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Morgan Stanley Luxury Buybacks, Retail and Vacation Reorders – WWD

Retailers are ready to tell their stories.

While supply chain support further complicates business operations and omicron variation emerges, a host of top executives from across the industry have signed up to attend the Global Retail & Consumer Conference Virtual Morgan Stanley on Thursday, sounds like bullish notes for the holiday and beyond.

John Idol, CEO and President of Capri Holdings, is actively looking at more conversion goals. Brett Biggs, outgoing CFO at Walmart Inc., says the company has “a lot of different potential branches for growth.” Erik Nordstrom, CEO of Nordstrom Inc., said it will get its Rack business on track. And Adrian Mitchell, CFO at Macy’s Inc., said November sales were “beyond our expectations”.

Here, plenty of information about future retail executives is persuading investors (even if some of them make their own way to the door).

Capri

John Idol may be preparing transfer of CEO rights to Joshua Schulman next year, but he doesn’t appear to have slowed down at Capri, which started with Michael Kors and grew through the acquisitions of Versace and Jimmy Choo.

When asked for feedback on his deals to get Versace and Jimmy Choo on board, Idol said, “I don’t want to win, but I want to smile for a moment because I know when we buy Jimmy Choo. , and then we bought Versace , I think the investment community as well as the fashion community did not understand how an American company could take over two European luxury companies and succeed ” .

Versace was a $800 million brand when it was acquired at the end of 2018, and Idol closed that $150 million business immediately as the approach changed. From that $650 million base, the brand has expanded and is expected to hit $1 billion in sales this year.

“It just happens in a year or two,” he said. “It took five and it took 10 years. So we’ve been making that investment for a few years and it’s going extremely well. And we are committed to luxury. That’s what that brand stands for. ”

Capri plans to continue growing through the acquisition.

“We will be disciplined,” Idol said of the company’s approach to trading. “We believe that we will continue to focus solely on the luxury sector, which means mainly, and I would almost say only, that European luxury companies are indeed capable of reaching at least 1 billion dollars because it’s not really worth our time and energy and the effort to do something will only add up to hundreds of millions of dollars, even though it’s a huge business. It takes synergy and effort to get that number into a few hundred million the way it does over $1 billion in business.

“So we’re active,” he said. “We are actively looking. We actually even engage in select chats, nothing is going on, but we are active.”

Walmart store at night

ONE Walmart store.
Courteous photo

Walmart

For Brett Biggs, longtime chief financial officer and executive vice president at Walmart, this looks to be The ultimate holiday at the retail giant.

The CFO recently said he is leaving the company and heading into the unknown. “Probably for the first time in my life, I have absolutely no idea what I am going to do,” said Biggs, adding that he will continue his nonprofit, see his family and spend more time with his family. adolescent age. “Perhaps I’ll be a little more involved in golf. That will be part of the plan,” he said.

But as Biggs heads to nine positions behind, he says he’s leaving Walmart in a good place. “The strategy is as solid as I’ve seen in the company. And I think now we need to fight that. But when you have a competitive environment and the macro environment is constantly changing, you will continue to adjust that strategy.”

Biggs said his successor will come with great development opportunities laid out.

“When I come [and joined Walmart] In 2000, I can say we had $160 billion in sales, and now we’re over $500 billion. And I remember thinking about implementing supercenters at the time and what that might look like. But now I look at it and I just see so many different potential branches of growth that I think it’s amazing what this company can do.”

In addition to its core retail business in the United States, Walmart has expanded through its e-commerce and marketplace, with Flipkart in India; through its growing online advertising business and beyond. And he said consumers, which have helped fuel business during the pandemic, will remain strong next year.

Nordstrom Rack

Nordstrom Rack

Nordstrom

Nordstrom is expected to show better results in the upcoming quarters, with a lot of upside potential from a Rack fix.

Erik Nordstrom, CEO of Nordstrom: “We see results improving in Q4 and the first half of next year.

“We did a lot of research into our Rack business,” he said. “In the long term, we see an opportunity to grow the business and add stores. In less time, we need a better composite performance before we do that. ”

Nordstrom Rack’s net revenue for the previous quarter, at $1.19 billion, was down 8% from the third quarter of fiscal 2019.

On the plus side, online sales of Nordstrom Inc. posted double-digit growth last quarter. Also last quarter, the Nordstrom 100-unit department store chain returned to 2019 sales levels.

The CEO discussed “difficulties around inventory levels and flows” that affected Rack last quarter and cited several steps taken to reverse the recent downtrend, among them “ leverage” packaging and inventory holding to offset supply disruptions, replenish merchandise from brands “coveted” by shoppers, and increase Rack brand awareness.

“We see opportunities for lower prices in some categories. But in some categories, it’s not the cheapest brand. It’s about coveted brands,” Nordstrom said.

Ninety percent of the top brands sold at Nordstrom full-line department stores are also in Rack stores. That line has been really challenged this year, says Nordstrom. Rack has about 250 stores.

Rack has recently experienced an over-reliance on lower-priced goods in certain categories, causing average unit retail prices to drop and putting pressure on operations. But Nordstrom is raising awareness of the Rack brand through its “More Reasons to Rack” marketing campaign, which launched in September.

“We have been around for a long time. What has maintained us is responsiveness to customers. We didn’t do that well, Nordstrom said, referring to recent results that showed earnings fell below expectations amid rising sales, largely due to higher labor costs and problem at Rack.

“We knew what we needed to do and were committed to it,” says Nordstrom.

macy shop logo

Macy’s
Polite Photo

Macy’s

The November sales at Macy’s “beyond our expectations,” said Adrian Mitchell, CFO.

“That being said, the holiday season is still four weeks before us,” Mitchell said. “And similar to last year, we know there will be some holiday drag going forward. So we won’t know what the sales numbers will be for the entire holiday season. But with the results in November, we are off to a good start.”

Macy’s is continuing to see upward momentum in Q2 and Q3 of this year as comparable sales increased mid-to-high while operating with less inventory.

Among Macy’s initiatives for the coming year cited by Mitchell:

• Launch of the digital marketplace for Macy’s and Bloomingdale’s, introducing new categories and products.

• Grow Macy’s communications network.

• Slowing department store closures while continuing to open non-mall stores in new formats including Market By Macy’s, Backstage, Bloomie’s and Bloomingdale’s The Outlet.

Macy’s in February 2020 called for the closure of 125 department stores over three years, and last month indicated that only 10 stores, of the remaining 60 that will close, would close in early 2022. Mitchell said Macy’s is re-examining the timing and amount of store closures. Shopping traffic has increased recently.

“We see Macy’s as the go-to destination for a wide range of categories with more depth in select categories that will drive sales growth and higher profits for our business,” said Mitchell. “So the digital market is a proven model here. A wider assortment of goods will drive more sales in this model. The commission structure drives profits. And with no inventory risk, we can further improve your inventory productivity. With digital, marketplaces, supplier-directed goods, and supplier-owned goods (wholesale) can “co-exist,” says Mitchell.

He cites “a more permanent shift from deep, broad promotions to much more personalized promotions using data science that is more profitable for businesses.” our business, the supplier’s business, and I’m sure our competitors are seeing that benefit, too. ”

And there is the potential for more change within the company. Macy’s hired AlixPartners to look into the possibility of segregation between the dot-com and its traditional businesses on Fifth Avenue and Saks, although Mitchell did not mention the issue.

More from WWD:

An Outside Perspective: Reading Fashion Data Science’s Tea Leaves

PVH builds momentum as Stefan Larsson teases plans for the future

Fashion’s Freshman Class, IPO Newbies in a New World

https://wwd.com/business-news/financial/macys-walmart-capri-morgan-stanley-john-idol-acquisition-1235008736/ Morgan Stanley Luxury Buybacks, Retail and Vacation Reorders – WWD

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