Retailers: New Strategies for this Holiday Season

November 13, 2009, 3:57PM EST

Stocked with "cautious optimism," early markdowns, and lower inventories, stores hope to avoid repeating the 2008 holiday sales debacle

By Esmé E. Deprez

As the holiday shopping season kicks into gear, retailers and industry experts are expressing "cautious optimism," a phrase that has become a ubiquitous stand-in for predicting good news in the current economic climate. Attracting consumers to stores through early promotions and discounts—as well as going into the season with lower inventory levels—are among the tactics retailers are adopting to deal with shoppers, who remain skittish about the future.

It's too soon to say if it's working. The U.S. Commerce Dept. is scheduled to report October figures for consumer spending on Nov. 25 amid expectations of a slight bump up from September's 0.5% fall. "We're looking at modest sales increases for the holidays and don't expect the degree of markdowns" that retailers needed to introduce late in the season to move product, says Brian Sozzi, a retail analyst at Wall Street Strategies.

Hoping to avoid a repeat of last year's holiday shopping results—often described as one of the worst on record—retailers will likely regard slender or stagnant sales as a success. Recent third-quarter earnings reports from major retailers have showed mixed results. Wal-Mart (WMT)—the world's largest retailer and regarded as a bellwether for the overall vigor of consumer spending—reported on Nov. 12 a revenue increase of 1.1%, while same-store sales dropped 0.4%. Revenue fell 3.2% at J.C. Penney (JCP), the company reported on Nov. 13, while same-store sales dropped 4.6%, although Penney improved its full-year profit and sales outlook with fewer discounted items on offer.

October statistics reported on Nov. 13 in the Deloitte Consumer Spending Index, which tracks consumer cash flow as an indicator of future consumer spending, rose in October for the fifth consecutive month, to 4.1%, from September's upwardly-revised 3.6%. The calculation takes into account the tax burden (the percentage of income that one pays in taxes), which has recently been stabilizing; initial unemployment claims, which continue to drop from their March peak; real wages, up almost 5% from a year ago; and real home prices, declining at a slower pace.

Signs that spending has stabilized>>>

Hearst Signs On in Beauty Contest

• AUGUST 31, 2009

By SHIRA OVIDE and EMILY STEEL

Hearst Corp. hopes a new Web site and growing interest in the Internet among beauty-products makers will translate into a fresh source of advertising for the publishing giant.

In September, Hearst plans to launch a site called Real Beauty, which will focus on makeup, hair care and other beauty topics. The venture is an effort by Hearst to create a one-stop destination for consumers who want to research and buy beauty products. It will be competing with a vast field of more specialized beauty blogs as well as sites operated by various cosmetics brands and retail chains.

Daily Makeover

Daily Makeover, whose virtual makeover program, above, lets women try out beauty products and hairstyles, is among the new Hearst venture's rivals.

Hearst says the site will mix advice from customers with product reviews and information from its magazines, which include Cosmopolitan, Seventeen and Harper's Bazaar. Users of the site will be able to customize information so, for example, a woman with curly hair won't see articles about straight hair; she also may get discount offers from salons specializing in taming frizzy locks.

Beauty brands have been slower than other marketers to advertise online, largely because of concerns that the Web could never match the in-store experience of trying out beauty aids.

Companies spend about $6 billion a year to hawk personal-care products, a category including beauty, shaving and hair care, but only 3% is spent online, excluding search ads, according to TNS Media Intelligence, an ad tracking firm owned by ad giant WPP.

However, research released in May by>>>

Fashion Channels the Steve McQueen Mojo

• SEPTEMBER 2, 2009

By RAY A. SMITH

See Corrections & Amplifications below

Steve McQueen died in 1980. Today, he is a rising star in menswear.

Dolce & Gabbana has created a line of $285 T-shirts decorated with pictures of the 1960s and '70s star for spring, building on the success of a limited-edition line in spring 2008. Thom Browne, a designer known for his extremely fitted clothing, cites Mr. McQueen's look in "The Thomas Crown Affair" as an inspiration. Pictures of Mr. McQueen adorn the "mood" bulletin boards used in-house to inform J. Crew's collections, says Frank Muytjens, head of men's design. The retailer carries off-white, slim-fitting corduroy pants and Baracuta jackets like the ones the actor wore; it even styles outfits in its catalogs based on photographs of him.

'The King of Cool' a Fashion Icon, Too

View Slideshow

Warner Bros/Kobal Collection

Steve McQueen, shown here on the set of the 1968 movie “Bullitt,” has had a lasting influence on menswear and recently inspired a new clothing line.

Furthermore: Gucci featured racing-driver looks inspired by Mr. McQueen in its spring 2008 runway show, A.P.C. sells a bomber called "the old-school jacket" that looks like the Harrington jacket Mr. McQueen wore, and Hermès and Michael Kors have recently based clothing and bags on the man once dubbed the "King of Cool."

With so many brands channeling Mr. McQueen—Tag Heuer and Persol have resurrected a watch and aviator shades identified with him—perhaps it was only a matter of time before there was a Steve McQueen clothing line. Such a collection quietly made its debut last winter and will be carried this fall in stores including Saks Fifth Avenue and Nordstrom.

The made-in-America line was produced with>>>

House-Brand Menswear That Aims to Be a Cut Above

• JULY 30, 2009
  

By CHRISTINA BINKLEY

Passersby along New York’s Fifth Avenue will soon see a change at Saks Fifth Avenue: Rather than a designer collection, a corner window will announce the department store’s own new line of menswear.

While the store doesn’t go so far as using the term “house brand,” which sounds too lowbrow, it is emphasizing value with its new venture. The “Men’s Collection” is an unusually comprehensive, soup-to-nuts line of everything from suits to shirts, socks, ties and shoes, manufactured at many of the same factories used by European designers but priced at about half of today’s designer levels. The collection is trickling into New York now, and will be at Saks stores around the country by mid-August.

View Slideshow

Joe Fornabaio for The Wall Street Journal

Saks and Bloomingdale’s are re-emphasizing their private-label brands, hoping to appeal to customers seeking value. Bloomingdale’s: The Men’s Store (on model, left) and Saks Fifth Avenue Men’s Collection (on model, right) are offering classic clothes with current cuts.

Bloomingdale’s, too, is rethinking its house brand. This summer and fall, Bloomies is retiring its two house brands—Joseph & Lyman and Metropolitan View—and replacing them with “Bloomingdale’s: The Men’s Store.”

These are the latest examples of how this lemon of an economy is making lemonade for consumers. There’s a renewed focus on value, as opposed to glitz and celebrity names, at every level of fashion from Target to Ungaro.

By focusing on house brands>>>

10 Things We Overpay For

You can save big by buying cheap alternatives instead.

By Joan Goldwasser, Senior Reporter, Kiplinger's Personal Finance

March 6, 2009

Does the avalanche of news about layoffs, business losses and a declining stock market have you looking for ways to cut your spending so you can beef up your savings? We're here to help, with suggestions for less-expensive alternatives to ten everyday purchases (for more ideas, go to www.BillShrink.com, which tracks cell-phone plans and credit cards).

Afternoon snacks. Do you munch protein bars as a healthier alternative to a chocolate pick-me-up? You could easily be paying more than $2 per bar and consuming just as much sugar as you would with your favorite candy bar. Stock up on fruit for a fraction of the cost when you do your grocery shopping. You'll be fitter and save a bundle.

Bottled water. Yes, it's important to drink water every day. But picking up the bottled variety with your lunch is an expensive way to stay hydrated. Rather than spend $2 a day for water, buy a pitcher and a filter for about $20 and drink as much as you want for pennies a glass.

A caffeine fix. Can't get through the day without at least one cuppa Joe? Stopping at Starbucks or Dunkin' Donuts can set you back as much as $1.65 per cup. Splurge on a pound of gourmet coffee for $8 to $13 and you can make 40 cups for about 20 cents to 33 cents each.

Favorite tunes. Do you rush out to buy>>>

When Is the Best Time to Buy...?

Monday, July 27, 2009

This article is part of a series related to Financially Fit

Timing is everything. To get the best deals, you've got to know when to shop.

There are some purchases that are difficult to time perfectly, such as stocks, airplane tickets and gas. But many other consumer staples -- from cars to electronics to furniture -- go on sale predictably at certain times of the year, saving you a bundle if you plan your purchases accordingly.

Check out a selection of the best buys for every month of the year:

January: Linens

It may be cold outside, but you can make the indoors warm and comfy -- and save money in the process -- by shopping department stores' "white sales" in January.

It's not uncommon to find discounts of 10% to 60% on sheets, blankets, towels and more (and not just in white).

January/February: Digital cameras

With the Consumer Electronics Show and Photo Marketing Association convention at this time of year, new camera models start arriving at retailers. That means deep discounts on last year's perfectly good merchandise.

March: Frozen food>>>

America's Most Endangered Malls

• By Rick Newman
• On Friday June 26, 2009, 1:58 pm EDT

Birmingham's Century Plaza mall was a consumer mecca when it opened in 1971, drawing shoppers from outlying suburbs and even from other states. Over the years, however, people moved outward from central Birmingham, and new shopping centers sprouted around them. Sales at Century Plaza declined. Three of the mall's four big "anchor" tenants eventually left, and smaller retailers followed. By 2008, Century Plaza was a shadowy hulk with more shuttered stores than open ones. Then the last anchor tenant, Sears, announced it was leaving. The mall finally closed for good in early June.

[Slideshow: America's Most Endangered Malls]

Malls have a natural lifespan, as population centers shift, architecture evolves, and shopping habits change. But a sharp recession is clearly accelerating the demise of vulnerable retailers--and some of the shopping centers they inhabit. Plunging sales are one obvious reason. Many retailers are also saddled with heavy debt taken on in recent years to fund aggressive growth. And the credit crunch has made cash scarce for firms that need it most.

Those tough conditions have already driven retailers like Circuit City, Linens 'N Things, and Steve & Barry's out of business. Other chains are closing stores and slashing costs as they fight to survive. General Growth Properties, a Chicago firm that operates more than 200 malls--and owns the remnants of Century Plaza--declared bankruptcy in April and is working on a restructuring plan.

[See America's most profitable malls.]

The churn is transforming America's retail landscape. "During times like this, good malls tend to get better and bad malls tend to get worse," says Steve Sterrett, chief financial officer of Simon Property Group, the nation's largest mall operator. The first sign of trouble is often the departure of department stores and other anchor tenants, especially if those spaces stay vacant. High-quality, name-brand merchants often follow, with discounters--or nobody--replacing them. Shoppers sense the ennui, and gravitate toward malls that feel more vibrant, which only deepens the distress at troubled properties. By some estimates, about 10 percent of the America's malls could close within the next few years.

To gauge which malls are in trouble, U.S. News analyzed data from Green Street Advisors, an investment research firm in Newport Beach, Calif., that specializes in publicly owned real estate companies. Their data includes occupancy rates, sales per square foot, and quality grades for about 650 of America's biggest shopping centers. The average property in the data set has sales of about $420 per square foot and an occupancy rate of 92 percent, good for an A- grade.

[See how to tell if a mall is in trouble.]

The malls at the bottom of the list earn grades of C- or D>>>