GLG News by Chico's FAS Experts: Retail Consultants

Martin BrillManaging PartnerSweetwater Consulting LLC

Department Stores Are Giving Up Market Share to Discounters and Off-Price Retailers

March 7, 2008

Analysis of:Shares Slump as February Comps Disappoint | www.wwd.com

Middle income consumers are trading down from department stores such as Kohl's,  Bon-Ton and Macy's to off-price retailers and discounters like TJX and Ross Stores, Wal-Mart and Costco.  Missy apparel retailers and brands targeting "boomers" are suffering more than most in this economic downturn. Aeropostale, Urban Outfitter's, J. Crew and H&M are thriving at a time most specialty retailers, catering to younger shoppers, are reporting negative comps.

Martin BrillManaging PartnerSweetwater Consulting LLC

Sailing In Rough Waters, Old Navy Charts a New Merchandising Course

January 31, 2008

Analysis of:Makeover at Old Navy: Faster Fashion a Key to Monthly Collections | www.wwd.com

In moving  from a key item merchandizing strategy to monthly "wardrobe building collections," will Old Navy  alienate of many of its core customers? Does Old Navy have the sourcing and logistics structure in place to execute a fast fashion delivery initiative without severe disruption of its supply chain? With no apparel retail experience in his resume, can Glenn Murphy, CEO of Gap Inc.,  properly evaluate the risks to customer loyalty,  inherent to radical merchandizing strategy shifts?

Martin BrillManaging PartnerSweetwater Consulting LLC

Upper and Lower Apparel Retail Segments Will Survive A Rough Holiday Season

November 12, 2007

Analysis of:Bernanke on Holiday: Wait and See | www.wwd.com

While the very upper retail segment continues to perform well, off-price retailers and mass merchants will benefit most from a deteriorating economic outlook. Department Stores and Specialty Retailers must manage inventories skillfuly, in order to suvive the tough season ahead.

Martin BrillManaging PartnerSweetwater Consulting LLC

Vera Wang's New Line Is The Most Expensive Apparel Brand At Kohl's

August 27, 2007

Analysis of:Vera Wang Set to Dress Up Kohl's | online.wsj.com

1.In department stores, it is very rare that the most expensive line in a department ever does well. 2. It is unlikely that the typical Kohl's customer ever heard of Vera Wang. 3. Kohl's advertising campaign on this brand does not speak to their moderate customer base. 4. Vera Wang's designer line will not suffer and she will make some very nice short term money until Kohl's management recognizes its strategic mistake.

James MoganFounder and PresidentJRM Group

Does The Macy's Nameplate Have National Appeal? Is The May Corp Merger Working?

August 22, 2007

Analysis of:Macy's costs continue to bite as Q2 sales fail to impress, dreary outlook sends shares to new low | www.wgsn.com

-Launching Macy's as a National Retailer has major ramifications in the Department Store Sector with both Manufacturers and Consumers. -The May Corp Merger has been, on balance, a failure for Federated and has, and will continue to hurt the overall Federated Business. 

Martin BrillManaging PartnerSweetwater Consulting LLC

Abercombie & Fitch Apparel Is A Natural Fit For Europe

July 18, 2007

Analysis of:A&F sets sights on Europe | www.retailingtoday.com

The Abercrombie & Fitch brand is percieved as edgy, sexy and contemporary American fashion, making it a perfect candidate for European expansion. The company is growing its top line by inceasing square footage in the U. S. as comp store sales have been generally flat. The London store concept was based on the unique New york flagship store on fifth avenue and will be the model for the new stores throughout Europe.

Martin BrillManaging PartnerSweetwater Consulting LLC

Undeterred by Foul Weather and the Economy, Guess Continues Spectacular Growth

June 11, 2007

Analysis of:Guess Steps on the Gas: Overseas Drive Helps Company's Growth Soar | www.wwd.com

With almost flawless execution of their global retail strategy and powerful brand extensions, Guess continues its dramatic growth in revenue and profit. Offering no excuses about the weather, high gasoline prices and a soft housing market, Guess reported that U.S. same-store sales for their first quarter grew 13.6 percent awhile total company earnings increased 71.9 percent. Wholesale revenues at Guess grew 77 percent, in spite of the brands rapid expansion of their own retail stores and growing Internet business. The experienced and talented upper management of the company was able to change the business model from a wholesale department store resource to a leading global retail brand in six years. Guess is established as a fashion leader in the “contemporary” fashion segment and its well merchandised product assortments uniquely position the brand for further global expansion.

Martin BrillManaging PartnerSweetwater Consulting LLC

My Space and You Tube Are Changing the Way Young Apparel Brands Get Hot

May 30, 2007

Analysis of:Talking to a Generation: Brands Turn to You Tube To Spead the Message | www.wwd.com

Considered to be still in its infancy, You Tube and My Space are growing geometrically, with 267 million viewers combined in March 07’, verses 71 million last year. Freedom of expression, with humor as a trigger, is creating viral marketing phenomena in the world of fashion. Major brands such as Nike and Gap are creating content, specifically, to engage an audience to promote new products. Fashion marketers are experimenting with 10 second TV spots to drive targeted segments to these sites to view their content.

Martin BrillManaging PartnerSweetwater Consulting LLC

Apparel Industry Trends Are Creating A Perfect Storm

April 16, 2007

Analysis of:Wholesale Giants Morphing Into Retailers | www.wwd.com

• Recent retail consolidation (such as Federated’s acquisition of the May Company) has compelled apparel wholesalers to accelerate development of direct to consumer strategies in order to gain greater control of their distribution channel.
• Wholesalers are on the lookout to acquire companies with the potential to develop into global retail “lifestyle” brands.
• Properly executed retail concepts have the effect of strengthening the brands wholesale business.
• As wholesalers direct to consumer business grows (Liz Claiborne is projecting to 40%) it will create a fundamental change in financial planning.

Martin BrillManaging PartnerSweetwater Consulting LLC

Not Ready To Cash Out: The Gap Begins Its Search For A New CEO

February 14, 2007

Analysis of:Top Designer Exits Gap | www.wwd.com

Industry speculation, fueled by CNBC, that Goldman Sachs was hired by Gap Inc. to “help explore options” was denied last week by the company’s founder and Chairman Emeritus, Donald Fisher. When contacted about Mr. Fisher’s comments, the investment banking firm declined comment.

Following the resignation of Paul Pressler last month, (who succeeded Mickey Drexler as CEO four and a half years ago) the company accepted the resignation of Gap President Cynthia Harris and replaced her with Marka Hansen who enjoyed moderate success as President of the company’s Banana Republic division.

Last week, Charlotte Neuville, who was hired a year and a half ago as the Gap’s Head Designer, abruptly left the company and a search is on for her successor.

The difficult task ahead for the company is to find a top-tier CEO who would be disposed to initiate yet another a turnaround effort in the glare of impatient investors’ scrutiny and be willing to embrace the freshly minted executive team now running the companies’ three major operating divisions. (Gap recently hired Dawn Robertson to turn the floundering Old Navy around and Banana is now being run by interim President, Jack Calhoun, who worked for Hanson as Banana’s Chief Merchant.)

 

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