7/9/2006 Retail Notes
I know I skipped last week, but it was a holiday so I hope I’m forgiven!
Interesting week this week with the June results being posted. Retailers have posted soft numbers for a few months now - is this the beginning of a trend or is it just a blip on the radar? June of 2005 was the strongest month of the year for retailers, so this year had some tough numbers to beat.
Is there a weird trend developing within Abercrombie & Fitch related to the shrinking physical sizes of their customers and the slightly larger cuts of some of their clothing? Seems that more than a few people I know are shopping at abercrombie kids (which posted a 9% comp in June) because they fit their clothes better than at the namesake Abercrombie & Fitch stores (which posted a 10% decrease in same store sales in June). Some message boards and blogs are slightly abuzz with what seems to be larger cuts in the 2006 BTS offerings from A&F. Is this an actual trend developing or is this just the work of hyperactive Myspace teens overthinking things?
Gap has announced some of their plans for the Fall season, including showing some of their new lines to analysts who has been impressed (see: Gap’s back-to-classics new fall line wows analysts). The new approach is a simple retreat back to offering the classics that Gap is known for and getting away from attempting to be overly fashionable. The new marketing campaign has Jeremy Piven and Mia Farrow in television spots.
Also under the same umbrella is the new offerings by Old Navy, which is attempting to get away from basics and get more towards higher end, yet affordable fashion (see: Old Navy aims for a little less Target and a little more Abercrombie). I guess Gap Inc. is going to use Old Navy as a leverage into/against the teen speciality retailers. Going forward with higher pricepoints and a quicker turnaround from concept to finished product in stores, Old Navy is looking to be much more aggressive in the coming seasons.
Will these two re-concepts work out for Gap Inc.? Time will tell, but as analysts point out, this turnaround process will be a little longer than just one season.
Look for Gap and Old Navy to start rolling out their new merchandise and offerings in the next two weeks.
Lastly I’d like to point out that there is a kid in the local Dunkin Donuts who is remarkably consistent in his up-sell. I’ve never seen someone try to up-sell so much at a Dunkin Donuts, but this kid is good. Ask for a small coffee and he’ll ask you if you want a medium for just thirty cents more. Ask for one donut and he asks if you want a second for just fourty cents more. He’s good with the prices, great with the customer service, and very personable. I wonder how successful he is with this.
It goes to show you that whether you are selling a high-end television or a cup of coffee, there’s always another sale to be made and a relationship to be created.
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One really crazy thing that I noticed on the Gap website that they appear to be rolling out in the Fall (or perhaps I just never noticed it) is a school uniforms line at GapKids. As someone who spent many years in a catholic school uniform I’m very attuned to how important labels and other tiny details are when it comes to getting dressed for school, and if I were still at St. Mary’s I’m sure I’d much rather be wearing the Gap pants than the itchy Flynn O’Hara ones.
I saw that, too ! One of the worst things about going to private school was going to the uniform store - the only one in the area that served like 20-30 schools - and attempting to get the new uniform for the beginning of the year. Go too late in the Summer and you’re looking at a few hour wait to get what you need! The worst.