Five Below is Way Above

November 11, 2018November 11, 2018 ~ David J. Katz ~ Leave a comment

Five Below, Inc., which sells everything from basketballs to yoga mats for $5 or less, might be the most successful retail chain you’ve never heard of.

Five Below’s store count has quadrupled to 750 since its 2012 IPO, with its first NYC location opening Friday. Sales have tripled to $1.3 billion and profits are up. Preteens and teens are Five Below’s core customers. They are encouraged to bounce balls, test-drive RC cars and participate in slime-making—anything that will help them spend their allowance money.

Five Below has items for grown-ups, including cucumber face-masks, storage bins and vintage candy. The company focuses on the treasure-hunt for unique items, not essentials.

As with Costco Wholesale, Walmart, Dollar General and The TJX Companies, Inc. the culture at Five Below keeps costs, and prices, low. The company ships basketballs deflated, without boxes, lowering freight costs, and then inflating once they arrive at the store.

Most products are created from scratch & at these prices ecommerce sales are negligible; shipping costs more than the entire purchase. Similar items are considerably more expensive at Amazon.

Suzanne Kapner, The Wall Street Journal

Amazon HQ USA

November 11, 2018November 11, 2018 ~ David J. Katz ~ Leave a comment

SEATTLE — After a search for a new location lasting more than a year, a massive dome was seen descending from the sky and enclosing the whole nation as Amazon CEO Jeff Bezos announced to a horrified American populace that it was now living inside his company’s second headquarters.

The impenetrable steel dome, which reportedly stretches from coast to coast and from the Mexican to the Canadian border, will house a state-of-the-art campus that serves as the online retailer’s long-awaited new base of operations.

Amazon executives said that while they were impressed with the many proposals they received from cities across the country, they ultimately decided the location best suited to their ever-growing needs was the entirety of the continental United States.

“For the sake of convenience, your Prime membership fees will be automatically deducted each pay period, and all wages will be paid in the form of Amazon gift cards. What’s more, every employee in good standing will receive one free Audible download per month!”

– The Onion

In reality… sort of: After conducting a yearlong search for a second home, Amazon has switched gears and is now finalizing plans to have a total of 50,000 employees in two locations.

The company is nearing a deal to move to the Long Island City neighborhood of Queens, AND the Crystal City area of Arlington, Va., a Washington suburb.

Amazon already has more employees in those two areas than anywhere else outside of Seattle, its home base, and the Bay Area.

$1 billion in 85 seconds

November 11, 2018November 11, 2018 ~ David J. Katz ~ Leave a comment

$1 billion in the first 85 seconds. Not a bad start to the world’s biggest shopping day. China’s largest company,

Alibaba Group, used televised entertainment featuring Cirque du Soleil Entertainment Group and Mariah Carey to drive awareness. It is reported that Xiaomi Technology, Apple and Dyson products were the top three brands in early sales.

The e-commerce giant is on course to rake in over $25.5 billion in online retail sales today during Singles Day 2018, already ahead of last year, with a few hours to go. That’s more sales than the U.S. Black Friday and Cyber Monday combined. And, it’s greater than Macy’s or Kohl’s annual sales volume.

Celebrating “bachelors” and others not in committed relationships, Singles Day occurs annually on November 11th (11/11) or “double eleven,” because the four numerals “1” represent single people.

Singles Day has already generated 1.5 billion transactions, at a peak rate of 350,000 orders per second. Over 90 percent of sales came from mobile devices.

This year’s event may provide insight into consumer sentiment as a slowing Chinese economy and tariff trade war threaten to dampen the world’s second largest economy. Alibaba reduced its revenue forecast by 6% earlier this month.

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

October 3, 2018October 3, 2018 ~ David J. Katz ~ Leave a comment

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?

October 2, 2018October 2, 2018 ~ David J. Katz ~ Leave a comment

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

September 11, 2018September 5, 2018 ~ David J. Katz ~ Leave a comment

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.”

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.

September 10, 2018 ~ David J. Katz ~ 1 Comment

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.

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.

September 8, 2018 ~ David J. Katz ~ Leave a comment

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.

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.”

Investing in Retail Stores

September 4, 2018September 3, 2018 ~ David J. Katz ~ Leave a comment

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…

August 29, 2018 ~ David J. Katz ~ Leave a comment

“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