Panelists See Better Business
May 10, 2010,
Things are looking up, but the retail business remains very challenging. That was the consensus view of a group of panelists at the recent retail outlook session sponsored by management consultants Emanuel Weintraub Associates.
Overseas markets have huge growth potential, said Gilbert Harrison, ceo of investment banker Financo. He also sees the market as ripe for acquisitions, but added that potential buyers are taking their time.
“The retail sector is beginning to focus again on expansion,” he said.
Macy's has swung its focus to getting more spend out of existing customers as opposed to luring new shoppers, according to Peter Sachse, the company's chief marketing officer and chairman/ceo of macys.com.
The average Macy's customer shops the store 12 times a year and spends about $100 each visit. Although the loyal Macy's customer drops the same amount per visit, she hits Macy's 24 times a year, he said.
“Everything we're doing at Macy's is embracing those loyals and encouraging them to make one more visit,” he added.
Nine West ceo Andrew Cohen said price increases are inevitable.
“As of May 1, we've seen a 21% increase in labor [costs] in China,” he said. “I think price increasing are coming, and I think at this point in time, price increases will be difficult for the consumer.”
Tanger Factory Outlets ceo Steven Tanger said traffic and sales are both up in his company's outlet properties.
“Our tenant partners have gone from defense to offense,” he said. “For the first time in many, many years we did not have a single [tenant] bankruptcy during the first quarter.”
Iconix Brand Group expects to announced more off-shore joint ventures that will expand its brand portfolio into other countries, said Neil Cole, ceo.
The company already has 50/50 off-shore partnerships in China, Latin America and Europe.
“We just realized that we didn't understand the local culture,” he said.
The U.S. government has substantially increased its budget to help put U.S. businesses into international markets, said Anastasia Xenias, senior international trade specialist, U.S. Department of Commerce. To participate in the program, products must have at least 51% of U.S.-made content, she said, noting that a brand's intellectual property is naturally 100% U.S.