A robust commerce network is crucial for retailers, suppliers and brands that aim to win in today’s Now Economy, where consumers expect a vast array of products to be available and delivered to their doorstep almost instantly. In fact, the ideal is an ever-growing partner network, in which thousands of brands, suppliers and retailers work together to help their businesses grow.

Such a network, built with a great software platform to support a virtually limitless ecosystem of partners, can enable retailers to save time by tapping into a community of pre-vetted brand partners who’ve demonstrated their ability to perform strongly — enabling retailers to meet consumer demand by custom-tailoring marketplace and drop-ship business models. At the same time, a leading-edge commerce network should help supplier brands expand their footprint by expanding their connections with national-scale retailers. Together these connections accelerate businesses across the ecosystem.

The power behind this kind of network is the ability to leverage data to match each retailer with their ideal brand partners — and vice versa. Let’s take a closer look at how all these parties stand to gain when such a platform connects them into a dynamic, thriving and profitable community.

An extensive commerce network adds value by more efficiently creating partnerships between retailers and supplier brands.

In the past, brands and retailers had to waste weeks at tradeshows or other similar tactics, trying to track down the partners who fit their needs. This was a time-consuming and tedious process: A retailer might only have time to talk to 200 brand vendors out of 1,000 at a tradeshow; and even worse, the brand representatives they spoke to might not be aware of their companies’ drop-ship capabilities or might not have accurate marketplace performance data.

A modern commerce network seeks to eliminate this outdated model and bring the matchmaking process into the 21st century, with hundreds of robust brand and retailer profiles, along with proprietary analytics on each of those partners’ capabilities and performance. The network’s administrators should examine each member’s requirements, then present other partners with curated lists of qualified collaborators who meet their qualifications and have proven they can deliver on crucial KPIs. 

Plus, relationship managers should continually rework their recommendations to present even more precisely tailored selections to members over time. That means suppliers and retailers save time by only talking with, say, 15 qualified leads instead of 200 company reps — secure in the knowledge that all 15 of those leads meet their requirements, and have demonstrated their ability to fulfill that partner’s merchandising goals.

The more a commerce network grows, the more partners it attracts — and the more they can be vetted.

It’s not always easy for supplier brands or retailers to connect with an actual decision maker on the other side. In fact, on both the retailer side and the supplier side, that’s half the battle: Knowing who’s on the other end is actually aware of the drop-ship and marketplace capabilities (or interest) and is also empowered to make decisions. A data-driven partner network can connect the right people at all those organizations — providing significant value, keeping all partners engaged and serving as a flywheel to keep the network growing.

How can a network attract an ever-growing list of partners? By confirming interest and demonstrating value across the ecosystem. Everyone who participates in the network stands to benefit from its strengths — both in terms of access to new opportunities, and in saving time by avoiding interactions with parties who don’t fit their current needs. 

For example, a retailer could spend months com-shopping to figure out which footwear suppliers are selling well through their retail competitors — or you could join a collaborative network, and get a tailored list of the top-performing suppliers in any category they specify. The network’s relationship managers can make sure every one of those leads is qualified and has demonstrated impactful performance. Another example: retailers looking to find more partners who align with their brand and specific goals around diversity or sustainability, can turn to the network for easier access to qualified suppliers.

Today’s retail models are fast-changing and flexible. A commerce network should be, too.

Back in the day, drop ship was seen as an operational function, owned and managed by operators. Today, by contrast, a collaborative network can plug directly into a retailer’s drop-ship or marketplace model, and deliver product capabilities with the flexibility to adjust each decision on a channel through which a product might be sold. But that’s just the beginning. A data-driven networking platform provides the flexibility to explore unified models that combine the best of both worlds: the low-risk aspects of a marketplace model as well as the power of a drop-ship model.

All these wins come from membership on the network. It’s all about the partnerships, from which all players stand to benefit. For supplier brands and retailers, CommerceHub has an extensive network for collaboration, and the matches we make are multiplying every day. So, here’s to the future of increasingly collaborative, data-driven retail.

Source link

Keeping up with demand and ensuring a frictionless customer experience throughout peak season requires visibility, flexibility and quick action from retailers. That extends to how they manage their inventory. 

Overstock and middle-mile constraints due to labor and asset shortages are two big issues plaguing retail, says Dennis Moon, chief operating officer at Roadie, an on-demand crowdsourced delivery platform. 

In response, he says, retailers should look for multithreaded operations and fulfillment solutions that can improve their responsiveness while acting as a fail-safe. In addition to aligning with strategic fulfillment partners who can quickly scale and retract based on customer demand, retailers can also take a pragmatic and sustainable approach to their warehouse logistics and inventory management.

Let’s look at three best practices Moon suggests for making sure inventory is where you need it, when you need it, during peak season.

1. Take a hybrid approach to inventory management

The just-in-time (JIT) approach to inventory management requires retailers to run lean, bringing inventory in when needed. In contrast, the just-in-case (JIC) approach favors stockpiling inventory to minimize risk.

Retailers generally aspire to JIT, allowing them to lower overhead costs and improve cash flow. But without the extra stock to act as a buffer, any interruptions to plan (such as bad weather) can slow or stop shipments. As a result, many retailers are resorting to JIC as supply chain disruptions and the ongoing talent war threaten their ability to meet demand. But holding extra inventory comes at a cost many retailers simply can’t afford.

Instead, retailers can benefit from a hybrid approach, using JIT where they safely can and JIC where they must — all with careful and strategic placement of inventory.

Rather than carrying extra inventory to soften the impact of underlying operational issues, the resulting hybrid model focuses on addressing root causes. 

“By increasing inventory visibility, improving operational efficiencies and building flexible fulfillment capacity, retailers can minimize the need for costly safety stocks while carving out their competitive advantage,” says Moon.

2. Design your warehouse for efficient inventory movement

Moon also warns that when demand surges exceed retailers’ delivery capacity, inefficiencies can lead to lost opportunities and increased costs — not to mention disappointed customers.

Here are a few actions you can take to make sure your warehouse is firing on all cylinders this peak season:

  • Increase your inventory accuracy by doing a total pre-season physical inventory count.

  • Optimize picking and packing workflows so fast-moving products are easy to access.

  • Dedicate an ample, conveniently located space for staging deliveries.

  • Batch and route deliveries based on geographic location or delivery deadlines to save money without sacrificing time. 

  • Clearly label orders for fast and efficient pickups (ideally with the help of technology that increases accuracy, such as barcodes or RFID).

  • Look for opportunities to optimize your facility’s footprint by consolidating packages or using containers for more uniform storage.

If your last-mile fulfillment toolkit includes an on-demand platform like Roadie, make sure your team is ready to work with crowdsourced delivery drivers. Consider these tips for successful order handoffs:

  • Post clear signage to direct drivers to and through your facility.

  • Make sure your loading or pickup area is accessible to passenger vehicles.

  • Educate your team. Ensure your employees are aware that crowdsourced drivers won’t be wearing a uniform, and if they are new to your facility, they may ask employees for assistance.

  • Provide a point of contact and a phone number so drivers can quickly call if they have issues.

3. Get inventory to the right node in your network

Moon explains that as jammed-up supply chains and consumer demand for faster delivery continue to force change in retail, the positioning of products has become key. To remove the need for middle-mile deliveries and relieve asset constraints, retailers have started to detach from traditional distribution routes and instead hold inventory closer to its final destination.

Partnering with an on-demand delivery platform like Roadie lets retailers quickly and easily transfer inventory between holding locations, such as retail stores, warehouses or distribution centers. Doing so gets merchandise where it’s needed, when it’s needed — helping retailers deliver on the promise of ultrafast delivery and even making returns easy with at-home pickup.

As peak season approaches, Moon’s biggest suggestion for retailers is not to wait.

“Avoid the panic call and do it now,” he says. “Some of the biggest challenges we face are around change management from the employees’ standpoint. Reach out to a crowdsourcing partner now, build your operational plan, run some proof of concepts and get things going so you can roll into peak season efficiently.”

Ready to learn more about how crowdsourced delivery and direct from distribution delivery can help you get ahead this peak season? Click here to check out Roadie’s roadmap to peak season success.

Source link

This audio is auto-generated. Please let us know if you have feedback.

It’s been another week with far more retail news than there is time in the day. Below, we break down some things you may have missed during the week and what we’re still thinking about. 

From Guitar Center teaching a ukulele lesson on a plane to holiday hiring ramping up, here’s our closeout for the week.

What you may have missed

Nordstrom Rack keeps growing

September has been a busy month for Nordstrom’s off-price Rack banner. The retailer this week announced that California will get three new Rack stores next year, in Anaheim Hills, Clovis and San Clemente; earlier this month the company said that three will open in the Pacific Northwest (in Union Gap and Olympia, Washington, and Salem, Oregon) next fall, and one will open in Delray Beach, Florida, next spring.

With the addition of the three California locations, Nordstrom will operate 57 Rack stores, 23 full-line stores, five Nordstrom Locals and one Asos | Nordstrom in California, according to a company press release. The move comes despite the struggles at Rack, which is faltering compared to rivals, in a segment that more broadly is unusually challenged these days.

Nike launches a shoe recycling mini program on Alipay

Nike announced on Monday that it partnered with Ant Group’s Green Energy Initiative to launch a program on Alipay to encourage consumers to recycle their shoes.

Chinese consumers can search the mini program “Recycle-A-Shoe” in the Alipay app and have their worn Nike shoes collected for recycling. The shoes will then be dismantled and reprocessed to make sustainable sports courts.

“In China, Nike continues to strive toward its goal of ‘Move to Zero’ and encourages the public to take part in environmental protection. The innovative cooperation with Ant Group allows Nike’s Recycle-A-Shoe program to reach more consumers through digital solutions on the Alipay platform and incorporates Nike’s sustainability efforts into daily life, which is our long-term commitment,” Stanley Chang, vice president of operations and logistics of Nike Greater China, said in a statement.

Home Depot employees file petition to unionize

Home Depot workers in Philadelphia this week filed a petition to form a union, according to a National Labor Relations Board filing. The petition — which includes 274 employees who work in merchandising, specialty and operations — lists the union as “Home Depot Workers United.”

The move comes as more retail employees push to unionize. In April, workers at an Amazon warehouse in Staten Island voted to unionize, and earlier this month, an officer with the NLRB recommended rejecting an objection made by Amazon in opposition to the union. And employees at outdoor retailer REI earlier this year successfully voted to unionize at its stores in Berkeley, California, and New York.

Sixty Home Depot delivery drivers in 2019 voted to join a union, which Teamsters at the time said were the first employees from the home improvement retailer to join the union.

Retail Therapy

Guitar Center partners with Southwest Airlines to create new version of hell on Earth

Giving customers the opposite of peace and quiet, Guitar Center announced on Saturday that it partnered with Southwest Airlines to “surprise” customers with an in-flight ukulele class, per a press release.

Yes, that is correct — Guitar Center and Southwest Airlines brought a nightmare scenario to real life. Customers on a flight from Long Beach to Honolulu last Friday were given Mitchell MU40 Soprano ukuleles, Road Runner carrying cases and a lesson, learning to play the song “Hello, Aloha. How are you?” during the flight, per the release.

To celebrate this joyous event that we all hope was consented to by flight customers, the companies are holding a sweepstakes for a chance to win round trip air travel on Southwest for a winner and a guest, and two ukuleles.

Athleta creates a new look

When Christian Dior debuted The New Look in 1947 it changed fashion history. This week Athleta debuted The Athleta Look, which is in no way similar. 

Person dressed in a crop top, high-waisted leggings, and a quilted, sleeveless long vest. And a hat.

Friend, it’s OK to just say you want to go outside wearing your pajamas and a blanket. 

Courtesy of Athleta


The Gap Inc. brand unveiled a “unique styling formula” with an eight-piece capsule collection that promises to transition throughout the day “without compromising function or style.” The goal is to have a streamlined way of putting an outfit together by layering pieces. 

Getting dressed in The Athleta Look has three parts: 

  1. Starting with a performance layer “for morning yoga flow.” 
  2. Adding to that base with an all-day active product “for those post-workout errands.” 
  3. Adding an outwear layer for a “chic way to keep warm.” 

The capsule collection is a way for shoppers to buy and build a look, and translates into 20 different outfits. Prices range from $54 to $229 and items are in sizes XXS to 3X, as well as petite and tall.

Source link

This audio is auto-generated. Please let us know if you have feedback.

Dive Brief:

  • Nordstrom plans to cut 222 employees at a distribution center in Cedar Rapids, Iowa, according to a WARN notice filed with the state.
  • The layoffs will come next month, on Oct. 18., according to the notice. Nordstrom did not immediately respond to a request for comment. 
  • The distribution center is one of two supply chain facilities that Nordstrom operates in Iowa, which together amounts to 1.5 million square feet of space and are the retailer’s only facilities in the Midwest, according to filings.

Dive Insight:

A Nordstrom spokesperson told Footwear News that the cuts come as Nordstrom shifts some product volume to other facilities. 

Pete Nordstrom, the retailer’s president and chief brand officer, told analysts in August that Nordstrom was working to improve the consistency and predictability of unit flow through its supply chain network as well as increase productivity in its distribution and fulfillment centers. 

The company is also prioritizing accelerating delivery speed and expanding the market-level selection for in-store shopping as well as same-day and next-day pickup, Nordstrom said. Anne Bramman, chief financial officer, also noted on the analyst call that the company has shortened the number of days to deliver to customers from its supply chain.

The supply chain work is part of Nordstrom’s “Closer to You” initiative, an effort to expand next-day order pickup capabilities to more stores and more markets. 

In a note Friday, Cowen analysts pointed out that 40% of Nordstrom’s customers are on the West Coast while many of its distribution centers historically were built in Iowa and Pennsylvania. 

In the note, which followed a conversation with Nordstrom management, the Cowen analysts said that Nordstrom is working to optimize a California facility to integrate fulfillment for its full-line and Rack banners. The retailer is also creating a dedicated Rack team in its supply chain to sort and tag Rack inventory to smooth flow and boost productivity. 

Executives have also referenced optimization work in its supply chain as an offset to increases in labor and fulfillment costs.

The company has made other recent moves to bolster its supply chain. In March, Nordstrom announced the hires of three veterans of the off-price world, including Stacy Lippa, who has worked at Five Below and Target, as its new vice president for supply chain at Nordstrom’s Rack banner. 

While Nordstrom has posted relatively strong numbers for its recent quarter, it lowered its expectations for the year as consumers pull back on discretionary purchases. Inflation has hit the retailer’s Rack customers particularly hard, while its full-line stories put in a solid performance in the second quarter, with sales up more than 14%. 

As it heads into the back half of a volatile year, Nordstrom has reduced its sales plans and marked down inventory to clear out underperforming merchandise.

Source link

This audio is auto-generated. Please let us know if you have feedback.

Dive Brief:

  • Lord & Taylor this week launched a new campaign, “Fall Fete,” and announced “reimagined and reinvigorated” merchandising that encompasses women’s, men’s, children’s and expansions in beauty, travel, accessories and home; a host of brands, including Mos Mosh + V Italia, ICHI, Atelier Reve and Charles Tyrwhitt, exclusive to it in the U.S.; and a new logo.

  • The 200-year-old department store reopened online-only last year under new owner Saadia Group, which had bought its intellectual property for $12 million at a bankruptcy auction the year before.

  • Then-owner Le Tote, an apparel rental site, had acquired Lord & Taylor in 2019 for $75 million from Hudson’s Bay Co. The pandemic stymied its plans, and all remaining physical locations closed permanently a year later.

Dive Insight:

This campaign reflects Saadia Group’s confidence in Lord & Taylor — for decades a department store catering to the middle class well known for its chic dresses — though Creative Director Tim Bitici in an Instagram post cautions, “Don’t call it a comeback.”

The launch includes an overhaul of the fashion retailer’s iconic cursive logo, based on the handwriting of longtime executive Dorothy Shaver. After her arrival in the 1920s, Shaver went on to make her mark on Lord & Taylor’s fashion merchandising and its midcentury store architecture in American suburbs nationwide. Lord & Taylor’s Bitici in a statement describes the new nameplate as employing “a classic, yet modern Helvetica font … juxtaposed … with a transparent ampersand to add that extra edge.”

The wild-party vibe of a video accompanying the campaign suggests a move away from suburbia where many Lord & Taylor locations once anchored malls. It features people of all ages and ethnicities from a variety of locales, including Iowa, South Carolina and Texas, jetting (and even rocketing) off to a fancy gathering.

“Our goal was to digitize the brand and create an elevated online experience,” Bitici said of the campaign overall. “We wanted to create a diverse, multi-generational fall campaign that spoke to everyone, and the fall campaign shot by Max Papendieck does just that.”

Papendieck is an Australian photographer who has shot for Vogue and high-profile brands including Ralph Lauren and Alberta Ferretti.

The online-only reboot comes as consumers have adjusted many of their behaviors, returning to stores to shop after being forced to depend on e-commerce during much of the pandemic and growing more cautious about discretionary purchases amid stubborn inflation, though higher-income consumers are less so, according to recent research from Morning Consult.

Source link

This audio is auto-generated. Please let us know if you have feedback.

Hours after hedge fund Ancora Holdings publicly called for the department store to find replacements for CEO Michelle Gass and Board Chairman Peter Boneparth, Kohl’s said its board “unanimously supports Michelle Gass and her leadership team.” Ancora, which last year was part of a successful push to shake up the retailer’s board, holds a 2.5% stake in Kohl’s.

“We remain committed to maximizing value and acting in the interests of all our shareholders by staying focused on running the business, and the Board continues to actively engage with management to navigate the current retail environment,” according to an emailed statement from Kohl’s.

Ancora is advocating for Thomas Kingsbury, who joined Kohl’s board last year as part of the activist-led overhaul, to take over as either CEO or chair, Axios reported Thursday. Ancora didn’t immediately respond to a request for comment. As a member of the board, Kingsbury himself on Thursday would have endorsed retaining Gass as chief executive.

Pressure on Kohl’s management team has only intensified since they walked away from a takeover bid from Vitamin Shoppe owner Franchise Group in July. Some analysts including those at Credit Suisse said the company moved so slowly that deteriorating macroeconomics allowed Franchise to cut its offer from $60 per share to $53.

Whatever happens next, the department store must somehow stem what UBS analysts predict will be ongoing share losses. From 2011 to 2021, the retailer has lost over a quarter of its market share, mostly to off-price retailers, Amazon and brands, according to UBS researchers.

Source link

This audio is auto-generated. Please let us know if you have feedback.

Dive Brief:

  • Android-based e-commerce app installs dropped 5% (when excluding India, where installs were up 116%) in the first half of the year, compared with the same period in 2021. IOS installs also dropped 4% globally over the same period, according to AppsFlyer’s 2022 State of eCommerce App Marketing report. 
  • Ad spending for user acquisition dropped 50% year over year, amounting to $6.1 billion from July 2021 to July 2022. 
  • Thirty-day app retention on Android devices dropped 13% as users continue to explore new services. iOS app retention dropped 5% overall in the same period.

Dive Insight:

While post-Covid fatigue may be the biggest factor in the drop in e-commerce app installation and usage — both of which surged during the height of social distancing and lockdowns — newer developments, such as the war in Ukraine, supply-chain disruption, rising inflation and fears of a looming economic downturn are also playing a role.

The report found that non-organic installs are slowing down. In 2022, e-commerce is no longer holding the draw it once did. Rising prices, which have taken a toll on marketing budgets and planning in recent months are also contributing to the decline as campaigns encouraging app downloads are stagnating.  

Due to this stagnation, apps are focusing on different tactics to maintain their user bases, such as remarketing and using owned media channels for promotion. Indeed, the use of owned media jumped 360% year over year between July 2021 and July 2022.

As the end of the year approaches, the study notes marketers may also stage pushes around significant upcoming events like Black Friday, Singles’ Day and the World Cup, to encourage installs.

“It will be interesting to see how the 2022 holiday season will play out,” reads the report. “A cooldown after Covid peaks and mounting economic and logistical challenges seem to predict a downward direction. However, consumer behavior and holiday shopping sometimes have a way of their own … There may still be an appetite for a celebratory season, encompassing both Christmas and the World Cup.”

Source link

This audio is auto-generated. Please let us know if you have feedback.

Dive Brief:

  • Making its definitive entry into wedding apparel, Eloquii is introducing a wedding collection for sizes 14 and above, according to an announcement emailed to Retail Dive. The brand is debuting the collection during Bridal Fashion Week in October.
  • The clothing is available in various fabrics, including tulle, satin, lace and sequins. The 50-piece collection features slip dresses, jumpsuits and gowns. The separates, dresses and formal gowns begin at $49, $89 and $299, respectively, according to the announcement. 
  • The first collection is exclusively available on the brand’s website. The company will later release seasonal bridal collections.

Dive Insight:

The decision to debut its bridal collection came after Eloquii conducted focus groups with its customers who expressed interest in wedding styles, the brand said in an email to Retail Dive. It also said it noticed an uptick in wedding-related searches in 2021 and spotted customers posting Eloquii outfits on Instagram. 

“Bridal by Eloquii is for the modern, fashion-loving, sophisticated bride who isn’t being serviced with accessible options in sizes 14-28. We have curated the ultimate wedding wardrobe at an accessible price, with expert fit and elevated silhouettes,” Yesenia Torres, creative director at Eloquii, said in a statement. “The collection features exquisite dresses and looks for every occasion related to the wedding, from the bridal shower and bachelorette party, to the big day. Every look was thoughtfully designed to suit every bride’s taste, including extravagant statement gowns, stunning slip dresses, chic jumpsuits, decadently soft silk ensembles, and voluminous sleeves for timeless looks.”

The launch of Eloquii’s bridal collection follows its previous experimentation with the bridal category two years ago. In February 2020, Eloquii partnered with Ella & Oak to host a tour of bridal pop-in shops in Atlanta, New York City, Washington, D.C. and King of Prussia, Pennsylvania. During pop-ins, shoppers could browse products for engagement parties, bachelorette parties, bridal showers and their wedding day.

The expansion into the bridal category follows Walmart’s acquisition of Eloquii in 2018 for $100 million, placing it alongside other digitally native Walmart brands like Bonobos and ModCloth, though the latter was sold off in 2019. The addition broadened Walmart’s online product assortment.

Eloquii’s launch into bridal also follows Anthropologie’s expansion of its bridal offering in the plus category. Anthropologie’s subsidiary brand, BHLDN, in August 2020 launched an extended-size bridal collection complete with more than 30 bridal gowns and 20 bridesmaid dresses ranging from size 0 to 26W. Alongside its private label dresses, BHLDN also had dresses from designers such as Hayley Paige, Amy Kuschel and Adrianna Papell in the collection.

Source link

Dive Brief:

  • In a pullback from last year, Walmart on Wednesday said that it would hire 40,000 additional associates during the holiday season, according to a company announcement. 
  • The retailer will hire in a number of roles, including seasonal store associates; full-time, permanent truck drivers; and customer care associates. The retailer will offer additional hours to current associates. 
  • In a separate release, Walmart announced new and expanded “no concerns” return options and a holiday guarantee regarding an extended return window.

Dive Insight:

This years hiring plan is nearly a 75% drop from last years hiring of 150,000 seasonal associates.

In 2020, Walmart brought on 20,000 seasonal associates to staff its e-commerce fulfillment centers to fulfill online orders. That year the company hired 500,000 new workers to staff stores and supply chain facilities as consumers altered shopping behaviors during the height of the pandemic.

The announcement comes as inflation is currently changing shopping for a large portion of consumers. Seventy-nine percent of consumers are searching for discounts, while 77% have cut back on shopping, according to a recent survey by Morning Consult, which warned retailers that consumers are pulling back on discretionary spend this holiday to focus on essentials.

Walmart’s approach in order to win the holiday season is to provide deeper savings to shoppers.

The company on Thursday said that it is making “significant price investments in key categories” so shoppers can make purchasing decisions with savings in mind.

“Saving our customers time and money is in our DNA, and I am proud of how we’ve innovated to offer exactly what our customers need this holiday — deeper savings across a broader assortment of gifts with a seamless omnichannel shopping experience,” Tom Ward, executive vice president and chief e-commerce officer of Walmart U.S., said in a statement.

Walmart is also offering a holiday guarantee, which allows customers to shop for gifts early with an expanded return window. Eligible purchases made on or after Oct. 1 can now be returned through Jan. 31.

Additionally, in select stores, Walmart+ members will have the option of having returns picked up from their homes. Members do not need to provide a box or a label, but can hand off the return to a delivery driver. All customers can participate in curbside returns, which allows them to hand over unwanted purchases from their vehicles.

The retailer also stressed that it has “been preparing for months” to ensure that it has products available for the holiday season, and has worked with partners in its supply chain “to ensure a seamless flow of merchandise.” 

The company in recent months has had difficulty unloading apparel inventory, which forced higher markdowns. 

“The increasing levels of food and fuel inflation are affecting how customers spend, and while we’ve made good progress clearing hardline categories, apparel in Walmart U.S. is requiring more markdown dollars,” Walmart CEO Doug McMillon said in a statement regarding the company’s second quarter earnings report.

Source link

This audio is auto-generated. Please let us know if you have feedback.

Dive Brief:

  • Kohl’s needs new leadership, and CEO Michelle Gass and Chairman Peter Boneparth should be replaced, according to a letter to the retailer’s board sent by hedge fund Ancora Holdings Group, which made its demands and reasoning public on Thursday.

  • Ancora and its affiliates, among a group of activist investors that successfully pushed the retailer to shake up its board last year, criticized what it said was Kohl’s failure to properly consider takeover bids earlier this year, a subsequent “opaque strategic review” and a recent credit downgrade, among other issues, per the letter.

  • Kohl’s didn’t immediately respond to a request for comment. Earlier this year, as activist investors pushed for a new strategy including a possible sale, Gass defended the board’sopenness to maximizing value” and its approach as “robust and intentional.”

Dive Insight:

The signers of this letter, Ancora Holdings CEO Frederick DiSanto and Ancora Alternatives President James Chadwick, had high praise for Gass, calling her a “talented leader who deserves credit for establishing an innovative partnership with Sephora USA, Inc. and holding the organization together during the pandemic.”

But that’s apparently no longer enough. They criticized her level of compensation, which they said added up to $60 million between fiscal years 2017 and 2021, with her most recent package worth more than 1,000 times that of Kohl’s median employee’s compensation. 

“We have been proud to invest in a business that maintains strong gender diversity in the c-suite, as it aligns with our recognized focus on installing female leaders in more corporate boardrooms,” they wrote. “However, our view regarding the need for new leadership at Kohl’s is simply based on the facts.”

According to them, those include chronic underperformance and “value destruction,” high turnover of top executives including the chief merchandising officer and an ability to keep up with peers like Macy’s and Dillard’s. Macy’s beat expectations in its most recent quarter and several analysts see Dillard’s consistently outpacing rivals in the mid-tier department store segment.

Some analysts saw Kohl’s as less than enthusiastic about selling itself; takeover talks ended in June after Vitamin Shoppe owner Franchise Group lowered its bid. Earlier this month Kohl’s reportedly received a $2 billion offer for a portion of its real estate.

While Ancora wants both executives gone, the firm is placing much of the blame for Kohl’s situation on Boneparth, who they note has been a director for 15 years. They contend the board he leads is responsible for creating “an environment in which Ms. Gass is no longer well-positioned to lead.”

“Looking ahead, we believe shareholders’ capital should be utilized to compensate a new Chairman and Chief Executive Officer that possess operating expertise and turnaround pedigree,” they said.

Source link