Macy's plans to close stores in smaller malls, and explore new formats to tackle plummeting mall traffic in the United States.
Representative from Macy's said last week that there are plans in place to close 125 of its stores over the next couple of years and cut minimum 2,000 corporate jobs as a cost-savings effort.
The company said it would close stores in lower-tier malls, and explore new avenues, as it looks to tackle plummeting mall traffic.
The chain, which has been struggling to boost store traffic as consumers opt for online shopping in the United States, has closed more than 100 stores since 2015 and cut thousands of jobs.
"We will focus our resources on the healthy parts of our business, directly address the unhealthy parts of the business and explore new revenue streams," Chief Executive Jeff Gennette said.
The to-be-closed 125 stores currently account for about $1.4 billion in annual sales, the company said.
It also said it expects annual gross cost savings of $1.5 billion by 2022, with $600 million expected in 2020.
It forecast full-year net sales to be between $23.6 billion and $23.9 billion, below analysts' average estimate of $24.36 billion, according to IBES data from Refinitiv.
We all know that markups in luxury fashion can be ridiculously high. The journey from the factory to floor, gets items to be priced at higher than they cost.
Now E-commerce site Italic is betting that removing the branding and the mark-up will prove a hit with consumers. A big bet indeed!
The start-up’s members-only marketplace, which launched last Thursday, allows manufacturers that create products for luxury brands to sell directly to consumers without the LOGOs adding markups. Shoppers who pay a $120 annual membership fee can choose from a selection of unbranded luxury goods, from bags and wallets to prescription eyewear and leather jackets, produced by the same factories that count names like Prada, Givenchy, Celine and Burberry among their clients.
The company has raised $13 million in funding, from various top end investors. Over 100,000 people joined a waiting list to be notified when membership opens, with signups initially limited to the US, said company founder Jeremy Cai.
Upon launching, the platform will have nearly 60 styles live on the site, with a view to double this number by the end of the year. However, customers won’t find unbranded versions of the Gucci Dionysus bag or any of the latest Celine creations. All products sold on Italic will be unique and exclusive to the platform to avoid infringing on brands’ intellectual property / copyrighted designs.
The start-up joins a growing number of brands, including Everlane and Warby Parker, which provide a premium-feeling, minimally branded product at relatively affordable prices. Within the luxury sector, high-end retailers, including Mr Porter, Joseph and MatchesFashion, are expanding their private label collections, which tend to be priced below standard luxury fare.
Italic goes one step further, selling items that lack even the private label branding. The marketplace will instead focus on providing the infrastructure — from marketing, design and warehousing to customer support — to enable manufacturers to sell products directly. The company will take a commission on sales.
“We essentially do everything that brands do and more, but we do it for the manufacturers,” Cai said.
For example, Italic’s merchandising team will work with factories that have product and pattern libraries to tweak existing designs so they don’t mimic products already on the market. Italic also has two designers, alumni of Armani and Calvin Klein, to work with manufacturers that don’t have in-house creative teams.
“We are very careful about every single product that we sell being originally designed, you won’t find an exact product like it in the market,” Cai said. “We want breadth and coverage of a lot of different styles.”
Branding can be a powerful tool, especially in a sector like luxury, where purchases are emotional rather than practical. That’s especially true for “statement” products, like handbags.
“People buy branded products to be reassured of the quality and style of the item and also for their projected image: they somehow communicate to other people the style, sophistication and preferences of their owner,” said Mario Ortelli, managing partner of luxury advisors Ortelli & Co. “You want to feel and show that you are part of the brand story.”
But Cai doesn’t anticipate the manufacturers on Italic’s marketplace competing head to head with luxury brands.
“For a person who is going to buy a Gucci bag, we are never going to win them over with unbranded product,” he said. “That doesn’t mean in some avenue of their life, they wouldn’t be open to switching up their sheets or maybe a shirt, or a leather jacket, where they actually don’t like a logo on there.”
As well as geographical expansion and international shipping, the platform’s short term goals include expanding into product categories like activewear and beauty. The focus will remain on luxury, Cai said.
“The reason we want to start in luxury is because we can say to the customer: we can make premium product effectively and replace a lot of your aspirational shopping,” he said.
Struggling brand Marc Jacobs is shrinking its presence in Europe as other direct to consumer brands expand. While you will still be able to find the brand at multi brand retailers like Selfridges or Harvey Nichols, the brands own store at Mount street will be no more. Business of Fashion sources claim that presently only a handful of store remain throughout the world, a far cry from its glory years.
The brand behind Vogue, New Yorker and Vanity Fair are forced to take some austerity measures after losses of up to $120 Million last year. They have taken measures to cut spending and be more digitally savvy, but it is expected to adopt strategies to ensure that it does not disappear completely.
After Boston Consulting Group did a monthlong audit of their internal systems, Robert A. Sauerberg Jr., the chief executive of Condé Nast, plans to address senior staff members on August 8th.
The company having lost more than $120 million last year, plans to put three of its 14 magazines — Brides, Golf Digest and W — up for sale, three executives said. The marquee titles, including Vogue, Vanity Fair and The New Yorker are safe, for now.
The decades-long magazine boom that made the ostentatious possible, is a thing of the past. A shift in media-consumption has elevated Instagram, Snapchat and YouTube above the printed page. Before Time Inc. was sold to the Meredith Corporation, it experienced sharp declines in annual revenue. The ad buying firm Magna projects print magazine ad sales will fall by a double digit rate this year.
The $120 million loss in 2017 came about because of a sharp decline in ad revenue generated by the print magazines. Gains in the digital arena have helped offset the loss, but not enough to make the company profitable. Condé Nast reached its decision to entertain offers for Brides, Golf Digest and W partly on the recommendation of Boston Consulting Group.
This story appeared in the New York Times.