25911 Wed, 08/29/2012 - 4:46pm
Retailers have made so much news this summer that it makes one wonder if store executives ever take a vacation. Say goodbye to the idea that not much happens during the summer months.
Maybe all of the activity is because retailers are staying primed and ready as they prepare for an about-to-happen boom in consumer spending. Or perhaps the retail environment has become so competitive that it doesn’t allow for time off. For whatever reason, retailers seemed to have worked through what should have been their summer vacation.
J.C. Penney, a leopard suffering through the difficulty of changing its spots, has experienced a summer full of losses and lawsuits. Last month, in the midst of transitioning from a midlevel to a true department store, the retailer reported a sales loss of 22.6 percent, completing a mammoth $1.7 billion loss in sales for the first half of the year.
To worsen matters, Macy’s upped its legal efforts with another lawsuit to prevent J.C. Penney from selling Martha Stewart-branded housewares in its made-over stores. Martha Stewart is a cornerstone brand for the new J.C. Penney’s, featuring minishops for brands such as Bodum, Michael Graves, Terence Conran, Jonathan Adler and Tourneau.
Best Buy, battling a potentially deadly case of Amazon-itis (when consumers shop the store, but buy from Amazon.com), has been in the news often this summer. The company’s CEO Brian Dunn and founder/chairman Richard Schulze stepped down amidst a personnel scandal plus consistently awful sales reports. Hubert Joly, a Frenchman known for corporate turnarounds, was named the new CEO last month.
Best Buy has stated that it must shrink its stores to survive. This could be quite a task for a company best known for its big-box stores. At the same time, Shulze, Best Buy’s founder and former chairman who still controls 20 percent of the company’s equity, is attempting to buy the company and take it private.
More than one analyst said that Best Buy would benefit from going private, a status that J.C. Penney CEO Ron Johnson would surely enjoy as he buys time for his company’s would-be turnaround.
Walmart spent a not-so-relaxing summer looking to rebound from accusations that it bribed its way through a rapid expansion in Mexico. Walmart recently said it was slowing down on overseas expansion plans including those for China and Brazil. A U.S. congressional investigation into international bribery allegations is ongoing.
Sales at Kmart and Sears stores continued to decline, but that’s hardly headline worthy. On the bright side, Sears Holdings said aggressive cost cutting was narrowing its losses.
Restoration Hardware continued to be one of the most influential retailers in the home furnishings universe. The summer Las Vegas Market was chocked full of gray, faux-vintage, Restoration-like furniture and decorative items. As one trendspotter put it, “The ‘R’ word is everywhere.”
Restoration made news of a different sort late last month when Gary Friedman, the co-chief executive and face of the company, stepped down. Thankfully, we don’t have space to elaborate on that in this column.