, according to a company press release. He worked at Nike for 17 years in various leadership roles, including as its chief operating officer, chief financial officer and head of global strategy.
Campion’s executive background of a “multinational, consumer-facing, public company combined with his extensive experience in brand and business growth strategy makes him a valuable addition to our board,” CEO Laura Alber said in a statement regarding the appointment.
Nintendo plans San Francisco flagship
Video game company Nintendo last week announced the opening of its second flagship in the U.S., which is set to debut in 2025. The store, planned for San Francisco’s Union Square, will join the iconic gaming company’s other flagship in New York City’s Rockefeller Plaza and is aimed at “providing a way for a wide range of visitors from near and far to experience the world of Nintendo, its products, and characters,” according to a company press release.
While details on the store experience and product offerings are scarce so far — Nintendo notes in its press release to “stay tuned” for more information — the company’s New York location features larger-than-life character statues, video game stations and a selection of gaming-inspired merchandise. The store opening comes as businesses of all types try to more directly engage with their customers, with candy brand Hi-Chew in January launching a DTC website and toy maker MGA Entertainment in April debuting a stand-alone website for Bratz, Little Tikes and other brands.
What we’re still thinking about
27
That’s how many Sam Ash store leases are available, following the musical instrument retailer’s Chapter 11 bankruptcy filing earlier this month. Sam Ash said it plans to close all its remaining U.S. stores but is considering offers from potential buyers.
A&G Real Estate Partners said Wednesday the stores are located in 12 states, with several states have multiple locations. The stores range in size from 6,000 square feet to a 44,000-square-foot big box and some locations have up to 15 years left on their lease, A&G Senior Managing Director Todd Eyler said in an announcement.
This was Sam Ash’s 100th year in business. The family owned and operated company relied heavily on in-store traffic but the pandemic curtailed in-person visits. Sam Ash also said in bankruptcy court documents that it had too many locations. As a result, its retail operations and liquidity fell.
100
That’s how many stores TJX subsidiary Sierra now has after a store in Sheboygan, Wisconsin, opened its doors on Friday. To celebrate the milestone, Sierra took a road trip from Chicago to the new 20,000-square-foot store location in a “Sierra Active Wagon” filled with 100 products the new store will stock, ranging from kayaks to yoga mats.
"Reaching 100 stores is a testament to our loyal shoppers who share our love for getting active. We're excited to bring our unique shopping experience to Sheboygan, providing a convenient destination to gear up for their next adventure with an extensive selection of top brands at incredible prices,” Sierra Vice President and Marketing Director Caitlin Kobelski said in a statement. “As we continue to grow our nationwide footprint, we will continue to provide shoppers with all the apparel, footwear and gear they need to enjoy the day-to-day activities that suit them best, without breaking the bank."
Retail therapy
Mrs. Meyer's doesn’t want your money at its latest pop-up
Mrs. Meyer's Clean Day is hosting a pop-up this weekend in New York City, per a press release. The pop-up, dubbed The Compassion Store, is located at 2 Rivington Street and open exclusively on Friday and Saturday from 11 a.m. to 7 p.m.
The store isn't offering items for sale. Instead, in exchange for small acts of compassion shoppers can earn garden-themed items like plants, a bouquet, organic plant food and Mrs. Meyer's hand soap. The free experience in the vacant retail space asks customers to call or text a loved one, leave a positive review for a small business, create a kind post for social media or make a postcard to earn an item.
The pop-ups, the company said, are an extensions of the brand’s Lots of Compassion program that turns vacant lots into community gardens with partner KidsGardening.org. Additionally, the company is adding mini stores to select Walmarts in June.
Through July 31, local organizations and nonprofits can apply for the Lots of Compassion grant, awarding $20,000 each to 10 winners. The funds will help transform vacant land into a community garden.
Shein goes for a swim
Fast fashion retailer Shein on Wednesday announced the company’s first swimwear partnership with content creator and YouTube star Lele Pons.
"I loved curating this collection filled with bright swimsuits in a variety of styles and sizes,” Pons said in a statement. “Our hope is that there is something for everyone and that they feel their best whether they're soaking up the sun at the beach or lounging by the pool."
The Shein x Lele Pons collection features a range of styles including one-pieces, cover-ups, bikinis and resort wear for the summer, according to a company announcement. The entire collection is priced between $7 and $21.
What we’re watching
Shrink, shrank, shrunk
As Q1 results roll out, commentary around shrink – merchandise lost to theft, damage, errors or unknown reasons – has noticeably shifted, when it's mentioned at all.
Dick’s Sporting Goods executives, who months ago blamed inventory shrink for a profit miss, on Wednesday told analysts that shrink was lower in Q1 than expected. Off-price retail conglomerate TJX Cos., which last year similarly blamed shrink for lower-than-expected margins and profits, now expects shrink to be flat compared to last year. At Walmart, U.S. CEO John Furner earlier this month told analysts that there has been “a little bit of improvement this year in shrinkage from previous years.”
Target, which has been among the most vocal about the problem, expects shrink “to reach a plateau this year,” according to Chief Financial Officer and Chief Operating Officer Michael Fiddelke. Inventory counts in Q1 found shrink was lower than anticipated, and the improvement is expected to benefit gross margins for the year, Fiddelke told analysts.
Dollar General CEO Todd Vasos still sees shrink as “the most significant headwind in our business.” To combat it, the company is implementing new supply chain and store operations policies, including yanking self-checkout from most stores. The discounter expects shrink to decline in coming months, “with a more material positive impact expected in 2025.”
