Retail News: Macy’s, Inc. Reports Fourth Quarter and FY2016 Results

Diluted 2016 EPS is $1.99, or $3.11 as adjusted; Company provides 2017 sales and earnings guidance

Macy’s, Inc. (NYSE: M) today reported fiscal 2016 earnings per diluted share of $1.99, or $3.11 per diluted share excluding certain items discussed below.macyslogo

Macy’s, Inc., with corporate offices in Cincinnati and New York, is one of the nation’s premier retailers, with fiscal 2016 sales of $25.778 billion. The company operates more than 700 department stores under the nameplates Macy’s and Bloomingdale’s, and approximately 125 specialty stores that include Bloomingdale’s Outlet, Bluemercury and Macy’s Backstage, in 45 states, the District of Columbia, Guam and Puerto Rico, as well as the macys.com, bloomingdales.com, and bluemercury.com websites. Bloomingdale’s in Dubai is operated by Al Tayer Group LLC under a license agreement.

While 2016 was not the year we expected, we made significant progress on key initiatives that are starting to bear fruit. These include continued improvement in our digital platforms, the rollout of our new approach to fine jewelry and women’s shoes, an increase in exclusive merchandise and the refinement of our clearance and off-price strategy. We also took a big step forward in rightsizing our physical footprint and restructuring our entire organization. The combination of these initiatives will help us gain market share, return to growth and drive enhanced value for our shareholders over time,” said Terry J. Lundgren, Macy’s chairman and chief executive officer.

We will be investing for the future in 2017. Looking at the continued challenges in the retail environment and changing consumer shopping behaviors, we know we must evolve our strategy and execute faster,” Lundgren said. “Key to this is enhancing the customer experience in our stores where we are developing and testing concepts that feature new merchandise and entertainment options alongside enhanced technology to make shopping simpler. Additional initiatives that we believe will improve sales trends in 2017 include continued omnichannel improvements, an updated marketing strategy, and a simplified pricing structure.”

We continued to make progress on the execution of our real estate strategy in the fourth quarter of 2016 and will carry that momentum into 2017. Overall, real estate transactions in fiscal 2016 generated cash proceeds of approximately $675 million, which is helping to fund continued reinvestment in the business. We also began work on deriving value from our partnership with Brookfield Asset Management. We are excited by the potential of our real estate strategy, and in 2017, we will focus on advancing the Brookfield partnership and continuing to monetize the locations that we have closed or plan to close. We are also developing strategies that will help create value for Herald Square while making the store an even more vibrant retail experience,” Lundgren added.

For the full year 2016, adjusted earnings (excluding items described below) were $3.11 per diluted share. This exceeds the company’s most recent guidance for 2016 earnings of $2.95 to $3.10 on the same basis. Fiscal 2016 comparable sales on an owned basis declined by 3.5 percent. On an owned plus licensed basis, comparable sales for fiscal 2016 declined by 2.9 percent. This compares to the most recent guidance for 2016 sales on an owned plus licensed basis to be down 2.5 percent to 3.0 percent.

Sales

Sales in the fourth quarter of 2016 totaled $8.515 billion, down 4.0 percent from total sales of $8.869 billion in the fourth quarter of 2015. On an owned basis, fourth quarter comparable sales declined by 2.7 percent. Comparable sales on an owned plus licensed basis for the fourth quarter were down 2.1 percent.

Sales in fiscal 2016 totaled $25.778 billion, down 4.8 percent from total sales of $27.079 billion in fiscal 2015. On an owned basis, fiscal 2016 comparable sales were down 3.5 percent. Comparable sales on an owned plus licensed basis for fiscal 2016 declined by 2.9 percent.

In fiscal 2016, the company opened 27 stores and closed 66 stores, all as previously announced. Macy’s, Inc. plans to close an additional approximately 34 stores over the next few years for a total of approximately 100 stores. New stores opened in fiscal 2016 included one Macy’s store in Kapolei, HI, 24 Bluemercury freestanding stores, one Macy’s Backstage freestanding store in San Antonio, TX, and one Bloomingdale’s Outlet in Orange, CA.

Operating Income

Macy’s, Inc.’s operating income totaled $815 million, or 9.6 percent of sales, for the fourth quarter ended Jan. 28, 2017, compared with operating income of $936 million, or 10.6 percent of sales, for the fourth quarter of fiscal 2015.

Macy’s, Inc.’s fourth quarter 2016 operating income included $230 million of impairments, store closing, and other costs. The $230 million included $38 million of asset impairment charges primarily related to the store closings announced in January 2017, $166 million of severance and other costs primarily associated with organizational changes and store closings announced in January 2017 and $26 million of other related costs and expenses. Excluding these items, as well as non-cash settlement charges related to the company’s retirement plans of $17 million, operating income for the fourth quarter of 2016 was $1.062 billion or 12.5 percent of sales.

Fourth quarter 2015 operating income included $177 million of impairments, store closing, and other costs. Excluding these items, operating income for the fourth quarter of 2015 was $1.113 billion or 12.6 percent of sales.

For fiscal 2016, Macy’s, Inc.’s operating income totaled $1.315 billion, or 5.1 percent of sales, compared with operating income of $2.039 billion, or 7.5 percent of sales, for fiscal 2015.

Macy’s, Inc.’s fiscal 2016 operating income included $479 million of impairments, store closing, and other costs. The $479 million included $265 million of asset impairment charges primarily related to the store closings announced in January 2017, $168 million of severance and other costs primarily associated with organizational changes and store closings announced in January 2017 and $46 million of other related costs and expenses. Excluding these items, as well as non-cash settlement charges related to the company’s retirement plans of $98 million, operating income for fiscal 2016 was $1.892 billion or 7.3 percent of sales.

Macy’s, Inc.’s fiscal 2015 operating income included $288 million of impairments, store closing, and other costs. Excluding these items, operating income for fiscal 2015 was $2.327 billion or 8.6 percent of sales. Continue reading

Ralph Lauren Corporation Strengthens Leadership with Chief Marketing Officer and Men’s Brand President Appointments

Jonathan Bottomley to lead enterprise-wide marketing and Tom Mendenhall to head all men’s brand functions

Ralph Lauren Corporation (NYSE:RL) announces two senior executive appointments, further solidifying its leadership team in support of its Way Forward Plan.ralph-lauren

Jonathan Bottomley has been named Chief Marketing Officer, a newly created role for the Company. He will be responsible for evolving Ralph Lauren’s brand voice, leading the global marketing team and building cut-through marketing strategies across the Company’s brands.

Bottomley joins Ralph Lauren most recently from Vice Media, where he served as Chief Strategy Officer. Prior to that, he was Chief Strategy Officer and Managing Partner in the London headquarters of Bartle Bogle Hegarty where he led strategic brand-building efforts for clients across the luxury and consumer lifestyle sectors. He will be a part of the Company’s Executive Team and dual report to Valerie Hermann, President of Global Brands and Ralph Lauren, Executive Chairman and Chief Creative Officer, on an interim basis. He will then report to the new CEO, once that appointment is made. He begins at the Company on April 3.

Tom Mendenhall has been named Brand President, Men’s Polo, Purple Label and Double RL. In this newly created role, all men’s brand functions will report into Mendenhall, including design and merchandising, and he will be charged with maximizing brand strength to improve sales growth.

Mendenhall joins Ralph Lauren from Tom Ford International, where he served as Chief Operating Officer for more than a decade, working alongside Tom Ford to build the brand from its inception. Prior to that, Tom was a Senior Vice President at Abercrombie & Fitch. He also spent eight years as Worldwide Director of Merchandising at Gucci. He will report to Valerie Hermann, President of Global Brands, and will begin with the Company on March 29.

Ralph Lauren said, “As we write our next chapter, we continue to add exceptionally strong leaders with the passion, energy, and talent to lead our Company into the future. Both Jonathan and Tom bring a fresh perspective and incredible depth of brand experience to Ralph Lauren. They each have impressive track records and we are looking forward to welcoming them into our leadership as our evolution continues.

Hermann added, “Jonathan and Tom will play critical roles as we move forward in our evolution as a brand and Company. Jonathan’s innovative, integrated approach will bring freshness and cohesion to our iconic marketing efforts, while Tom’s proven experience and recognized excellence in men’s will support our continued growth in this category.”

Macy’s Launches YYIGAL, an Exclusive Limited-Time Collection by Designer Yigal Azrouel

The New Line Of Architecturally Feminine Blouses, Dresses And Jackets Is Available Now At 149 Macy’s Stores And On Macys.Com

Macy’s has announced the release of an exclusive, new collection by famed designer Yigal Azrouel. YYIGAL, an architecturally-influenced, limited-edition line, embodies the sophisticated and feminine spirit of the Yigal Azrouel brand through signature tops, blouses, faux-leather motorcycle jackets, intricate dresses and a statement jumpsuit. YYIGAL is available at 149 Macy’s stores and on macys.com today.macyslogo

YYigal represents the effortless style, cool confidence and modern sophistication that is at the core of my brand,” said Yigal Azrouel.From the intricate lace detailing and architectural silhouettes, to the delicate draping that has become signature to my design; each piece was created to stand out and make the wearer feel empowered. This is my first collaboration with Macy’s, and they’ve been an incredible partner in helping bring my point-of-view to their customers.

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Macy’s exclusive, limited-time collection YYIGAL, by designer Yigal Azrouel, is available now at select Macy’s stores and on macys.com/yigal; Knit Lace Fit-and-Flare Dress $149 (Photo: Business Wire)

The dynamic line taps into the core aesthetic of Yigal Azrouel’s design DNA—as it combines delicate draping with expert construction, resulting in a collection that is fresh and modern, but also exudes the timelessness inherent in high style. Vivid prints are rendered in a refined color palette of black, white and blush, and lace embellishments, inserts and bodices are new and edgy interpretations of the traditionally hyper-romantic and feminine fabric. The pieces are reflective of Azrouel’s New York roots and global vision, and thoroughly embody today’s woman and her life. The clothing is bold and powerful, yet sophisticated and continental, and clean silhouettes make for easy wearing, day-to-night dressing. The effortlessly cool collection projects confidence, style and an ultra-chic urbane flare.

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Macy’s exclusive, limited-time collection YYIGAL, by designer Yigal Azrouel, is available now at select Macy’s stores and on macys.com/yigal; YYIGAL Printed Faux-Leather Moto Jacket ($179.00) and YYIGAL Lace-Trim Wide-Leg Jumpsuit ($149.00) (Photo: Business Wire)

Yigal Azrouel is an iconic New York designer known for his impeccable attention to detail and designs that make women look and feel amazing,” said Cassandra Jones, senior vice president of Macy’s Fashion. “He is a master at drawing inspiration from his various interests in travel, architecture, and of course, New York City, and creating breathtaking clothing that speaks to the modern woman. We’re bringing this seasoned, fashion-first practical approach to every day dressing to the Macy’s customer in a new way through this collection, and she’s going to love it.

The exclusive, limited-edition collection retails between $69 and $199, and is available in 149 Macy’s stores and on macys.com.

Nike Unveils Collection to Celebrate Air Max Day

Highlighted Includes Release of New Nike Air VaporMax

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Nike Unveils Collection to Celebrate Air Max Day (Photo Business Wire)

Three years ago Nike launched Air Max Day, a response to global fervor for one of the most beloved footwear platforms of all time. Today, Nike begins a journey to this year’s Air Max Day, a worldwide celebration of Air highlighted by the long-awaited release of the Nike Air VaporMax.

Nike will celebrate Air Max Day on March 26 by marking the 30th anniversary of the Air Max 1, the shoe that pushed footwear to unprecedented heights with new cushioning style and performance features. Throughout March, Nike will release a mix of retros, remixes, and innovations. This fresh line-up of Air, including the highly anticipated Nike Air VaporMax, represents the latest chapter of Nike’s longstanding commitment to serving athletes. The new product delivers on what consumers want, by transforming the athletic footwear landscape with the most powerful and resilient underfoot platform yet.womens-nike-air-max-jewell

The Nike Air VaporMax is a tremendous example of what happens when we harness the combined insights of our design collective. When designers embrace the technology and push its potential, we have a boundless future. Just as the Air allows us to run forever, it allows our imaginations to ponder near limitless permutations,” said John Hoke, Vice President, Global Design for Nike.

Air has been an integral part of Nike since it was first introduced in the 1979 Air Tailwind. In the decades since, it’s drawn strong consumer devotion; a massive and passionate consumer fan base that has driven design and depth of product. Nike Air has disrupted the industry with color, materials and the Air platform itself. For the first eight years, it was hidden – felt rather than seen. Then, in 1987, it became visible with Air Max. It soon evolved, spreading from running to basketball to training and tennis, all while becoming a coveted lifestyle product across the globe. The line quickly endeared itself to consumers because of its responsiveness to movement, its durability, and its groundbreaking and beautiful design.

Through it all, Nike Air technology has driven the industry forward and continues to define what’s possible with underfoot cushioning. With Nike Air VaporMax, athletes get closer to the sensation of Air than ever, with layers removed between the foot and the Air platform itself. This innovation and dedication have created a product that consumers are passionate about, and demand year after year – and the Nike Air Max delivers yet again.

In 2016, by popular vote, consumers “voted back” the Nike Air Max 1 atmos Elephant, which makes its return as part of the Air product line-up. The Women’s Nike Air Max Jewell is the second-ever women’s Air Max shoe. Nike Air Max 90 Ultra Flyknit delivers on what consumers expect, and ask for Flyknit, a high-performing, breathable, supportive upper; and Air, responsive, agile, strong, beautiful and light. Continue reading

“Taking it to the Street,” Americana Manhasset Releases Its 2017 Spring Campaign Fashion Lookbook & Video

This month Americana Manhasset debuts its full-color 64-page Spring Fashion book entitled, “Taking it to the Street.” Spring ready-to-wear, accessories and jewelry from the most coveted brands in the world are captured in a high-style picture book starring top runway models Grace Hartzel and William Los.

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‘Taking It To The Streets’ – Americana Manhasset Spring 2017 Lookbook – Bottega Veneta

Americana Manhasset is a premier collection of over 60 fine shops, including Hermès, Chanel, Louis Vuitton, Gucci, Cartier, Ermenegildo Zegna, Van Cleef & Arpels, Bottega Veneta, Hirshleifers, Ralph Lauren, London Jewelers and more, all within a unique outdoor environment designed by renowned architect Peter Marino and landscape designer Oehme van Sweden. Americana Manhasset offers a complimentary Personal Shopping Service, a remarkable luxury fashion, and gift resource. Located on Long Island’s beautiful North Shore, Americana Manhasset is 20 miles from Manhattan and 50 miles from the Hamptons.

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‘Taking It To The Streets’ – Americana Manhasset Spring 2017 Lookbook – Louis Vuitton

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‘Taking It To The Streets’ – Americana Manhasset Spring 2017 Lookbook – Zimmerman

Photographed, produced and styled by Laspata DeCaro, the campaign was shot throughout Los Angeles, from the skate parks of Venice Beach and the gritty sidewalks of downtown LA to the bougainvillea-lined boulevards of Santa Monica and the fringes of the Hollywood Hills.

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‘Taking It To The Streets’ – Americana Manhasset Spring 2017 Lookbook – Burberry

Continue reading

Retail News: Nordstrom Is Nation’s Favorite Fashion Retailer, New Market Force Study Finds

Annual Retail Study Also Uncovers Top Shoe Brands, And Trends In Consumer Confidence, Wearables And E-Commerce

Nordstrom’s fan base is as fervent as ever. For the fifth time in a row, Nordstrom ranked as the nation’s favorite fashion retailer in an annual retail industry study conducted by Market Force Information (Market Force). Market Force polled over 10,000 consumers for the study, which ranks top fashion retailers, reveals retail technology trends and looks at spending plans and habits.

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Market Force Information (Market Force) logo

The survey was conducted online in December 2016 across the United States. There was an overall pool of 10,714 respondents covering all four U.S. Census regions. Within the survey pool, 7,241 reported shopping for fashion at a favorite retailer within the past 90 days, and 5,494 reported shopping for shoes within the past six months. There was a broad spectrum of income levels, with 54% indicating incomes of over $50,000 a year. Respondents’ ages ranged from 18 to over 65. Approximately 75% were women and 25% were men. For the rankings, Market Force asked participants to rate their customer satisfaction with their most recent fashion retailer experience, and their likelihood to refer the brand to others. The results were averaged to attain a Composite Loyalty Score. Only retailers with at least 100 locations were included.

Dillard’s and T.J. Maxx Climb Higher in Rankings

Nordstrom, which has built a reputation for incomparable customer service, ranked first among the retailers studied with a score of 64%, up 6% from 2016. Dillard’s made even larger strides from last year, gaining 16% percentage points to rank second with 54%, and was closely trailed by off-price retailer T.J. Maxx, which earned a 53% score. Ann Taylor and Nordstrom Rack landed in the top of the rankings, after not making the cut last year, tying with Kohl’s for fourth place. [See Graph 1].

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Graph 1 – 2017 Fashion Retailer Rankings

Nordstrom Top for Value, Dillard’s for Creating Full Looks

In the attributes that set one retailer apart from the others, Nordstrom, Ann Taylor and Dillard’s all performed exceedingly well. Overall-winner Nordstrom ranked first for value, atmosphere, and ease of finding items, while Dillard’s took the No. 1 spots for creating a look and finding correct sizes. Ann Taylor landed in the top three in all of these categories. T.J. Maxx and Ross were called out for merchandise selection, and American Eagle has the fastest checkout speeds. [See Graphs 2 and 3].

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Graph 2 – Rankings by Attributes

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Graph 3 – Rankings by Attributes

Sizing up Sales Support

Despite the fact that sales assistance is shown to boost satisfaction and sales, less than half (42%) of consumers report being helped by an associate during their last shopping trip. Lane Bryant’s and Nordstrom’s associates assisted customers most often, while Target and T.J. Maxx shoppers received the least help. [See Graph 4].graph-4-sales-associate-effectiveness-by-retailer

Sales associates are the front-line representatives for retailers, and how they engage with customers can make or break the shopping experience and impact sales,” said Cheryl Flink, chief strategy officer for Market Force Information. “The research shows that 90% of customers who were assisted by a sales associate bought something. When customers were not assisted, only 82% made a purchase. That 8% difference in conversion rate is a key reason why fashion retailers need to invest in their sales staff.” Continue reading

Pendry Hotels Announces The Grand Debut Of The Pendry San Diego

Highly Anticipated New Luxury Brand Launch Sets the Stage with Premiere Opening in San Diego’s Gaslamp Quarter

Pendry Hotels has announced the grand opening of its first hotel in San Diego’s renowned downtown Gaslamp Quarter. A new luxury brand from Montage International, in partnership with The Robert Green Development Company, The Pendry is a refreshing take on the hospitality establishment that blends thoughtful and gracious service with a new approach to inspired design and authentic programming that appeals to today’s luxury guest. Pendry San Diego features 317 guest rooms, three dining concepts, three bars, Spa Pendry, private meeting and event spaces and a vibrant lobby experience.

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Pentry Hotels Logo

Pendry San Diego is located at 550 J Street, San Diego, in the epicenter of the city’s historic and energetic Gaslamp Quarter, blocks from Petco Park, the home of the San Diego Padres, and the San Diego Convention Center; and is the debut property from Pendry Hotels, a new luxury hospitality brand from Montage International. Located in the city’s renowned Gaslamp Quarter, Pendry San Diego strikes a balance between modern and traditional, pairing classic Southern California influence with luxury amenities. Boasting six unique restaurants and bars and highlighting some of the city’s most talented chefs, Pendry San Diego is the city’s most anticipated new hospitality and lifestyle offering. (For more information, follow @pendryhotels or visit www.pendryhotels.com.)

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Pendry San Diego. Photo Credit: Christian Horan

We are thrilled to debut the first Pendry hotel, Pendry San Diego, in the heart of San Diego’s Gaslamp Quarter,” said Alan J. Fuerstman, founder, chairman, and CEO, Montage International. “San Diego is the ideal city for us to launch the brand and we look forward to welcoming guests and locals alike to experience all that the hotel has to offer.”

From its early inception, The Pendry vision has been clear,” said Michael Fuerstman, creative director and co-founder, Pendry Hotels. “We wanted to take our extensive experience in hospitality and combine it with our vision of modern-day luxury and style; one that is rooted in local culture, beautiful design, international inspiration and authentic service. It’s a hotel experience that should feel organic and luxurious at the same time and the San Diego property will bring that vision to life beautifully. We are very excited to open our doors in the heart of the Gaslamp Quarter where we think locals and travelers will embrace and appreciate the Pendry point of view.

Pendry San Diego offers a dynamic hub where guests and visitors can work, relax, socialize and dine in one central location. Rooms are beautifully appointed with custom furnishings, luxurious bathrooms, and a sophisticated yet understated design nod to the city’s beach and surf culture. 36 suites offer stunning views of the city skyline and harbor, the historic streets of the Gaslamp Quarter or direct access to The Pool House outdoor deck. Guests and locals will enjoy a Tom Adler curated pop-up art gallery highlighting Ron Church surf photography. Each space within the hotel is rooted in design, culture and an inspired aesthetic that speaks to San Diego’s unique coastal voice and rapidly growing influence in arts, food, craft beer, and technology.

Pendry San Diego is home to the following restaurants, bars, nightlife, retail and wellness concepts:provisional-kitchen-at-the-pentry-san-diegoprovisional1

Provisional Kitchen, Café & Mercantile Designed in partnership with Raan and Lindsay Parton from Los Angeles’ Alchemy Works retail concept, Provisional is a restaurant and marketplace featuring seasonal fare and gourmet takeaway offerings from Executive Chef Chris Osbourne. The communal dining space features a Vittoria Coffee espresso bar, sky-high ceilings, bistro tables and a retail marketplace set within a greenhouse. The marketplace features a curated collection of items including homeware, ceramics, apothecary items, pantry staples, and jewelry.

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Nason’s Beer Hall

Nason’s Beer Hall A new addition to the famous San Diego craft beer scene, Nason’s is a California coastal establishment featuring local and international beers, global comfort food, and vintage bar games. Its name pays homage to Nason & Co. Farmer’s Market, formerly located in the current location of the beer hall in the early 1900’s. Continue reading