What Can Today’s Retailers Learn from the Captain of the Titanic? Plenty.

Like the captain of the Titanic, leadership of failed and failing retailers has been publicly, and occasionally brutally, criticized. In some instances, this criticism is clearly deserved, in other cases not.

It may not be as bad as it seems.

Despite the painful passing and decline of retail industry stalwarts including Linens ‘n Things, RadioShack, The Bon-Ton Stores, Toys R Us, Sears and Kmart, retail chains including Macy’s, Kohl’s, Walmart, Target and other major retailers are showing financial improvement. Macy’s stock price is up 40+ percent year-to-date, Kohl’s is up 30+ percent, and Target is up 25+ percent. The rumors of the death of brick-and-mortar retail have been greatly exaggerated. And, Sears, Kmart and JC Penney are still open for business.

Recently, I participated in the Annual Retail Forum at Columbia Business School where a keynote speaker addressed a question from the audience: “

How would the speaker approach the precarious position of a challenged major retailer? What steps would you recommend?”

The response was,

“Shut it down…they don’t deserve to stay in business.”

This, “throw in the towel,” response brings to mind a key question we should ask ourselves. What would we do if we found ourselves as CEO of a retailer at risk of complete cataclysmic failure? One obvious metaphor is that of being captain of the Titanic. You may not remember, but the Titanic had a bonafide captain: his name was Edward John Smith.

Continue reading “What Can Today’s Retailers Learn from the Captain of the Titanic? Plenty.”

Stitch Fix Drops a Stitch. What’s the Fix?

Brief:

  • Stitch Fix on Monday reported that fourth quarter net revenue rose 23% to $318.3 million, at the upper end of the company’s guidance but “a touch” below Wall Street estimates, as Wells Fargo analysts, led by Ike Boruchow, said in a Monday note. Shares plunged more than 20% after the report Monday evening, per MarketWatch.
  • The company’s earnings before interest, tax, depreciation and amortization also surpassed its own expectation, reaching $11.1 million as net income in the quarter reached $18.3 million, according to a company press release and executive comments during a Monday conference call transcribed by Seeking Alpha. The online box styling service’s active client count (as of July 28) rose 25% or 548,000 to 2.7 million.
  • On Monday, Stitch Fix also said that signups are now open for customers in the United Kingdom, where it will expand by the end of fiscal 2019, its first launch overseas. The U.K. was chosen because consumers there already buy a lot of clothing online, don’t expect as many discounts as consumers in the U.S. and offer opportunities for personalization, CEO Katrina Lake told analysts on Monday.

Dive Insight:

Continue reading “Stitch Fix Drops a Stitch. What’s the Fix?”

Everything That Can Be Invented Has Been Invented

In 1889, Charles H. Duell was the Commissioner of US patent office. He is widely quoted as having stated that the patent office would soon shrink in size, and eventually close, because…

“Everything that can be invented has been invented.”

Charles H. Duell*, 1899

The “Eureka” effect is based upon an ancient myth regarding the Greek mathematician Archimedes, who upon discovering how to measure the volume of an irregular object, supposedly leaped out of a public bath, and ran home naked shouting “eureka,” (I found it).

Most of us would agree that there is still much to be invented and discovered. We tend to think these new “inventions” will be more extraordinary, advanced and innovative than those which preceded them. This is not entirely true. Many prior advances were revolutionary and extraordinary. An invention need not be revolutionary, or even unique, to be significant. Finally, many “new” inventions are derivative of their predecessors.

From door locks to light bulbs, shovels to toilets, and the classic mouse-trap, innovation comes in many forms and from many directions, often right under our noses. Sliced bread? Bottled water?

Nothing is so basic, or so great, that it cannot be made better. Continue reading “Everything That Can Be Invented Has Been Invented”

Vegan Stan Smiths, a Birthday Present for Stella McCartney.

The British designer, a champion for cruelty-free fashion, has used “vegan” animal-free leather to create a sustainable take on the iconic adidas tennis shoe.

“Many years ago, I was given a special pair of vegetarian leather Stan Smiths by my husband and Adidas,” she told Vogue Magazine. “It occurred to me that you really couldn’t tell the difference between the real leather and the faux leather pair. I could not help but think of how many animals’ lives could be saved if Stan Smith and Adidas would change from real leather to vegetarian leather, and use non-animal-based glues.”

The “Stella Stan Smith” looks nearly identical to the classic, except for a few details: Instead of a Kelly-green heel, the shoes feature a burgundy and navy color-block stamped with McCartney’s logo. The stripes down the side are replaced with tiny punched-out stars, a McCartney motif, and while Stan Smith’s profile remains on the right tongue, the left one features Ms. McCartney.

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The shoes are available for sale, today, in time for Stella McCartney’s birthday, and fashion week – they retail for $325.

 

 

New York Fetes Ralph Lauren During Fashion Week. And Vice Versa.

Happy 50th anniversary Ralph Lauren.

The weather, although warm, was pleasant. A good thing, as the celebration during New York Fashion Week (NYFW) was held in Central Park at Bethesda Terrace.

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The guest list included fashion icons Calvin Klein, Donna Karan and Anna Wintour (of course); also, Steven Spielberg, Kanye West, Chance the Rapper, Anne Hathaway, and Jessica Chastain.

Hillary Clinton, who often wears Lauren’s clothing, was present. Yet it was Oprah Winfrey who was most quotable. ”Your story exalts our collective story,” Oprah said. “Your designs define integrity.”

It was Oprah who toasted Lauren.

“The real reason we are here is not the show,” she said. “It’s you. You Ralph Lauren, and 50 years of your designing our dreams. When I first moved to Chicago and was making enough money to pay my rent… and still had something left over, I thought I was a success. My idea of celebrating that success wasn’t to go out and get a fancy car, or art or jewelry… it, was a Ralph Lauren bath towel that I had [craved] for over 10 years.”

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Designer Ralph Lauren holds a child model after his 50th anniversary fashion event during New York Fashion Week in New York

Investing in Retail Stores

What apocalypse?

The Tiffany & Co. building on 5th Avenue & 57th Street in New York City may be the most enduring example of what traditional retailing looked like before the Internet arrived. So it’s striking that the Tiffany & Co. of 2018, faced with an onslaught of online ecommerce, is responding by making a big new bet on that big old store. It’s investing $250 million in the 78-year-old flagship.

It turns out that all over the disrupted and evolving retail sector, companies are rethinking the mantra that the future is digital, and are pouring money into actual brick-and-mortar stores. 

Three blocks west of Tiffany’s flagship store is the new 47,000 sq. ft. Nordstrom‘s Men’s Store with a full store opening next door. And, Target has committed $7 billion to upgrade operations, and while the Minneapolis retailer hasn’t disclosed how much of that will go to improving physical locations, a spokeswoman said stores are an “incredibly important linchpin.”

Why? Because the bulk of America’s retail is still done the old-fashioned way, in stores…

{An “Apocalypse” is an event involving destruction on a catastrophic scale. Whereas “evolution” is the development of something, especially from a simple to a more complex form.}

There’s a lot of unknown, out there…

“Last year, Randa created a division devoted to honing its digital offerings, optimize data collection for its direct-to-consumer operations, as well as to assist retail and brand partners.

Randa Digital Labs is responsible for, among other projects, online content for each of its products, provided to retailer partners free-of-charge, establishing a basic standard for content when an online retailer sells a Randa-made product.

“If someone is putting Levi’s belts as a third-party seller and taking horrible photography, RDL assures that adjacent pages are populated with wonderful storytelling and great photography,” David J. Katz, Randa CMO said.

If Randa’s recent bid for Perry Ellis is any indication, the company is aiming to write the rules itself and remain on the prowl for M&A targets that could further elevate its enterprise to beyond just manufacturing.

“There’s an awful lot of unknown out there,” Katz said. “What’s not healthy is trying to hold onto an old model.”

– Excerpt from Business of Fashion

Faded Department Store Brands Search For New Identity Online

“Brands and the licensees that make their clothes are rewriting the rules of retail as they work together to court the modern consumer and compete online.” BY CATHALEEN CHEN,  AUGUST, 2018

What I learned from playing a doctor on TV

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Zach Braff as JD Dorian, “Scrubs” — © ABC/Disney

I’m not a doctor, but I really did play one on TV.

25 years ago, I sold consumer products, mostly luggage, to HSN and QVC. I hired a “guest host” to appear on-air, to work with the network “show host” and to demonstrate our products. One day the guest host was delayed, and I ended up with make-up on my face, a microphone up my shirt and an IFB in my ear. Continue reading “What I learned from playing a doctor on TV”

For legacy companies facing disruption, corporate innovation won’t be enough

Today corporate innovation is all the rage. Large companies host accelerators, launch internal startups, and court potential startup partners in a quest to harness young companies’ innovativeness and energy for themselves.

But large legacy companies shouldn’t throw the baby out with the bathwater by neglecting their core business and assuming it has minimal room to grow.

In this article, I will detail how our company, Randa Accessories, grew from 25 to 50 percent market share in several categories and channels by focusing on its core business and adjacent “bridge” categories, and offer some takeaways for other businesses based on that experience. (I will also describe how Randa launched its own successful internal startups — I’m not saying corporate innovation isn’t useful, just that it needs to be one part of a broader strategy to excel.)

First, a little about Randa. You many not know our name, but you know our products. Our products are available under 50 brands, and are sold at over 20,000 points of sale, and millions of digital touch points.

We’re the world’s largest men’s accessories company. We sell ties, and belts, wallets, bags, hats, slippers and luggage.

Randa is completely vertical, business-to-business and direct-to-consumer, with 4,000 employees working from 23 global offices.

Our culture emphasized growth and efficiency and led us to success in revenue, margin, penetration, and market share.

For example, we’re the leading supplier of belts to Nordstrom… and to Walmart, to Kohl’s and to Amazon, and The Hudson’s Bay, Liverpool, Printemps, El Cortes Ingles, David Jones, John Lewis and to Costco.

We spent over $50 million to assure that when a consumer walks into a retail store for pants, they immediately see our belts nearby. Dress shirts? There are our ties…

And then, we hit a wall. 

Continue reading “For legacy companies facing disruption, corporate innovation won’t be enough”

The End of Mass Marketing: Go Small, or Go Home

Once upon a time… business success was based on providing a narrow segment of consumers with a narrow segment of products, uniquely suited to their needs, sourced and advertised locally, and sold at a local store.

Over time, the spread of mass media — TV, national newspapers and magazines — along with the expansion of national retail stores, and the growth of a global and highly efficient supply chain, led to a world of mass marketing, mass production, and massive retailers. The retail world moved from personalized products for localized, niche markets to mass-produced products for mass markets.

Mass marketers thrive on “must-have” items — huge volumes of single styles, sold across many market segments to an audience of consumers eager to have the item they saw advertised in mass media, and which, in turn are produced in great scale and efficiency.

This strategy worked. Until it didn’t.

Continue reading “The End of Mass Marketing: Go Small, or Go Home”