No Turn On Red

Hurricane Gustav continues to develop into a monster storm in the Gulf of Mexico. With the tragic lessons learned from Hurricane Katrina, residents and retailers alike are taking a more proactive approach to the arrival of this hurricane.

Yesterday, I talked about how well Home Depot was using their Twitter account to communicate hurricane tips and store information. Taking a look at the Home Depot Twitter, it appears that they have a dozen stores staying open all night in the Gulf Coast area. They’ve also brought in out of town volunteers to work the stores, allowing the local employees to secure their homes and evacuate. In addition to providing valuable information online, they’re also bringing supplies to the communities in need and staying open to allow people the time to get what they need. Home Depot also offers a section on their website with a wealth of information related to hurricane preparation.

The Wall Street Journal profiled the Walmart emergency operations center in Bentonville. Within the operations center, the retailer monitors the storm, communicates with the stores in the path of the storm, and plans on how to bring needed supplies, merchandise, and resources to the affected region. Walmart rapidly deployed resources to the Gulf Coast region after Hurricane Katrina in 2005 and can serve as a model for retailer involvement in disaster relief.

Winn-Dixie has a list of their store closings on their website. Nola.com has several photos showing a very empty Winn-Dixie in New Orleans.

Publix is the sponsor of a website called Hurricane Gustav Resources. This website seems to be a great resource of shelters that are open and evacuation information.

Obvious business motives aside, it is great to see these businesses working so hard to assist their communities. If you know of other retailers working to assist the Gulf Coast, please let me know in the comments.

Photo from Flickr user Maitri, used under Creative Commons.

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As the Gulf Coast of the United States makes preparations for the impact of Hurricane Gustav, I have to say that I am very impressed by the way Home Depot is using Twitter to communicate preparation tips and store information. The Home Depot Twitter account, which is generally filled with helpful home improvement tips, has switched gears to provide information targeted to Gulf Coast residents and those who are in the path of the storm.

Recent updates today have included general hurricane preparation tips about moving appliances, the danger of carbon monoxide from emergency generators, and reminding people to locate their main water and electric shut off switches. There has also been information about store closings and the availability of water.

This is a great use of Twitter by a retailer. They’re using the service to focus communication on information related to this very dangerous storm. I see this as a way for the retailer to assist the community that it serves. Good job by Home Depot.

My thoughts go out to everyone in the path of the storm.

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First in maybe a weekly column? Hopefully.

Some quick retail notes for this lazy Sunday:

I hear that the new Abrecrombie & Fitch Back To School Preview floorset is this week. The seasonal transition at A&F is very impressive and seamless. Sales will be strong but it will be tough for A&F to compete with themselves and the high comps they had with BTS 2005 (June, July & August had comps of 38%, 22% & 24% in 2005). Look for solid increases in the gross margin with decreases in markdowns and sales for this upcoming season. This will be another great season for A&F.

Two quickies from the Loss Prevention blog: Cop kills man in grocery store shoplifting and Kroger manager jumps on hood of shoplifter’s car. I have nothing to say about the unfortunate shooting, but I’m sure Kroger’s corporate management doesn’t look fondly on employees jumping on cars to apprehend shoplifters. There has to be more to the story than that.

Last week, the Chicago Sun-Times ran an article showing where some of the former Sears executives have gone: Life After Sears.

And finally, a story from Starbucks showing how a good idea from worker, combined with the support of co-workers, the corporate office and customers can lead to a very positive outcome: Starbucks worker brews plan to get java to GIs in Afghanistan. A Starbucks employee from Maine organized a campaign where her co-workers donated their weekly bag of coffee they recieve as a benefit and, with corporate approval, solicited donations from customers. The result? 106 pounds of coffee sent to troops in Afghanistan. [via Starbucks Gossip]

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The May comp store numbers for the retail industry:

In the mall: Abercrombie up 3.0, Aeropostale down 1.1, American Eagle up 11.0, Ann Taylor up 12.0 , Hot Topic down 6.0, Limited Brands up 7.0, and Pacific Sunwear down 2.6. Gap as a company was down 6.0, however the break down between companies is interesting. Gap North America was down 5.0, Gap International is down 13.0, Old Navy was down 8.0, but Banana Republic is starting to show signs of a turnaround with a 3.0 positive comp.

In the department store sector: Dillard’s up 3.0, Federated up 9.2, JC Penny up 11.1, Kohl’s up 3.1, Nordstrom up 7.8, and Saks up 5.7.

In the battle of Target v. Wal-Mart and warehouse stores v. warehouse stores, Target was up 5.7 & Wal-Mart was up 2.0. Sam’s Club was up 4.0 while BJ’s Wholesale was up 4.2 and Costco was up 10.0.

Generally a pretty positive month across the board. Gap continues to struggle and Kohl’s is curiously one of the few companies with positive marks that didn’t beat investor estimates. Pacific Sunwear was down 2.6 after a fantastic April in which they posted a 14.0 positive comp.

Minyanville posts a good roundup of the May numbers, covering some retailers I didn’t cover here.

Interesting month and a good start to the Summer season in retail.

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Here is one thing I believe in: customer service is not one way street.

Customers, as well as businesses they deal with, have an obligation to better customer service. Customer service cannot go from bad to good if the company doesn�t know that they are providing bad customer service. On the same hand, customer service cannot continue to be good or great if the company doesn�t know that they are already providing that level of service. It is important for the customer to communicate with whoever they are able to in order to help build good customer service relationships.

I�d like to share with you five ways that you, as a customer, can improve customer service in the places that you shop. Although the scope of this post is geared towards retail, restaurants, and industries where customer interaction is one-on-one, the basic tenets that I will describe can be applied to almost all of our business relationships.

Most of these ways should seem simplistic and obvious, but that’s the point. Talking to friends and family, it doesn’t seem that a lot of people are doing these incredibly simple and easy things that they can be doing to help businesses improve customer service.

For a little back story as to why I wrote this, check out my other post: On poor customer service and me being a poor customer.

Continue reading this entry

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Target released their Q1 numbers, showing positive sales trend, positive comp store sales and a rise in net profit, but didn’t hit the marks set for them by Wall Street and their stock took a quick hit in an active day of trading.

The numbers: overall revenue up 12.1%, comp sales up 5.1% (compared to 6.2% Q1 LY), net profit up 12%, but selling, general and administrative expenses were up 15.3%. CFO Doug Scovanner said that the rise in expenses was due to the construction of three distribution centers and the rise in the number of stores they remodeled this quarter. He maintains that the yearly expenses for this capital improvement will be flat from last year, explaining: “As you know, as well, we remodel and expand a very substantial number of stores each year. We don’t even remotely try to time that by quarter for any particular purpose other than doing it when it makes the most sense. That drove a bit more expense in the quarter than we would expect for the balance of the year. That line item, per sae, should end up being flat year-over-year, but ended up putting some pressure on this quarter’s expenses.”

Scovanner talked about the positive response to the new apparel collections, including those by Luella Bartley and Tara Jarmon and growth in areas such as outdoor, electronics, and food. He also cites the growth in the average amount of items per transaction vs. the growth of the price per item.

Food seems to be an area in which they are making a bigger push. They are in the process of bringing all of their stores up to a newer food prototype layout, with about 650 of their 1418 stores having this new layout today, as many as 950 having an expanded food layout by year’s end and between 50 and 75 stores which will have an even larger food offering than the prototype.. Responding to a question, President Glegg Steinhafel said that although they do not have plans to offer fresh food (produce / meats) in the stores with the largest layouts, they will be focusing on offering a larger selection of their current assortment.

Steinhafel also commented on soft sales in home, the Global Bazaar shop concept from this past winter and tweaks that they are planning for the next year. They are looking to cut down the average unit price of the products in this area in order to spur more impulse buys, rather than having the customer wait for the items to go on sale.

To me, this last part actually makes a lot of sense. Target did get a lot of positive press for their global bazaar shop, but better merchandise mix between full scale furniture and smaller decorative/useful items will allow for more impulse buys, as they say. I will be very interested to see what tweaks they implement as the area was very beautiful, well designed, but didn’t seem to hit the pricing mark for a lot of their consumers.

Target posted very good numbers but Wall Street went into a little panic. Things wil llevel out and I think Targets yearly prospects look fantastic, as always.

Stephen Simpson at the Motley Fool feels that soon may a good time to buy TGT:

OK, so I’ve been positive on Big 2 discount retailer Target (NYSE: TGT) for a little while now and it’s gone all of nowhere. But the closer this one gets to its 52-week low, the more interested I get. I don’t often like to buy huge companies in highly competitive businesses, but at the right price I’ll consider just about anything.

…

I can understand the idea of staying away from Target because of overall fears about the health of the U.S. consumer. That’s not to say that I agree, but I at least can see the point there. In any case, these shares are getting more than a little interesting. A few more points on the downside and I just might add these to my own shopping cart.

More coverage from BusinessWeek.

Full transcript of the conference call here.

Full SEC form 8-k filing here, via Yahoo.

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Like Kohl’s, JC Penney also released some very solid numbers for the quarter: overall sales up 2.5%, comp store sales up 1.3% for the 12th consecutive quarter of positive same store sales, and profits up 22.1%. The company cites strong sales in fine jewelry, mens, childrens, and footwear while they say sales were soft in womens apparel, unlike rival Kohl’s.

According to president Ken Hicks on the conference call, “gross margin continues to benefit from the performance of our private brands, as well as continuing improvement in seasonal transition and merchandise flow.” This follows up his earlier remarks on womens apparel, when he said “In our women’s apparel business, we are taking aggressive action with markdowns to keep our inventory fresh, as well as building or key brands and adding new brands such as a.n.a. In addition, we continue to develop brands such as [E. Spiff], which we will introduce this fall in traditional careerwear.”

This call also gave us the first real look at the partnership between JC Penney and Sephora. Outlining the future rollout, Ken Hicks said “Beginning this fall, we will bring Sephora into a handful of JCPenney stores, and next year, our plans are to add Sephora, primarily in new stores, with some additional existing stores also having the concept. A more extensive Sephora rollout is planned for 2008.”

Walking into any JC Penney these days, one can see that there is opportunities to develop their womens apparel business further. Hicks blames this on general negative trends in fashion, (”.. the lack of really exciting things in fashion aren’t helping the business”) which completely suprises me. It’s clear that JC Penney may not be offering really exciting things in fashion, but don’t blame it on fashion in general.

Back to the numbers: direct sales via catalog were up 3.9%, but Internet sales were up over 22%. The modest gains in diret mail, which have been continuing to slip, lead me into the news that they have announced that they are de-emphasizing the catalog (via marketingblurb).

JC Penney is not suspending their print catalog, but at the annual ACCM Catalog Conference, a company official announced that the retail giant would focus on online rather than catalog sales. It seems that their online sales are growing at 23% per year, while print sales are at 10% growth and falling every year.

DMNews has more on the story. In fact, they are critical of the move, saying:

Former Lands’ End president/CEO Mindy Meads at the Philadelphia eTail 2005 conference cited a study claiming that customers who get catalogs generate a 15 percent increase in transactions and a 16 percent jump in overall spend.

Retailers like J.C. Penney don’t want to lose the chance to train the next generation of shoppers — kids watching Mom and Dad open the catalogs, then call in an order or go online. No catalog, no brand recall. Too much reliance on one channel of sales is not good, either. What if there is more stringent regulation down the road for e-mail and e-commerce?

Again, more here via DMNews.com

Like I’ve talked about before, JC Penney is at a stage where they can recapture what they are missing – through initiatives like the Sephora deal, building the private brands and even sponsoring the MTV Video Music Awards. As a consumer, I think their key to winning us back is through developing brands that we want to shop and making their buildings more exciting and fun to shop. I can’t tell you the last time I’ve gone into a JC Penny that hasn’t felt dated and stale.

JC Penney had a good quarter – higher profits on only slightly higher sales – and this could set them up for a very solid year.

More information via marketwatch.com’s coverage of the results. Retailstockblog has a complete transcript of the call, as well.

The full SEC form 8-k is here, via Yahoo.

Full transcript of the conference call from Seeking Alpha.

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Minyanville has posted a great roundup of all of the retail sales reports for April. They’ve got comp percentages for just about everyone and snarky comments for about half. I love it.

Retailers benefitted from the late Easter and most were really able to drive sales through the roof. Great numbers for some of the chains, not so great for others. Department and discount stores mainly show positive results: Federated down .8, Target up 10.4, Wal-mart up 6.8, Kohls up 13.4, Jc Penny up 2.6, Dillards up 10, Nordstrom up 7.3. Teen specialty retailers continue to show positive results: Abercrombie up another 17, Aeropostale up 8.4, American Eagle up 19, Pacsun up 14. The rest of the mall is hit and miss with Ann Taylor up 10.9, Children’s Place up 22, Claire’s Stores up 9 but Gap continues it’s downward trend, down 3 and Hot Topic was down 6.5.

Generally a pretty positive month but those with few suprises in retailers who didn’t beat their estimates or show a positive trend.

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