GLG News by Chico's FAS Experts: Retail Consultants

Martin BrillManaging PartnerSweetwater Consulting LLC

Influential Fashion Emporiums are Alienating Petite Customers

June 1, 2006

Analysis of:Where's the Petite Department? Going the Way of the Petticoat | www.nytimes.com

• Reporting declining sales, executives at Neiman Marcus, Saks Fifth Avenue and Bloomingdale’s have eliminated, or drastically scaled back their petite departments, which sell clothes to women 5’4’ or smaller.
• This was done although sales in the U.S. of petite clothing have grown (Nordstrom and Macy’s report brisk sales) to $10 billion which is $2 billion more then the entire women’s jean business.
• According to the U.S. Department of Health and Human Services, the average American woman’s height is slightly less than 5”4’.
• The strong emotional response from petite customers at Saks, with many vowing to stop shopping in there completely, has executives “reconsidering” their decision.
• What must these stores do before they lose their petite customer base?

 

Martin BrillManaging PartnerSweetwater Consulting LLC

Goldman Sachs To Advise Eddie Bauer On Sale

April 26, 2006

Analysis of:Eddie Bauer on the Block | www.wwd.com

Potential bidders for Eddie Bauer include strategic and private equity firms. Bids are expected before May 1st. by strategic players such as VF Corporation and Liz Claiborne. Private equity companies mentioned as interested are Kohlberg Kravis &Co. and Texas Pacific Group. The hiring of Goldman Sachs as as financial advisor points to a quick sale of the company.

Martin BrillManaging PartnerSweetwater Consulting LLC

Coldwater Creek Thinks Outside The Box

April 20, 2006

Analysis of:Coldwater Creek Tests New Day Spa Concept | www.wwd.com

Coldwater Creek is not waiting around to reach mature status in 2009 (450 to 500 stores by 2009/10) to find a new vehicle that will leverage their brand equity. While Chico's, their strongest direct competitor, has chosen to develop new retail store brands to sustain corporate growth, Coldwater Creek's day spa concept will intensify their relationship with their customer base and increase lifetime value with a high margin business.

Martin BrillManaging PartnerSweetwater Consulting LLC

Major Stores Reduce Inventory and Their Vendors are Hurting

April 20, 2006

Analysis of:Wall-Mart Roils P&G, Levi Strauss With Plans to Trim Inventory | www.bloomberg.com

Mass merchants headed by Wal-Mart and leading department store chains such as Federated, are reducing inventories and the impact is being felt by the largest apparel manufactures and consumer products companies. The objective for these retail giants is to increase shareholder value by reducing working capital needs, increase stock turns, and provide greater flexibility to develop private brands.

The apparel industry has moved to off-set this changing paradigm (as well as merger-driven store consolidation) by developing specialty retail stores for various brands, online sales and expanding their global reach through joint ventures. In order to perpetuate wholesale growth, major suppliers are facing the daunting challenge of complying with the demands of their largest customer’s, while achieving their profitability and growth forecasts.

Martin BrillManaging PartnerSweetwater Consulting LLC

Wal-Mart's Mixed Brand Perception Issue

April 18, 2006

Analysis of:Wal-Mart's N.Y. Plan: Retailer Pushing Effort To Build in 5 Boroughs | www.wwd.com

Despite its everyday low prices and improved apparel assortments, Wal-Mart is seen by many as a large corporate entity that cares little for the welfare of their employees and the retail communities they enter.

Perceived as paying  poor wages and benefits to disadvantaged employees

Forces suppliers into selling at unreasonably low prices

Difficult for independent local retailers to survive.

Allan HaimsPrincipalASER Marketplace, LLC

JC Penney finds way enter Prestige Beauty Biz in big way

April 17, 2006

Analysis of:Beauty's Big Shake-up: J.C. Penney, Sephora Form In-Store Alliance | www.wwd.com

The clear winner here (assuming flawless execution) is JC Penney & LVMH Moet Hennessy Louis Vuitton (owner of Sephora) - as well as the major beauty companies - i.e. Lauder, L'oreal, P&G Prestige - that were among the losers of the Federated/May Co Merger.
Kohl's - lacking a prestige beauty business - potentially can loose customers to JCP, as the roll out of Sephora ramps up.

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