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 "Griller Lite" to the acquisition of Shoe City, here’s our closeout for the week.
What you may have missed
Yeezy Gap Engineered by Balenciaga collection drops
Gap’s highly anticipated Yeezy Gap Engineered by Balenciaga collection is now available. The line includes T-shirts, hoodies, jogging pants, outerwear and caps, and can be purchased on the Yeezy Gap website, Balenciaga, Farfetch.com, MyTheresa.com and Luisaviaroma.com.
“Designed for the future, Yeezy Gap and Balenciaga reimagine the modern wardrobe through their shared vision of utilitarian design,” Yeezy Gap said in a press release.
Yeezy Gap announced the Engineered by Balenciaga collaboration in January, which garnered attention for the unique combination of styles from Ye (formerly known as Kanye West) and Balenciaga Artistic Director Demna (formerly known as Demna Gvasalia).
The collection was scheduled to drop May 25, but was postponed until May 27 following the news of a school shooting in Uvalde, Texas, this week, according to a Gap press release sent to Retail Dive.
At the time of the announcement in January, executives said that the partnership with Ye had brought in customers new to the Gap brand and skewed younger than its typical audience. However, concrete details have yet to be shared showing the partnership’s success.
The Athlete’s Foot parent company acquires Shoe City
Arklyz, parent company of The Athlete’s Foot, announced Wednesday that it acquired Baltimore-based retail chain Shoe City. The deal is expected to be completed by July.
The acquisition will add 40 store locations to the DMV region, which includes Washington, D.C., Maryland and Virginia. Shoe City’s e-commerce presence will “help jumpstart” The Athlete’s Foot’s omnichannel strategy, according to a press release announcing the deal.
Stitch Fix names CMO
Stitch Fix, an apparel e-retailer that also runs a box business curated by algorithms and human stylists, this week hired industry veteran Debbie Woloshin as chief marketing officer. The previous executive in the role, Deirdre Findlay, left in 2020 after less than two years on the job.
Woloshin most recently was CMO at Marc Jacobs for four years, and before that led marketing at the Frye Company and Ann, Inc. She also spent nearly two decades with the Jones Group, according to a company press release. She leads Stitch Fix’s marketing teams across the US and the UK, reporting to CEO Elizabeth Spaulding.
In a statement, Woloshin called it “a privilege to be joining a company that is such a disruptive force in our industry.” Arguably, though, it’s retail that has disrupted the company of late. Growth at Stitch Fix has slowed markedly since it ushered in traditional e-commerce last year, which is meant to augment its niche styling service. But the move has siphoned more customers away from the box business than executives had anticipated, and they have been scrambling to tweak the ecosystem for at least two quarters.
Also this week, Nordstrom announced that it is shutting down its similar box subscription service and investing more in virtual and in-store styling services.
Cotopaxi taps former Eddie Bauer CEO as president
After announcing its intentions to name a president back in December, Outdoor gear brand Cotopaxi this week said Damien Huang would fill the role. Huang, who most recently served as Eddie Bauer’s CEO, will report directly to Cotopaxi founder and CEO Davis Smith.
The new role was created to help the brand grow “to even greater heights and industry benchmarks in impactful brand development,” the company said in a press release. As president, Huang will help drive strategy, operations and execution across Cotopaxi’s C-suite and organization.
Aside from Eddie Bauer, Huang also held leadership roles at Patagonia, including as the vice president of design and merchandising, and The North Face.
"To say I'm excited to join Cotopaxi would be an understatement,” Huang said in a statement. "Every once in a while a company comes along that is not only new and different, but has an energy, a soul, and a purpose that makes an organization remarkable. I'm deeply inspired by what Davis and the team have built, impressed by the leaders at Bain Capital Double Impact, and honored to help push the company forward."
Williams-Sonoma laps 2021’s figures with comps up nearly 10%
Williams-Sonoma on Wednesday reported first quarter net revenue reached $1.9 billion, up 8.1% year over year and up 53% from 2020. Overall comparable sales increased 9.5%, driven by a 14.6% comp increase at Pottery Barn and a 12.8% increase at West Elm.
The company’s gross margin increased 80 basis points from last year to 43.8%. Operating income increased 17.6% to $323.5 million, while net income grew 11.5% to $254.1 million.
“The current economic environment is challenging, but the housing market remains strong. Hybrid work means people will continue to spend more time in their homes and the rising costs related to gas and travel have historically led people to stay at home to cook and entertain,” CEO Laura Alber said on a call with analysts. “We believe that these three trends will result in continued momentum to outfit and improve the home.”
Williams-Sonoma said it expects its fiscal 2022 financial performance to align with its long-term guidance of mid to high single-digit annual net revenue growth, reaching $10 billion in revenue by fiscal 2024. It expects operating margins to be in line with its 2021 operating margin.
Retail therapy
Grilling and drinking just got easier with Miller Lite Beer Coal
For once, giving the gift of coal might not be so bad. With summer right around the corner, beer brand Miller Lite has introduced what they think could be a new warm weather essential — coal infused with a coat of actual Miller Lite. For all the grilling fanatics out there, this coal has concentrated Miller Lite coating around it to give anything you throw on the grill the sweet, sweet taste of beer.
“Summer is ... beer season, and as a light beer known for great taste, it only made sense to pair Miller Lite with the distinct and beloved flavor grilling offers,” said Miller Lite Director of Marketing Anne Pando in a statement.
Miller Lite Beercoal is available nationwide for $11.99 plus shipping. At the time of publication, however, it is sold out. The company is urging shoppers to follow it on social media for info on timing of upcoming drops. But, why buy a six-pack when you can just take a bite out of a lump of coal? (We do not recommend doing this.)
All dolled up
Proving that “let’s start a podcast” is the 2020’s version of “let’s open a bar,” American Girl on Tuesday announced that it is launching its own podcast network.
The network, which at least has the decency to be ad-free, will start with three original productions:
- American Girl 10-Minute Mysteries is a scripted show developed from the retailer’s historical character mystery books. The first season, which debuts on May 24, is based on “A Light in the Cellar: A Molly Mystery.”
- American Girl Fan Club gives fans a behind-the-scenes look about the American Girl characters, and starts on July 13.
- The Smart Girls Podcast, which launches Aug. 17, is based on the brand’s books “A Smart Girl’s Guide,” and aims to help tweens navigate their emotions, mental health and friendships, among other topics.
“With storytelling an intrinsic part of our DNA, the American Girl Podcast Network is a natural evolution for the brand, allowing us to tap into our vast collection of diverse content, as well as our numerous authors and subject-matter experts, to enrich and entertain our fans,” Jamie Cygielman, general manager of American Girl, said in a statement. “We’re thrilled to connect with all those in our celebrated American Girl community in this authentic and culturally relevant way.”
What we're still thinking about
50
That’s how old Nike is now. The company is looking ahead to its next 50 years in business, and serving the women’s market is a big part of that. Some other interesting numbers for how it plans to do that? 70, for the number of sizes Nike now offers in cup-based sports bras (actually: more than 70). Three, for the number of leggings and bra franchises Nike is focusing its strategy around. And 48, for the number of weeks involved in the new Move Like A Mother maternity program Nike is rolling out to help pregnant athletes stay active.
1
That’s the number of clothing stores Amazon has officially opened, after the retailer’s first foray into the space debuted this week. The opening of the retailer’s first clothing store comes about two months after Amazon announced it would shutter all of its bookstores and 4-star shops. The first Amazon Style location is at The Americana at Brand in Glendale, California, and features Amazon’s own private label brands alongside name brands like Calvin Klein, Levi’s and Lacoste.
What we're watching
The retail worker revolt comes for Dollar General
This week, according to an activist group, more than 150 Dollar General employees and supporters traveled to Dollar General’s headquarters in Goodlettsville, Tennessee, for the company’s annual shareholder meeting to protest working conditions at the retailer.
Civil Rights and anti-poverty activist Rev. William Barber II and other protestors were turned away by staff when they tried to enter the shareholder meeting. Involved in the Dollar General protests was the retail worker activist group United for Respect, which has organized campaigns at Toys R Us, Petco and Walmart, among others.
Dollar General’s footprint and sales have exploded since the Great Recession. But the retailer has also been trailed by criticism over its business tactics and treatment of workers. Earlier this year, the U.S. Labor Department’s Occupational Safety and Health Administrated knocked Dollar General for “discounting safety” at stores. OSHA noted that Dollar General has racked up millions in fines for unsafe conditions in 55 inspections since 2016.
In 2020, Kenya Slaughter, a Dollar General employee based in Louisiana who attended the protest, wrote an op-ed for the New York Times lamenting “bare-bones” store staffing, working alone for hours on a shift, the lack of PPE, unpredictable scheduling and inadequate pay.
The pandemic era has added stress to retail work and led to financial bonanzas for many large retailers and their shareholders. Workers have been pushing back. Amazon this year has faced union votes, as has Target, Starbucks, REI and others.
Late last year, The Washington Post reported on a heavy-handed response by Dollar General management around a failed attempt by some workers to unionize at a store in Connecticut. Some of its workers are still speaking out, and are likely to continue to do so.
Burlington continues the off-price turmoil
Burlington joined its off-price peers in experiencing turmoil in the first quarter. A plan to tightly control inventory backfired on the retailer when it faced supply chain delays early this year, CEO Michael O’Sullivan told analysts on Thursday, per a Seeking Alpha transcript. After a quick merchandising pivot, comps improved, he said.
Total Q1 net sales fell 12% year over year, as comps dropped 18%, according to a company press release. Gross margin contracted by 230 basis points to 41%, with freight expenses rising 150 basis points; merchandise margins decreased 80 basis points. Net income plummeted 90.6% to $16 million.
Still, while the retailer has addressed its inventory problem, it’s not rushing to stock up too much because it expects a lot of good merchandise to come its way, O’Sullivan said.
“There has been a sea change in the availability of off-price merchandise,” he said, noting that could be due to overproduction, sales trouble at other retailers, a sudden supply chain catch-up or all of the above. “But whatever the reasons, the buying environment now is better than it has been for years. Our buyers are seeing great deals.”
He also noted that consumers, pressured by inflation, could turn to off-price in greater numbers, when they shop at all. Wells Fargo analysts led by Ike Boruchow said the retailer’s upbeat view of the near future could pan out.
