FROM THE DESK OF DEBORAH WEINSWIG

Retailers Are Clearing Out Old Merchandise To Make Way for the New Temporary store closures across the US began in the second half of March—one of the worst possible times for retailers, as it was at the end of the spring apparel season and just before the beginning of the summer season. Spring collections were therefore largely trapped inside closed stores, and summer collections—those that could not be canceled—were trapped on ships and inside warehouses. As stores begin to reopen with coronavirus lockdowns easing, retailers face a tough choice regarding what to do with their excess spring-collection inventory: If they have sufficient liquidity and wish to protect their brand, they can pack it away for next year or donate it; if not, then they can try to roll over the spring merchandise as the summer collection or find a channel in which to sell it, such as an outlet, an off-price store, a liquidator or the resale channel. For this reason, there is likely to be a large quantity of merchandise hitting the market this summer, from regular stores, retailers that are permanently closing stores (such as Nordstrom) and retailers that are liquidating following a bankruptcy filing. Discount and off-price stores were temporarily closed amid the retail lockdowns and so were not immediately available as a channel for offloading merchandise. Retailers such as Modell’s Sporting Goods and Pier 1 Imports were set to be liquidated but could not do so, since customers were unable to enter their stores, but easing lockdowns means that this is now changing. With more retailer bankruptcies and store closures likely to come, this could lead to additional discount sales and liquidations. Many retailers have elected to discount their merchandise steeply to clear inventory and position themselves to catch the remainder of the summer season and the back-to-school season, and move towards preparing for the holidays. Major retailers such as Gap, J.Crew and Nordstrom offered discounts of 40–70% in late April. One executive quoted by The Wall Street Journal commented, “It’s Black Friday in April,” meaning that many of the discounts offered were heavy enough to equal those of typical Black Friday sales. Even Amazon is jumping into the fray. Amazon Prime Day, which is normally scheduled for mid-July to reflect the anniversary of the company’s founding, has reportedly been pushed into September due to the e-commerce giant reconfiguring its supply chains during the outbreak to focus on household staples and medical supplies. The company’s supply chains have now largely returned to normal operation, and Amazon is reportedly scheduling a “summer sale” event from June 22, according to CNBC. The event is expected to run for seven to 10 days and will focus on “seasonally relevant deals from both established and smaller fashion brands.” In previous years, major retailers staged their own summer sales, such as “Christmas in July” or early Black Friday, to coincide with Amazon Prime Day. If Prime Day is indeed held in September, it could also function as a very early Black Friday sale. There are also several shopping festivals approaching, many of which are in China. Coming in mid-June is JD.com’s 6.18 Shopping Festival, which brought in $29.2 billion in GMV during the period of June 1–18 last year. We are also steadily approaching the biggest shopping festival of all, Singles’ Day on November 11 (also known as the 11.11 Global Shopping Festival), which generated $67.6 billion in GMV among Alibaba and JD.com last year—more than twice that of Cyber Week and Amazon Prime Day combined. Although Singles’ Day originated in China, it has steadily gained international acceptance and could represent an attractive opportunity for retailers to reignite shopping excitement among US consumers this year. Many retailers have elected to “rip off the Band-Aid” by taking some short-term financial pain through offering hefty discounts, which should cure their inventory overhang and position them to accept next-season merchandise. Although consumers have largely become accustomed to continuous discounting from some retailers, it is possible that this spate of unseasonal deals will lure them back into stores again. The Amazons of the industry continue to invent new shopping holidays, prompting other retailers to jump on the bandwagon and offer their own deals to consumers.

US RETAIL AND TECH HEADLINES

Dick’s Sporting Goods Revenues Tumble; Online Sales Strengthen (June 2) Company press release

• Dick’s Sporting Goods reported a 31% year-over-year decline in net sales for the first quarter, ended May 2, 2020. Same-store sales decreased 29.5% year over year, as a result of temporary store closures due to the coronavirus pandemic.
• Dick’s Sporting Goods posted a 110% year-over-year increase in online sales with an additional boost from curbside contactless pickup services. The company ended the first quarter with $1.5 billion in cash and cash equivalents and $1.4 billion in outstanding borrowings under its revolving credit facility.

Daniel Grieder Resigns as CEO of Tommy Hilfiger Global and PVH Europe (June 2) Company press release

• PVH Corp. has announced the resignation of Daniel Grieder, CEO of Tommy Hilfiger Global and PVH Europe. He has been with the company for 23 years and has served in his current role since 2014.
• Grieder will be succeeded by Martijn Hagman, effective June 2, 2020. Hagman is currently COO, Tommy Hilfiger Global & PVH Europe, and CFO, Tommy Hilfiger Global.

Land’s End Revenue and Profits Decline (June 2) Company press release

• Clothing and home-decor retailer Land’s End reported a 17.3% year-over-year decline in net revenues for the first quarter, ended May 1. The company’s net loss for the period widened to $20.6 million from $6.8 million last year.
• Company-operated stores saw 14.2% growth in comparable store sales in February before closing in mid-March. US online sales dropped 16.5% for the first quarter, and international e-commerce net revenues were flat.

Lowe’s Unveils Lowe’s for Pros JobSIGHT (June 1) Company press release

• Home-improvement retailer Lowe’s has launched a new, augmented-video chat tool called “Lowe’s for Pros JobSIGHT,” powered by real-time media intelligence platform Streem. The tool enables small businesses such as plumbers, electricians and other home professionals to virtually evaluate repair and maintenance projects with customers without entering their homes.
• The retailer aims to attract more business from professionals and encourage them to join its new ProLoyalty program via the new tool. In return, it offers users 5% discounts on selected purchases every day and zero interest for 60 days when using the Lowe’s business account.

Libbey Files for Chapter 11 Bankruptcy (June 1) Company press release

• Glass-tableware company Libbey has filed for Chapter 11 bankruptcy protection in the US bankruptcy court for the district of Delaware. Libbey has entered into an agreement with its lenders to provide up to $160 million debtor-in-possession financing, including a $100 million revolving credit facility and a $60 million term loan.
• Libbey plans to use the court-supervised restructuring process to stabilize its cash flow to withstand the impact of the Covid-19 pandemic and improve the company’s future standing. The company stated that its international subsidiaries in Canada, China, Mexico, the Netherlands and Portugal are not included in the Chapter 11 bankruptcy proceedings.

EUROPE RETAIL AND TECH HEADLINES

Hermes UK Launches Contactless Delivery Program MyPlaces (June 2) ChargedRetail.co.uk

• Consumer delivery company Hermes UK has introduced a new MyPlaces contactless delivery initiative. It enables customers to designate an exact three-square-meter location at their home address where their packages are to be delivered, using the geocode app What3Words.
• Customers can also upload a photo of the specific location, add pin codes for access to their property and chat with delivery drivers via the app to assist the delivery. Additional features will be rolled out later this year—such as selecting a ParcelShop & Locker location (parcel drop-off service) and adding waypoints for a designated delivery spot.

Tesco’s CFO Alan Stewart To Retire (June 2) Company press release

• Tesco has announced the retirement of CFO Alan Stewart, effective April 30, 2021. Stewart joined Tesco as a member of the Board and Executive Committee and has been with the company for six years.
• Tesco reported that it has started the hunt for a successor to Stewart. Current CEO Dave Lewis will also be leaving in September 2020, to be replaced by Walgreens Boots Alliance’s Ken Murphy.

Card Factory Online Sales Surge due to Coronavirus Lockdown (June 2) Company press release

• Greeting-card retailer Card Factory posted a 3.6% year-over-year decline in revenues for the financial year ended January 31, 2020. Pretax profit was down 4.4% to £65.2 million ($82.2 million).
• Comparable sales at cardfactory.co.uk increased 302% since lockdown and are up 153% year to date. Similarly, the company’s gifts website gettingpersonal.co.uk saw comparable sales grow 68% since lockdown and 27% year to date. The company did not provide financial guidance for 2021, given the uncertain economic conditions as a result of the coronavirus pandemic.

Co-op Expands Its Robot Delivery Service (June 1) Company press release

• UK food retailer The Co-operative Group has expanded its autonomous robot deliveries across eight stores in Milton Keynes to surrounding towns and villages. The retailer has experienced increased demand for robot delivery, with the value of transactions increasing four-fold amid the coronavirus outbreak.
• The service is priced between £1.49 and £2.49 ($1.88–$3.13) and offers a range of 1,000 everyday essential products and family favorites. Co-op started the service in April 2018 in partnership with Starship Technologies to test the emission-free, online, home delivery service.

ALDO UK Enters Administration (June 1) RetailGazette.co.uk

• The UK arm of Canadian footwear retailer ALDO has entered into administration due to the impact of the coronavirus crisis and has appointed accounting firm RSM as administrators. ALDO has permanently closed five stores, and administrators are exploring future options for the remaining eight.
• UK customers will still be able to purchase ALDO products online via ASOS and Amazon and at concessions in department stores. The company recently filed for creditor protection in Canada, the US and Switzerland and administration in Ireland.

ASIA RETAIL AND TECH HEADLINES

NIKE Thailand Opens Flagship in Bangkok (June 3) InsideRetail.Asia

• NIKE’s Thailand business has opened a flagship store at the shopping mall Siam Center in Bangkok. The store, which spans over 9,000 square feet, is operated by Malaysian luxury and lifestyle retail group Valiram.
• The flagship store offers customers one-on-one consultations with running experts and styling specialists, head-to-toe apparel fitting and footwear trials. The store also provides Thailand’s first in-store customization service for the brand “Nike By You.”

Foodpanda Singapore Collaborates with Guardian (June 3) IndsideRetail.asia

• Food-delivery platform Foodpanda has collaborated with health and beauty products retailer Guardian in Singapore, to deliver products from Guardian stores.
• Customers can choose from over 280 products, including health supplements, skincare and beauty products, and have them delivered within an hour.

Carrefour To Further Expand Store Footprint in Taiwan (June 2) Company press release

• French supermarket chain Carrefour has agreed to acquire grocery chain Wellcome Taiwan from Dairy Farm, with plans to further expand its store footprint in Taiwan. The agreement involves the acquisition of one warehouse and 224 stores, including 199 Wellcome and 25 Jasons stores.
• Carrefour intends to convert the Wellcome stores to the Market banner and Jasons stores to the Carrefour premium banner. The transaction is expected to close by the end of this year.

Flipkart To Re-Apply for Food Retail License (June 1) EconomicTimes.com

• Indian e-commerce platform Flipkart said that it would re-apply for a food retail license in India. Last week, the Indian Department for Promotion of Industry and Internal Trade (DPIIT) rejected Flipkart FarmerMart’s application to enter the food-retail business.
• The department stated that Flipkart FarmerMart’s memorandum of association does not permit it to retail food products. Last year, Flipkart FarmerMart had filed its application at the DPIIT to sell food products produced in India through Flipkart and other online platforms.

JD.com Kicks Off (June 1) Company press release

• Chinese e-commerce giant JD.com kicked off its annual 6.18 Shopping Festival on June 1. The first order was delivered in nine minutes, and JD.com has already put over 1 billion products in 730 warehouses in order to offer such rapid delivery to its customers.
• Within the first hour of the event, transaction volume increased 500% for apparel, 422% for footwear and 150% for home and life products, year over year. During the event, approximately 200 million new products will go on sale.