VF Corporation Still Strong

The current CEO of VF Corporation, Eric Wiseman has been instrumental in helping his company stand its ground during the 2008 economic meltdown. VF Corp. sells its well-known brands, such as Lee, Nautica, The North Face, Wrangler, and Vans, through more than 67,000 retailers in about 150 countries. The company owns and operates more than 700 retail stores, including about 60 outlet stores.

Prior to 1998, VF Corp. derived most of its revenues from manufacturing brands such as such as Lee, Rider, and Wrangler, and selling them wholesale to large retail stores. In 1998, VF Corp. aggressively began acquiring well-known active wear and contemporary brands, such as Nautica, The North Face, Eagle Creek, Eastpak, lucy, Vans, and several others. The company rid itself of unprofitable brands. In 2004, VF Corp., which had revenues of $6 billion, launched a bold growth strategy to transform itself into a global lifestyle apparel manufacturer and retailer. "We Fit Your Life" became the mantra for the company's growth strategy.

With Eric Wiseman as CEO, at VF Corp. they have been controlling expenses, investments and lowering inventory and capital expenditures to make up for the revenue decrease of about 5% during the economic recession. In 2008, VF Corp. reported an all-time record for revenue and an all-time record for earnings per share. They delivered $679 million in cash flow, which was above the five-year average and the second highest number in five years. Also, 2008 was the 36th year in a row that they increased our dividend to our shareholders. It is a good part of why VF Brands is a good investment. They ended that year with more cash than they started and they ended the year with less debt than they started with.

In November 2010, VF Corp. began a process of outsourcing their IT services to CSC, a global leader in providing technology-enabled solutions and services, in a seven year outsourcing agreement. Under the agreement, CSC will bring new, innovative approaches to VF’s business use of IT, covering a broad spectrum of services, including service desk, end user support services, network services, distributed computing services and data center management services. Work will be performed utilizing CSC’s worldwide network of delivery centers. The transition from VF’s current information technology services provider to CSC is expected to be completed by the end of August 2011.

http://www.enterpriseleadership.org/blogs/Articles/2010/06/26/vf-corps-ceo-talks-about-forging-a-strategy-to-become-a-global-leader-in-branded-leisure-apparel

Mike Duke -- The World's Largest Retailer.

Mike Duke, the fourth CEO of Walmart, had been handed the reins of the world’s largest retailer. He was outlining his heightened expectation for walmart’s leadership role in the global sustainability effort. Mr. Duke’s decades of experience in the retail industry, his years of executive leadership experience across multiple operating divisions of our company, his international retail experience, and his expertise in corporate strategy, development and execution, all of these made him an Influential leader in retail industry.

Also, under his operation, walmart is changing the structure. Wal-Mart is combining divisions and creating three distinct geographic business territories in the United States.The changes will make the company more efficient and accelerate growth, according to Eduardo Castro-Wright, Wal-Mart vice chairman. The restructuring includes aligning Puerto Rico stores with Walmart US; dividing Walmart US into three business units, Walmart West, Walmart North and Walmart South; creating e-commerce through a global.com organization; and combining logistics, real estate and store operations under the same leadership. Wal-Mart eliminated “a relatively small number” of field merchandising positions spread across the country, said Dave Tovar, Wal-Mart spokesman. He declined to provide a number of jobs lost, but said former associates would be paid until April 9, could apply for other Wal-Mart jobs and would get help finding other jobs.

LVMH

LV, Fendi, Givenchy, Dior and Hennessy etc. Everyone has heard at least some of those luxury brands, and we all know how expensive they are. However, you may not know that all those luxury brands are all managed by one company, LVMH. LVMH is the biggest luxury products group. It was founded in 1987 as a result of merger between Louis Vultton and Hennessy, which is also why those two brands are still on the front page of its website today, even LVMH has decades of other luxury brands now. In October 2010, LVMH bought 14.2% of Hermes, it said that it is not seeking control o

f it, but LVMH’s leading position in luxury retail industry seems unshakable now.

Like the blog I wrote before, luxury brands like LVMH seems has not been affected by the economic decline in the past few years. Actually, all the data show that it has a very strong sales growth. Compares to the other retail stores that are been struggled by the decline, LVMH is very unique. However, it has its reasons. Luxury brands have a very large market that has not been opened up yet. Rich people in countries like China, Brazil are still seeking for goods that can help them look as rich as they are. According to the article “LVMH’s Net Income for Year Soars 73%” from New York Times, the net income of LVNH 2010 surged 73 percent to $4.1 billion. The article also states that “Demand from the newly affluent, especially in Asia, is driving much of the rebound in the luxury industry after overall sales slumped around 8 percent in 2009.”

LVMH is now the model of retail industry, especially when people are still wondering if the economic crisis has gone at this point. Consumers still have confident on luxury brands like LVMH, while the investors should look at this more seriously.

Todays Interview with Vineyard Vines of Georgetown

Today I had an interview with a friend of mine who is a sales associate at Vineyard Vines which is located in Georgetown. Vineyard Vines is a retail clothing store which was started by two men, Shep and Ian Murry, in Martha's Vineyard, Massachusetts. They now sell all sorts of summer'y' clothing and have an extensive line of ties for men.

I interviewed someone named Marty Jennings who lives in Bethesda, Maryland and commutes to Georgetown when he is not attending school at University of Maryland. I began the interview by asking him a few questions about Vineyard Vines, specifically there demographics of Vineyard Vines. He told me that Vineyard Vines targets the upper-middle class people who loves the beach and spending time at the country club. I then asked him about specific work of employees of Vineyard Vines and he told me there are two main positions. Sales associates who are responsible for sales, and general cleanliness of the store, and stock room employees who are responsible for keeping the store stocked up and making sure nothing is missing and everything is displayed well. I then went onto

to ask him about

The last few questions I asked him I found particularly interesting. The first one was, "What do the management look for when hiring new employees?" He responded by telling me they look for a specific appearance style in their employees as well as looking for personality traits. My final question to him was what is the difference between stores like Vineyard Vines, Ralph Lauren, and Brooks Brothers? He told me they all attract different people with different needs. Vineyard Vines attracts the fun loving people who don't want much out of their clothes where as places like Ralph Lauren and Brooks Brothers attract people who come for luxury clothes, personal alterations, and sales people who know all of their likes and needs.

Amazon: The Virtual Superstore

What doesn’t Amazon.com sell? Even though it started off with simply books, now you can get things ranging from music to shoes to clothing. Amazon did not start with all this merchandise, it has acquired all these industries over time with pricey and sometimes risky acquisitions.

Amazon’s first big purchase was Exchange.com in 1999 (Pepitone). This purchase intended to open up the Amazon marketplace to 3rd party sellers. This pivotal move encouraged buyers and sellers alike to partake in Amazon’s deals. Amazon’s acquisition of Exchange.com made Amazon’s marketplace what is it today, and it continues to be extremely successful. Stock for Amazon closed at $103.59 the day of the deal and closed that Friday at $186.50 (Pepitone). Amazon’s incorporation of exchange.com essentially dismantled the site and relaunched it as part of Amazon

Another purchase Amazon made was to branch into the music industry too. Amazon bought AmieStreet.com, which was a webpage that music artists could post songs and AmieStreet would post the prices according to popularity, with more popular songs there was a higher cost. Amazon bought AmieStreet in 2010 and then shut down the site and “redirected it to Amazon” (Pepitone).

Lastly, Amazon’s most expensive acquisition was the purchase of Zappos.com, which is sort of comparable to a shoes retail version of Amazon. Amazon saw competition from Zappos, which is a popular online retailer. Amazon had to ask Zappos twice before they accepted the offer. Unlike with exchange.com an AmieStreet, Zappos has not integrated into the Amazon superstore. Their website remains, and customers do not find the exact same shoes on both sites.

Amazon finds new ways to distribute a product, which leads to it’s continuous success. They have smart and decisive business moves, which result in more profit and products. With a constantly rising stock, Amazon is a good investment with smart business plans.

Julianne Pepitone (Feb. 22, 2011). “Why I sold to Amazon: 3 startup stories.” http://money.cnn.com/2011/02/21/smallbusiness/amazon_acquisitions/index.htm

IKEA - the retail innovato

IKEA’S success as an innovator is undeniable. The company was the first to make beautifully designed home furnishings widely available at low prices; and they created an iconic global brand in the process. IKEA products have become synonymous with value, design, and accessibility. Take IKEA for an example; there are several aspects that such retailers can innovate. First of all, the location of the store is changeable. Crowded downtown is always the choice for retailers to locate their store, however, differently, IKEA locating their stores in suburb area. This makes the store more room available to serve people. Second of all, consumers’ preference is also important. IKEA’s products are especially designed for young people who are under 35 years old. Those products are cheap and always meet the taste of young. Additional, promotion activities are also an opportunity for innovation. IKEA’s promotion activities are very creative and as a result, every IKEA store will attract a lot people because the promotion.

IKEA is an innovator in retail industry. Retailers should take IKEA as an example and learn the IKEA strategy to make a progress.

Shopping and technology: new BFFs

In the past few decades technology has advanced in unprecedented ways. It has enabled us to do things in faster more efficient ways; these technological advances have influenced even the way we shop. As a college student now I do not have the amount of free time I used to have when I was younger and therefore cannot afford to spend inordinate amounts of time going shopping as I did before, so thankfully enter online shopping. This miraculous invention was pioneered in 1994 by Intershop a German company; after that in 1995 Amazon began and in 1996 eBay started its operations.

Today, almost twenty years later, new technology has once again revolutionized shopping. Smart phones have provided a new frontier in online shopping.

An article published in Forbes Magazine is related to this topic, they write that with the growth of mobile networks, stores will have the capability to help customers have a different retail experience. Among the software that is in development, is software that would allow shoppers to check the Internet for online promotions, product descriptions, and even “try on” clothing. New mobile capability, social networks and better analytics will play an important role in the future of the retail industry, according to speakers on a recent Wharton retail conference titled, "E-Commerce: Is It the Future of Retail?" "Mobile will be a critical piece of retailing, even more so than shopping online," said Dave Larkins, vice president of NetPlus Marketing in Conshohocken, Pa., and a co-creator of online boutique The Colony.

One of the leaders in the development of e-commerce is Amazon.com, which started out as an online bookseller but has now broadened its scope to every major retail category. Amazon, a store with no brick-and-mortar locations, continues to dominate the online shopping marked.

There are still a few issues to work out in order to make online shopping as dominant as a physical shopping experience. Among those things is that online stores are unable to provide the instant gratification that buying something in a store and taking it home provides, the wait time and shipping charges are a couple of things that sometimes makes shoppers bail on purchasing. A potential game-changes in the industry would be for retailers to have the ability to get an order to a shopper’s home in a matter of hours, not days or weeks.

Who knows how shopping will be different in the future?

Retail Industry like Borders

All industries face competitions all the time. For retail industries, most common skill might be discount to get more consumers to buy form its own company. Might because retail industries seem like have less opportunities for innovation compare with many other industries. After all, most time retail sales depend on the products themselves. So if the products are out of time, the retail skills can help in very limit ways. so in this day and age, people prefer iPad or Kindle more and more, it seems less surprise that Borders, used to be the biggest book retail company, got bankruptcy. According to the article “How Much Do You Read These Days” by Rachel Emma Silverman on Wall Street Journal on 17^th Feb, is was caused by a number of factors, which includes “the rise of electronic books, the dominance of internet retailing and the poor economy”; nevertheless, it is very much because of the innovation of electronic reading tools such as iPad and Kindle.

After all, what kind of innovations can book stores make to resolve the crisis of reading? From my point of view, I think paper books are more and more like collections for people to stow rather than reading for knowing something now. Retail stores l

ike Borders may need to change their way to sell. They are now not only

competing with the other book retail stores but also mainly with the electronic books. There is no question that electronic books are cheaper and more convenient than paper books. So if retail books stores want to survive, they need to sell books not as books, but as gifts or collections.

Tommy Hilfiger in East Hampton, NY

Designers and brands such as Ralph Lauren, Lilly Pulitzer, Brooks Brothers, and Tommy Hilfiger all produce similar style clothing and are shifting towards the "ivy-style, classic prep, and nautical" looks for the 2011 spring and summer seasons. This look is very well described as the 1960's "Ivy-Leagure" style which would be found in America's most elite schools such as Harvard, Yale, and Princeton. Male students there would not hesitate to wear to a pair of embroidered pants with a herringbone, or tweed sport coat, or in the warmer months, a madras blazer with faded red, also known as Nantucket Red pants or shorts. Since the 1960s this look has faded away to the younger people but a few big time designers are fighting to bring it back.

Tommy Hilfiger has been working to bring back to ivy-style and the nautical-style of the 1960s. He

has been so successful that he has opened his tenth store in Americ

a, located in East Hampton, NY. As Hilfiger himself said about opening his new store, "East Hampton dressing is about Americana; it's fun yet sophisticated. Our new store embodies the brand's philosophy of democratic dressing, offering a full range of men's and women's collections and accessories." Hifiger will be offering a line called Hamptons Bohemia exclusively at this new location. The collection is nautical inspired and offers cricket sweaters and lobster embroidered shorts. Men's and women's lines will include a mix of U.S. and European sportswear, with men's also having tailored pieces, and for women the runway collection and swimwear.

His East Hampton store is only 1,850 square feet, but is decorated to give the shopper the nautical feel as they walk inside of the store. According to an e-mail interview, the interior is described as "traditional-meets-modern" with walls accented in leather and walnut paneling decorated with antique brass fixtures. Persian rugs are overlaid on a herringbone oak floor, while aged leather and linen seating offer a stylish place to sit while waiting for a shopping companion to emerge from the dressing rooms.

Hilfiger finishes his email interview by saying:

"The Hamptons reflects Americana in its classic yet

fun style, which is the inspiration for my designs and brand philosophy. We designed the store to blend seamlessly with its landscape, from the colors to the product mix. We feel that this is the right location at the right time, and I'm thrilled we now have a location that caters to both the local customer and tourist in the Hamptons."

Nordstrom's Latest Acquisition

Nordstrom, a popular high-end department store bought retail and flash sale website HauteLook Inc. for a reported $270 million dollars. This type of acquisition is helpful to Nordstrom because it will help it have more of a presence on the web and also continue to reach out to it's clientele in new ways.

The question on everyone's mind now is "What is a flash sale sight? How will it help Nordstrom?" Answer: A flash sale site is a website that holds 24 hour (give or take) sales on luxury clothing items, furniture and sometimes even vacations or cruises. These website are often exclusive with a members only policy. Nordstrom hopes to make HauteLook as profitable and extensive as other flash sale sites such as RueLaLa and Gilt (WSJ.com). The flash sale sights came about during the recession, when luxury clothes were no longer a popular item and inventories need to shrink. They have been popular since then, but recently full priced luxury items have been bought more constantly since the recession.

The flash sale sites seem to making an impact on Nordstrom already, and it is predicted to be paying $180 or $90 million dollars in stock based on previous estimates. Nordstrom does not want to integrate the company and label it a 'Nordstrom company' because Nordstrom already has a substantial web page for their department store and does not need the confusion of having another luxury discount company that might get shoppers confused with the discount-Nordstrom Rack stores.

This acquisition will ultimately help Nordstrom if the country continues to stay in a state of mind where discounted clothes are wanted, but if the economy continues to grow, the sites will probably not make as much as anticipated. The exclusivity of the site will continue to motivate members to buy from HauteLook, but it might just be a one trick pony for the short term until the economy reaches a point where luxury clothes can be purchased at full price.


(http://online.wsj.com/article/SB10001424052748703561604576150770985132088.html?mod=WSJ_Retailing_leftHeadlines)

Bring in the Girls

Lately the economy has seen a surge, and many seem to think it is in a state of recovery. As a response to this, retailers have started using different strategies to try and bring in more customers. For example Home Depot, which is usually affiliated with men shoppers have tried to appeal to the female demographic by changing the layout of their stores or adding new products. Home Depot has added a line of Martha Stewart Living merchandize in hopes that this move will attract women who are renovating a part of their home.

In this market stores need to find a way to cater to as many clients as possible but that sometimes means changing the way people look at your store. For example, home improvement stores get a bad reputation for only catering to men and women sometimes feel unwelcome. "Sometimes they seem to feel like you're just a girl, you don't know what you're doing, you need to get your husband in here," said Ms. Butler, 25, who lives in Loxley, Ala. "It's intimidating for any female to walk into a home improvement store."

Without a housing recovery to revive sales of big items or major renovation supplies, home improvement stores are promoting smaller projects for spring, home improvement stores' major selling season. And that means sprucing up departments to get women shoppers excited about window treatments or new colors for makeovers of existing spaces.

Experts say that since the economy is still in a state of recovery people are still not comfortable buying houses because their income is not stable so companies like Home Depot and Lowes are trying to bring in people who are renovating. Changes in layout like wider aisles, warmer colors, less metal displays, mood lighting, more wood tones and comfort zones areas where customers could review paint samples or plan for remodeling are small changes that can make female customers feel more welcome.

Sources: http://www.nytimes.com/2011/01/29/business/29home.html?_r=1&ref=homedepotinc

Carrefour-The world wide hypermarket

Carrefour, a French international hypermarket chain, is the largest hypermarket chain in the world today in terms of size, the second largest retail group in the world in terms of revenue and the third largest in profit after Wal-Mart and Tesco. From 1957 to today, Carrefour expanded to thousands stores from only one at the suburban area in France. The revenue of the company has sharply increased. In 2005, Carrefour Group announced 90 billion dollars revenue and was ranked No. 22 among global 500 companies in the "Fortune Magazine". Nowadays it is more and more competitive between the world retail companies, how does Carrefour achieve such excellent results?

First, sell on a large scale is very helpful for increasing the revenue. Carrefour group covers not only food, but also general merchandise, even cloth. Various kinds of goods are a huge attraction to consumers. Second, expanding geographic reach is also the reason for the increasing revenue. By now, Carrefour has stores in 30 different regions. This makes Carrefour withstand regional economic fluctuations. Also, low price is always the key to Carrefour's success. Carrefour has been working through various channels to control and reduce costs. Carrefour has signed the contract with suppliers that they will settle the account every 60days. They use the suppliers' funds to circulate goods. As a result, Carrefour's will spend less current funds itself. Thus save the capital costs of Carrefour Group. That's why that Carrefour has low price to attract public: because the company has fewer costs.

Carrefour Group's excellent achievement is an example of how successful retail companies make money. In the competitive retail industry, any company that wants to make money should be able to take a panoramic view of the situation.

Luxury

Many stats showed that the economy is recovering, or at least, the consumers believe it is. Not only the normal sales markets are getting doing better than before, the consumers are also willing to spend on luxuries. LVMH said “profit rose 73% to €3.03 billion on revenue of €20.3 billion last year” (Wall Street Journal). This news also claims that those luxury brands have opened many new markets like China, India which have offset weakness in traditional markets like US and Europe. Those areas’ sales “rose 12% and 14% respectively” (Wall Street Journal).

All those luxury products are inelastic supply, which made them easier to get recover from the economic crisis because there are few products can replace them, and their buyers are tend to have higher incomes which will been less influenced by the economics crisis. Those luxury costs, however, are very low compare to their sale price. Also, because of its inelastic demand, those products are tend to keep their prices even during the crisis time. However, the situation will be different for those products with elastic demand.

For those luxury brands, the expanding geographic reaching definitely helps its growing profit. Since luxury products are not necessaries for people, only the new markets will help them to gain more profit quickly, especially during the recovering of the economic crisis.

The consumers’ confidence is a very important factor of the retail market. However, if the economic is not at the recovering position at this point, the consumers will realize by time. Then the retail sales will go down again. So the most important question is, if the economy is really doing welling now? Are we at the recovering point or we just believe we are? The employment rate of US falls to 9% recently, which is a good thing, but there seems still do not have enough evidence to believe that this is the recovering point. Only stats in the long term will tell if this recovering is real or not.

Shoppers Spend and Save in January

Many stores reported an increase in sales in the month of January. The sales were up 4.2% from December (LA Times), which is a large number considering the typical post-holiday spending slump. Even though the US shoppers are still in a bargain-hunting mood, the fact that so many popular retail stores were having sales was enough to lure the shoppers into buying things. Multiple retail companies reported that the number of transactions was higher than the same time of last year (Daily Finance).

Big name franchises like Victoria Secret had a 35% increase in profits, which experts say is because of their decision to move the semi annual sale from late December to early January. Limited Brands, also owned by Victoria's Secret saw an increase in stock as a result to the increase in profits from $1.02 per share to somewhere between $1.23 and $1.25 per share. Department store JC Penny also had an increase in sales and stock prices, with their stock price rising from $1 to $1.09 (Daily Finance).

The interesting part of this story remains, how was there this much of an increase in profits, when many customers were in the middle of snowstorms? Well, the chief economist for the International Council of Shopping Centers, Michael Niemira, “Retailers weathered the storm, both literally and figuratively. It is a signal that underlying consumer demand is pretty solid” (Phoenix Business Journal). Even though large snow storms took fall over the East Coast, it not seem to phase shoppers too much. In fact, the snow storm may have forced buyers to get snow-related clothing items such as coats, scarves and boots. The snow also may have boosted the need for durable goods such as food. Costco Wholesale's sales went up 9% (LA Times), which is no doubt the need to buy foods in bulk in case of impending snowstorms.

The upcoming issues for the retail industry will be in the teen apparel department of the industry and the rising price of cotton. Teen apparel was the one area with the largest decline in sales, at 2% (LA Times). Because of this several popular teen brands such as Abercrombie & Fitch, American Eagle and Aeropostale decided to stop reporting monthly sales revenue. Their belief is that by not reporting monthly, the fluctuation of their stock will stabilize.

The price of cotton is up since 2010, and labels like GAP inc and JC Penny know that they will most likely be paying their workers in China 20% more for their products (LA Times). Other analysts caution that people will be paying more cotton goods such as sheets, socks and shirts (LA times).

Only time will tell if this recent sales increase will continue or decline as we march further into 2011.

Souces:

http://www.latimes.com/business/la-fi-retail-sales-20110204,0,160889.story

http://www.bizjournals.com/phoenix/news/2011/02/03/shoppers-not-yet-spent-retail-sales.html

http://www.dailyfinance.com/story/company-news/january-retail-sales-record-snows-couldnt-stop-sale-shoppers/19827384/