No Turn On Red

Today’s Washington Post has a very detailed, in-depth look into teen shopping habits that, I’m guessing, is going to make the rounds at corporate offices of mall retailers today:

Sixty-one teenagers from across the Washington region descended upon Tysons Corner on a recent Saturday. And we were there to capture it all.

We wanted to learn how today’s teens make their purchasing decisions, how they calculate value and how they figure out what’s cool. These teenage volunteers, all between seventh and 11th grade, brought their own money, friends and sense of style. Some came with their parents; some with their parents’ credit card. But all of them brought strong opinions about what they like — and what they don’t.

More than a dozen Washington Post and washingtonpost.com staff members documented the shopping expedition through stories, photographs, audio and video. We gained insight into teen consumer psychology and the latest trends, but we also learned a lot about the teenagers themselves.

With 10 associated articles, photos, video, and an interactive map detailing how many people visited different stores and how much money was spent, this is a rather fascinating read. Detailed, detailed, detailed. Only click on this link if you have time to kill, because it will suck you in with the amount of information available: Tracking Teen Shopping Habits.

I’m not going to be able to sumarize everything that the Washington Post has in that article, but there are a few points that jumped out at me that I’d like to share:

Collectively, the teens spent the most money at Hollister ($498) with Urban Outfitters a distant second ($319). $288 was spent at American Eagle while $198 was spent at Abercrombie & Fitch. Old Navy ranked up there, with over $160 being spent by these teenagers. Non-existant in this group was PacSun, with 10 visits and no money being spent.

These teenagers are smart. One article centers around their price conciousness (When Mom’s Not Paying, Cost Is a Deal-Breaker) and one article is about their shopping strategies (On a Mission to Buy, With a Plan of Attack). These teenagers came equipped with plans, checking out fashion and getting information from the retailer’s websites prior to stepping foot in the mail.

Where’d denim go? These kids aren’t shopping for jeans, apparently.

Teenagers aren’t just shopping at specialty retailers. This group is also looking at Macy’s, Nordstrom, Bloomingdale’s, and Lord and Taylor to find the best deals.

The work put in to this report from the Washington Post is incredible. Like I’ve already said, this is a really fantastic read with a ton of information.

Related posts

• Best Buy on customer insight and cross-channel analysis (0)
• Retailers put ads where the teens are (0)
• Retail roundup - Q1 results, Target (0)
• Retail gripe #1; or please don’t make me the bad guy (2)
• Target: BTC Super Freaky (0)

A (new) weekly rundown of some of the blog posts and other items that I’ve found interesting this week, but didn’t get a chance to share:

Retail Design Diva writes about the new Lord & Taylor Summer window displays (see: Making Waves on Fifth Avenue). With photography from the new Georgia Aquarium, it sounds like a very extravagant window display. I’d love to see it, but with it only being around until 5/4, I don’t know If I will get up there to see it firsthand. Photos, anyone?

Home Depot Canada will continue self-checkout rollout says Home Channel News. Wish more self-service checkouts were in the American stores. Nothing like going to Home Depot on a sunday afternoon and there only being two cashiers. At least self service checkouts would speed things up, somewhat.

Finn over at Lightheavyweight wrote the very simply titled KISS a few weeks back. Didn’t get a chance to share it then, but I’d recommend reading it. A reminder than simple, sometimes is better.

And I have to do some self promotion, again. As a reminder, this week I launched Big Box Watch, which is a web application plotting new retail construction using a Google Map interface. There’s also a blog there, and this week I talked about the expansion of JCPenney and their foray into Manhattan and I also posted some news about Best Buy’s store openings in the next three months.

Related posts

• No related posts.

Couple of notes for this week:

As Nintendo gets ready to launch their new console, Wii, in November, Engadget has a first look at some of the retail information for the unit, including CompUSA’s cost v. price information and photos of the new endcap displays in production for Target (see: Wii retail details: markup and endcaps).

Retailwire (subscription required) carried a story and discussion about Lord and Taylor last week (see: New Owner Buys, Looks to Build Lord & Taylor). With the sale of Lord & Taylor fully complete now, NRDC Equity Partners has started announcing some of their plans for the chain. They’ve announced that they will be downsizing the Fifth Avenue flagship store and closing their Water Tower Place store in Chicago. However, they say they are commited to growing the brand and looking for opportunity to expand, including looking into more freestanding, lifestyle center options.

Finally, one more video game note: I love reading blogs with an interesting perspective on retail, and A Day In The Life Of Video Games is no different. This is a blog written by employees of a video game store, sharing their experiences with customers and customer service. Very funny insight into this segment of retail.

Related posts

• No related posts.

This week we saw record heat on the East Coast and a mixed bag of retail results for July. Some retailers are already enjoying the BTS season while some mall retailers can’t catch a break.

Are Wal-Mart employees in for a shock tomorrow? Rumors are that various levels of management, including store, district, and regionals, were tied up in meetings last week discussing new HR policies. Details are few, due to strict measures meant to clog up leaks, but one of the rumors is that Wal-Mart will be announcing new policies regarding the maximum pay employees can make within various pay scales. Is a possible severage package for long term employees also in the works? Rumors are rampant, but expect more to be known tomorrow.

The Lord & Taylor sale has been approved by the Federal Trade Commission. With that, Macy’s has re-opened the former Lord & Taylor in Center City Phildelphia as a new flagship store. The Philadelphia Daily News offers some insight into ways that Macy’s, and other retailers, can look towards the future of retail and customer satisfaction (see: Macy’s: Want to Know The Real Way to Shop?).

In case you blinked, as of the end of July, Hollister now has 355 stores nationally, compared to the 351 that Abercrombie & Fitch has. The younger brother now has more stores than the (much) older sibling.

Finn over at Lightheavyweight took a good look at Gap and some other retailers this week (see: Retail Sightings, July 30, 2006). He comes from a design background, similar to me, and approaches the retail industry looking for good design and ways to increase customer satisfaction. I really enjoyed this post and look for more like it in the future.

In local (to me) retail news, there’s something interesting brewing along Route 36 at the site of a former Bradlees and Food Town, in Hazlet, NJ, that has been vacant since the early part of this century. It appears that the local planning board has heard an application from Stop & Shop Supermarkets to rennovate the building. For years, Wal-Mart has been rumored to be interested in the property, but due to enviromental concerns, the property is not large enough for what they require.

This application is interesting for a few reasons - one, because Stop & Shop owned the Bradlees chain at one point, so they are reaquiring property they divested 15 years ago. Second, Stop & Shop already has a location less than a mile away from this property. I’m interested to know what they plan on doing with this vacant parcel and the existing store. Could they really be moving locations, down the highway?

Also locally, PetSmart is building their sixth location in this part of the Jersey Shore, due to open next year.

This week will see the start of Q2 earnings results, with the balance of the results due in after next weekend. We’ll see how the BTS season is shaping up for retailers across the country and start to get some indications where retailers are planning on going as we head into the Fall.

Related posts

• No related posts.

This morning’s New York Times has a great article about the sale of Lord & Taylor that discusses the history of the brand as well as what led up to the sale and where they go from here. With so many retail companes consolidating and brands disappearing, sometimes it can be forgotten that companies like Lord & Taylor have a history that span many generations. The article is here: Lord & Taylor to Remain on Fifth Ave.

From the article:

Richard A. Baker, who led a team of real estate and private equity investors who announced they would buy the 48-store Lord & Taylor chain for $1.2 billion in cash, said the Fifth Avenue store could be reduced in size, but that was preferable to bulldozing it or reselling it — even for an estimated $300 million to $400 million.

“I am not sure we want to operate Lord & Taylor without a Fifth Avenue location,” Mr. Baker, president of NRDC Equity Partners, said in an interview at his Manhattan office atop the Shops at Columbus Circle at the Time Warner Center, which represents the newest chapter in the city’s retail history.

Still, real estate, rather than just the power of a brand name, is at the center of the deal. Lord & Taylor, once a pre-eminent department store that supplied couture to New York’s white-glove set, lost much of its prestige over the last 25 years as it tried to appeal to a broader range of consumers.

There are a lot of questions after this deal: Where does the company go from here? Can they compete in a ever-shrinking industry? Will they use their smaller stature to their advantage? But at least they’ve answered one by making (somewhat of) a commitment to their Fifth Avenue location.

Related posts

• No related posts.

The deal is done, Federated has sold Lord & Taylor for $1.2b. Coverage from the New York Times, Forbes, Forbes (again) and Commercial Property News.

The details, from Forbes:

Federated Department Stores Inc. announced a deal Thursday to sell its Lord & Taylor department store chain for about $1.2 billion in cash to Purchase, N.Y.-based NRDC Equity Partners LLC, which will be putting its business under a microscope. NRDC is a partnership between principals of Apollo Real Estate Advisors L.P. and principals of National Realty & Development Corp.

Federated said its board has approved the sale, and the deal is expected to close in the third quarter, pending regulatory approvals.

The $1.195 billion deal includes 48 Lord & Taylor stores, including the Fifth Avenue flagship in Manhattan, as well as a distribution center in Wilkes-Barre, Pa. Aside from New York, other locations, predominantly in the Northeast, are in New Jersey, Illinois, Massachusetts, Connecticut, Maryland, Virginia, Michigan, Pennsylvania and District of Columbia.

Speculation is that Federated was not looking for someone who was just looking for the real estate. But instead looking for someone who would operate the chain for some time before divesting property. Federated did not want key properties going to competitors in the short-term. Rumor has it that one of the prospective bidders was Vornado Realty Trust, who quietly sank due to their lack of partnership with a retail management company.

Again, from Forbes:

It will be business as usual,” said Richard Baker, president of NRDC, reached by phone, noting its intention to keep Lord & Taylor as an ongoing specialty department store. “We are going to do a lot of high-level and granular analysis in order to determine the most efficient way to operate each store.”

Baker declined to give details, but said that NRDC is studying all of its options, including size and locations of each store. NRDC, for example, will be figuring out whether it makes sense to have a slimmer flagship in Manhattan. The flagship is about 600,000 square feet, but could be slashed in half, Baker said.

It doesn’t take much to see that a good part of the game plan involves maximizing profits through dumping property. However, realize that although NRDC has a realty background, the principals behind NRDC are currently spearheading the turnaround of Linens ‘N Things, after being outbid in their attempts to aquire both Toys R Us and Pathmark.

Commercial Property News says:

Richard Baker’s previous comments on the Linens ‘n Things transaction may shed some light on the investors’ thinking about Lord & Taylor. During a Nov. 2005 discussion of Linens ‘n Things, Baker told CPN ,“That could have been more of a real estate transaction, but in the end (the chain) was bought to be operated.” He said of the Linens ‘n Things stores, “We think they’re good locations in very good markets, and they should be very competitive in the industry.”

This is not just a real estate deal - at the surface, it looks like Lord & Taylor, in some consolidated form, will exist for the foreseeable future. But, I won’t get too attatched to the Lord & Taylor in my local mall. It probably won’t be here much longer.

Related posts

• No related posts.