2012: A year in review - Retail winners and losers
Faced with continuing challenging trading conditions in 2012, retailers responded with a number of different strategies to try to grow their businesses. International expansion, new and larger format stores, revamped product lines and sustainability initiatives were the chosen route for some, while others were forced to lay off workers to cut costs.
Japanese retail giant Fast Retailing underwent major expansion this year, opening the world's largest Uniqlo store in Tokyo's upscale Ginza shopping district, boasting 12 floors and a total retail space of 4,959 square metres. In May, Fast Retailing announced plans to set up a subsidiary company in China to oversee its 'aggressive' expansion plans in the country, just a month after it said it would open 62 stores in China during its current financial year - taking its store count there to 142, by the end of August.
Marks & Spencer
Despite beginning the year with declining sales, British retailing giant Marks & Spencer (M&S) has driven its business forward through technology and sustainability initiatives. M&S has been rolling out visual touch screens, allowing customers to combine different garments and create outfits. It also launched an online outlet format in February, saying it would offer a selection more than 1,300 clothing products at up to 40% off standard prices. In October, the company announced it would open the UK's largest dedicated e-commerce warehouse early next year, which will distribute 2m clothing and home products a week. In June, M&S claimed to be the first major retailer to become carbon neutral - it now claims to recycle 100% of its waste.
UK luxury retailer Burberry revealed a rise in full-year profits in May - with especially strong growth in men's wear - announcing plans to open more large format stores. The luxury brand saw profits before taxes rise 24% to GBP366m over the year ending 31 March, while revenue also increased 24% to GBP1.8bn. Retail revenue was up 31%, with comparable store sales growing 14% over the year. Meanwhile, the company opened 23 new mainline stores over the course of the year, including its first flagships in Hong Kong, Paris and Taipei. Going forward, Burberry announced plans to open 15 mainline stores in the coming financial year, with a 12-14% increase in average selling space as it shifts from smaller to larger format stores, and focuses growth on emerging and flagship markets.
After a less than impressive year in 2011, US casual clothing retailer Gap seems to be back on track. The company announced in November it had raised its full-year earnings, after Q3 profit jumped 60% to US$308m, thanks to higher sales of new and revamped product lines. Net sales also rose 8% to USD3.86bn, while comparable sales increased 6%. Gap also went after major global expansion in 2012, opening its first store in South Africa in March, and announcing plans to enter Lebanon, Georgia and Azerbaijan too. In September, Gap opened its first stand-alone store in Mexico, as part of efforts to expand in fast-growing Latin American retail markets.
Seemingly one of the few North American department stores to finish 2012 without huge cuts in profit margins, (or having to file for bankruptcy), US department store operator Kohl's announced plans in March to open eight new stores, employing 1,000 staff. It also planned to remodel around 50 stores this year, with updated check-out stations, newly designed shopping carts and upgraded fitting rooms. Kohl's also announced plans in January to build a new distribution centre in Texas to handle e-commerce orders for central and Midwest states, creating 400 jobs over the next three years. Kohl's e-commerce sales were up by more than 50% in 2010, and were expected to top US$1bn in the current fiscal year.
North American department store chain Sears suffered a catastrophic 2012, starting with a January announcement that it planned to close as many as 120 stores after recording poor holiday sales. The same month, reports emerged that lender CIT Group had halted loans to the company's suppliers, and that Sears Canada was cutting 400 jobs across the country. In February, the announcement came that the retailer overall had suffered a full-year loss of US$3.1bn, and more reports of layoffs across North America followed suit. With 2012 coming to a close, Sears saw its Q3 loss widen to US$498m in November, with revenue declining 5.8% to US$8.9bn - which the company blamed on having fewer Kmart and Sears full-line stores in operation.
Another American retailer facing a troubling year was department store JC Penney, which experienced 12 months of losses and layoffs. Thousands of staff were predicted to lose their jobs as the retailer's new CEO Ron Johnson took the stage in January and the company booked a US$152m loss for the year - against a US$389m profit the year before. In April, the inevitable announcement came that JC Penney Company Inc would be axing 10% of staff at its corporate headquarters in Plano, Texas, as part of plans to achieve US$900m in cost savings over the next two years.
US women's wear label Betsey Johnson - known for its over the top and embellished designs - entered Chapter 11 bankruptcy protection in April, after attempts to find new equity investors or sell the brand failed. The firm operated 63 stores across the US, Canada and the UK, employing 350 people. Going-out-of-business sales started in May at all 54 US Betsey Johnson stores and nine outlets, with apparel, shoes, jewellery and handbags available to buy, along with all store fixtures such as apparel racks, shelving and lighting.
American fashion retailer Urban Outfitters saw its fourth quarter profit nearly halve in March, after markdowns to clear slow-moving women's wear cut margins. The company, which operates the Anthropologie, Free People and Urban Outfitters brands, admitted that income in the three months to 31 January had fallen 47.7% to US$39.3m, down from US$75.2m for the same period the previous year. Urban Outfitters also experienced legal turmoil this year, most notably for a trademark violation lawsuit issued by the Navajo Native American tribe.
Britain's largest retailer recorded a drop in full-year profit across its UK operations, with the company's underlying sales having fallen for four consecutive quarters leading up to the end of February. The head of Tesco's operations in the UK, Richard Brasher, also decided to leave the business in March, and the company was forced to close four of its hypermarkets in China in August, as it grapples with what it called the "challenging" economic environment in the country. Going forward, however, Tesco is investing US$1.59bn in revitalising its domestic business - including efforts to boost its clothing sales - so perhaps 2013 will see it amongst the year's winners.
More than 180 companies have now signed the Accord on Fire and Building Safety in Bangladesh following the collapse of the Rana Plaza factory building in Dhaka, which killed more than 1,100 people las...
This report analyzes the worldwide markets for Sports and Fitness Clothing in US$ Million by the following Product Segments: Sports Apparel, and Fitness Clothing. The report provides separate comprehe...
The Rana Plaza factory disaster should be a wake-up call for everyone involved in the apparel industry - and the catalyst for real, systematic change in Bangladesh - the US Senate was told during a sp...
Vestiditos is expected to continue to lead childrenswear with its Mimo & Co brand, opening new outlets and further strengthening consumers’ loyalty; they trust this brand due to decades of leadership....
Luxury brand Burberry is working to "control the things it can control" as luxury footfall declines amid macroeconomic uncertainty around the world....
- Wearable technology a key trend for 2015
- Retailers react to India forced labour allegations
- Moisture management fabrics enter a new era
- Mexico urges fast-fashion brands to source locally
- COMMENT: Innovation is the name of the game
- Hazardous chemicals found in children's products
- VF rolls out plan to eliminate harmful chemicals
- October "a scary month" for US apparel retailers
- UK Primark supplier goes into administration
- Raising the minimum wage may reduce employment