THE CHEAT SHEET
The Future of American Retail
A J. Crew campaign from 2017 | Source: Courtesy
After months of negotiations, American retailers including Neiman Marcus and J. Crew are emerging from bankruptcy restructurings
Many have come through the process with new ownership and a stronger financial structure, but they still face an intensely challenging business environment
The shakeup likely isn’t over, as companies need to implement restructuring plans and the outlook for the coming months remains intensely uncertain
This summer, US bankruptcy court listings have read like the floor plan of a suburban mall. J. Crew, Neiman Marcus and Brooks Brothers are among the high-profile, deeply in debt brands that sought to restructure as the pandemic undermined any hopes of maintaining already struggling businesses. After months of fraught negotiations, many retailers are emerging from the process.
J. Crew and Neiman Marcus both won approval for their restructuring plans in the last month. Brooks Brothers has been acquired by SPARC Group, a joint venture between licensing firm Authentic Brands Group and mall operator Simon Property Group. Meanwhile, New York City malls will be allowed to reopen next week, but at only 50 percent capacity.
The Bottom Line: Thousands of jobs are on the line, as are swathes of once-desirable real estate. What happens next will help determine the post-pandemic shape of US retail.
Luxury Watchmakers Court Consumers in Shanghai
Assembly of Vacheron’s Calibre 2260SQ | Source: Vacheron Constantin
Swiss-based watch fair Watches & Wonders is hosting an event in Shanghai next week
Sales of Swiss watches have collapsed this year, hurt by pandemic-related store closures and reduced travel by Chinese consumers
The show is dominated by Richemont, whose watches division saw sales plummet in the three months ending June 30
In the rarified world of luxury watches, the annual Watches & Wonders trade show is a big deal. This year it didn’t happen. Like so many of the industry’s big events, it was Covid cancelled, replaced by a digital event in April. But after a brutal season for the sector, it’s going live in Shanghai next week. The five days of product launches, panel discussions and demonstrations are an opportunity to address the industry’s biggest market on its home turf.
Chinese consumers typically shop for luxury items abroad, but with travel restrictions in place domestic purchases have increased. While Swiss watch sales globally fell 17 percent in July, the most recent month for which data is available, sales in China jumped 59 percent.
Richemont, whose watch brands like Piaget and Vacheron Constantin dominate the event, needs those consumers. Sales from its specialist watchmakers division plummeted 56 percent in the three months between April and June, contributing to an overall sales drop of nearly 50 percent. The group has slashed its proposed dividend in half in a bid to conserve cash this year.
The Bottom Line: Covid-19’s impact on hard luxury has been savage. As the industry settles into a new normal, brands must adjust their marketing tactics swiftly to encourage a recovery.
Goop’s Wellness Summit Goes Digital at a Discount
Gwyneth Paltrow speaking at the In Goop Health Summit | Source: Getty Images
In Goop Health, the series of wellness summits from Gwyneth Paltrow’s Goop lifestyle brand, is going digital on September 12
Tickets to the event range from $50 to $200, with a limited number of $5 discount passes available; it’s a steal compared to over $1,000 for the in-person version
The “at-home summit” will be hosted by Gwyneth Paltrow and Goop’s Chief Content Officer Elise Loehnen and feature panel conversations, experiences and workshops
In Goop Health, a lucrative event series from Gwyneth Paltrow’s lifestyle brand Goop, helped inspire a boom in beauty and wellness conventions. Like so many events disrupted by the coronavirus pandemic this year, it’s going digital next week. On September 12, Gwyneth Paltrow and Goop’s chief content officer Elise Loehenen will host a series of online discussions, workshops and experiences, which will be available on a password protected site until October 5.
The summits typically attract a crowd of well-heeled and wealthy clientele — tickets usually retail at $1,000 and up — serving as a fine marketing platform for Goop products and merch. The digital format will be more affordable at $50, though there is a pricier, and already sold out, $200 offer that comes with a kit of Goop products. There’s also a limited number of $5 tickets available in a nod to inclusivity.
The Bottom Line: Other events organisers have struggled to drive profits digitally. Goop may be controversial at times, but it sells.
Professional Exclusives You May Have Missed:
The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to email@example.com.
Was this BoF Professional email forwarded to you? Join BoF Professional to get access to the exclusive insight and analysis that keeps you ahead of the competition. Subscribe to BoF Professional here.