Commentary

Have We Got A Deal For You! Four Retail Stories For The Price Of One

The increasingly frenetic and competitive world of getting the product from Point A and into the hands of consumers who not only want it cheap but also want it experiential is fully represented in this morning’s headlines. 

  • Amazon, the bricks-and-mortar killer that’s going bricks-and-mortar itself (check out the interview with International Council of Shopping Centers CEO Mike Kercheval by Marketing Daily’s Sarah Mahoney for the whys and wherefores), continues to skate on the thinnest of margins and announced a bigger loss than expected for the third quarter along with disappointing expectations — to analysts and investors, at any rate — for the holiday season. 
  • Barnes & Noble, one of its Prime victims, decides to not spurn The Bronx after all as its landlord succumbs to political pressure. It will remain as the only retail bookstore in the New York City borough. 
  • Sears, that paragon of combining at-home delivery with a far-flung retail empire — albeit on a 19th-Century model — denies a story that it will be closing an additional 116 Sears and Kmart stores by Christmas but admits that more closures are forthcoming when it announces its third-quarter results. 
  • And then there’s Ron Johnson, the sage of Apple retail and the dunce of J.C. Penney’s attempt to rejuvenate by attracting a more urbane consumer. He tells the Wall Street Journal a little more about his newest venture — a startup called Enjoy “that aims to bring some of the Apple Store mystique to online shopping.”

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Amazon’s shares tumbled 11% in after-hours trading, Forbes’ Ryan Mac reports, after it released its third-quarter results yesterday, with investors apparently getting antsy about how long its “investment mode” is going to last.  

“After an unusually busy first half of the year that saw the online retailer spend on developing everything from mobile phones and Hollywood-style production to grocery deliveries, investors were ready to see it curtail its ambitions and start delivering sustainable profits,” reports Reuters’ Deepa Seetharaman. 

Instead, net sales rose to $20.58 billion, lagging forecasts for $20.84 billion, and Amazon also projected 7 to 18% revenue growth over the busiest shopping period of the year, “a far cry from the 20%-plus pace that had convinced investors to overlook its persistent lack of profit in the past,” according to Seetharaman.

At a press conference at the Bay Plaza shopping center in Co-op City, meanwhile, Bronx borough president Ruben Diaz Jr. spoke about an agreement he brokered between the landlord, Prestige Properties & Development, and Barnes & Noble “to extend its existing lease for two years with no rent increase,” Winnie Hu reports in the New York Times.

Amelia Zaino, a Lehman College graduate student, had started a petition on Change.org imploring Prestige to “arrange a fair leasing deal for the bookstore.” It had garnered about 2,000 signatures by this morning.

“It was an insult to me as a Bronxite,” Zaino tells Hu. “They were taking my bookstore, and it’s not just mine; the community loves this place.”

On the Sears Holdings (store) front, “Inquiries with stores, mall managers and reporters across the country reveal that at least 55 Kmart stores, 30 Sears department stores and 31 Sears Auto Centers are scheduled to close before the end of January,” Mitch Nolan reported yesterday morning on Seeking Alpha. The company has already closed nearly 100 unprofitable operations this year.

But Sears spokesman Howard Riefs, whose name was reportedly attached to “the bottom of individual liquidation sale notices sent to local media since mid-September” about the closings, tells Gary Strauss at USA Today that “the store count and closures ‘isn't accurate,’ but did not provide store closures or layoff numbers.” 

“As we stated in our [second-quarter earnings report], we disclosed that we would be closing unprofitable stores as leases expire and in some cases will accelerate closings when it is economically prudent,” Riefs emailed. “And that we would consider closing additional stores during the remainder of the year.”

Oh, and “make no mistake, we believe the store will continue to play an integral role in our transformation….” 

Speaking of transformations, Ron Johnson is retuning to the retail fray with a vaguely outlined but apparently well-funded venture after spending a year-long sabbatical talking to entrepreneurs and venture capitalists.

“He realized that while customers start shopping online, e-commerce sites focus more on the speed and cost of delivery than on helping them buy the right products,” the Wall Street Journal’s Daisuke Wakabayashi reports.

The Information’s Jessica E. Lessin broke the story last month that the “godfather of Apple’s retail stores is trying to reinvent shopping again.” Lessin indicated that Johnson would be “launching a high-end delivery service for gadgets and dispatching employees in energy-efficient branded vans,” within her pay-walled story, Wakabayashi reports. “Without going into specifics,” Johnson told Wakabayashi, “we don’t need another delivery service.”

Ah, that brings up Google’s expansion of its same day delivery service, but that was that last week’s story — one we no doubt will be revisiting frequently.

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