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 H&M’s tieup with Mugler to Bath & Body Works’ store strategy, here’s our closeout for the week.
What you may have missed
Mugler fashion house set to launch collab spring collection with H&M
This spring, H&M and Mugler will debut a collection, available online and at select H&M stores. According to the press release, the collection will be created under the French fashion brand’s creative director, Casey Cadwallader. H&M has collaborated with designer brands and fashion houses in the past including Karl Lagerfeld, Versace, Simone Rocha and Comme des Garcons.
“For nearly two decades, H&M has been democratizing high-fashion by offering global audiences the chance to own special pieces of high-end designer history,” the clothing company wrote in a press release.
Mugler has been at the forefront of fashion news in recent years with looks such as Kim Kardashian’s 2019 Met Gala dress, Dua Lipa’s concert attire for her Future Nostalgia tour and Grammy looks this year for Madonna and SZA.
Dillard’s delays a South Dakota store again after a tepid holiday quarter
Dillard’s is once again postponing a store opening planned for South Dakota, announcing in a press release this week that the Empire Mall location will now open some time next year. The anchor was first announced in 2018, and after a few delays the department store in August had reiterated its commitment to opening it in 2023.
The latest holdup of what was supposed to be its 30th store came as the retailer reported flat Q4 comps and a slight decline in retail sales to $2.1 billion (excluding its construction business). Its retail gross margin of 38.7% was its second-best Q4 performance ever, however, despite the fact that “weaker sales at the beginning of the quarter and during the holiday season led to increased markdowns and stronger January sales compared to the prior year fourth quarter.”
The company, which has entered its 85th year, is generally a standout in the department store sector, but isn’t immune to its weakness. Dillard’s cash balance remains strong, Zachary Warring, equity analyst at CFRA Research, noted in emailed comments, but warned of “lower sales and margins in FY 24 as consumer savings dwindles.”
REI rolls out new product standards for suppliers
REI this week introduced the third evolution of its Product Impact Standards, which seek to address social and environmental concerns within its network of more than 1,000 brand partners. The standards were first introduced in 2018 and updated in 2020. The third iteration includes “elevated expectations” around greenhouse gas emissions that require REI’s brand partners to measure emissions and set reduction targets. REI noted it is working with brand partners that make up at least 55% of its annual sales volume to set science-based emissions reduction targets by 2025.
The co-op also updated its chemicals management expectations to better align with new legislation on the use of PFAS and introduced new expectations around how its brand partners advance equity. In particular, REI rolled out new expectations around price equity across size ranges, inclusive sizing and inclusive offerings for diverse hair types. However, the outdoor retailer notes that its standards include both requirements and voluntary certifications or attributes.
“The standards keep the co-op and over 1,000 of our brand partners accountable as we address the issues that are most important to our community,” Chris Speyer, vice president of product at REI, said in a statement. “The products we carry represent our greatest opportunities to support better ways of doing business. We want our members and customers to know the products they purchase at REI are helping to build a better retail industry.”
Skechers partners with Diane von Furstenberg
Skechers this week announced a footwear and apparel collaboration with fashion designer Diane von Furstenberg, dubbed Skechers x DVF.
The partnership will launch with the Endless Kisses capsule, which highlights the designers’ famous lips print and includes fashion sneakers, running footwear and a sandal as well as a T-shirt, leggings, shorts and a racerback bra. The collection is available at select Skechers stores and its website. Additional products featuring popular DVF prints will debut this spring.
“As a woman on the go and a passionate hiker, I’m excited to launch our collaboration with Skechers, a leader in comfort innovation,” Diane von Furstenberg said in a statement. “This empowering offering is designed for those who push boundaries, challenge the norms and inspire others.”
Can I hand you some Goldfish?
Have you ever wanted a professional NBA player to hand you a Goldfish snack? Well now that’s possible. The snack brand has released a hand shaped serving dish that is the same size as Boban Marjanović (10.75 inches).
The dish holds precisely 301 Goldfish crackers, and it will be released for a limited time through a giveaway drop on March 1, according to a company press release.
“Goldfish fans snack by the handful, and Boban’s handful has officially set the bar,” Janda Lukin, chief marketing officer of Campbell Snacks, said in a statement. “Those who want to snack like a pro will now get the chance to go for the Boban-sized handful.”
What we’re still thinking about
That’s how many active customers Wayfair lost in the fourth quarter compared to the same period last year. The 19% drop in active customers came as the online home goods reported net revenue during the quarter fell 4.6% year over year to $3.1 billion. For the full year, its revenue fell 11% to $12.2 billion and its net loss swelled to $1.3 billion.
Wayfair’s shrinking customer base also comes despite spending more on advertising. During the fourth quarter, the company’s advertising expenses grew 18% to $406 million.
That’s how much Target plans to invest to expand its next-day delivery capabilities. Through the investment, the mass merchant will open more than six new sorting centers, expanding its sortation network from nine to more than 15 facilities by the end of 2026.
This year, the retailer expects to deliver around 50 million packages from its sortation centers, double the amount it delivered last year. Target has seen a 150% increase in the number of next-day delivery orders since opening its first facility in 2020.
What we’re watching
Bath & Body Works to shrink its mall presence
Bath & Body Works on Thursday said it plans to close about 50 mall-based stores as part of its growth strategy. The personal care retailer also permanently closed 50 stores last year. Most of those locations were mall-based. As of this month, Bath & Body Works had 1,800 company-operated locations in the U.S. and Canada, more than 425 international franchised locations and an online store.
Going forward, the retailer anticipates 115 real estate-related projects in 2023. They will include 90 new off-mall stores and the remodeling of 25 White Barn candle store locations. White Barn is a sibling company to Bath & Body Works. The net outcome of these real estate initiatives, according to the company, is a 4% growth in the company’s overall square footage.
The real estate changes are part of $300 million to $350 million in capital expenditures expected this year. Bath & Body Works reported Q4 net sales fell 4.6% to $2.9 billion, while full-year net sales decreased 4% to $7.6 billion.