UofU Career Fair 2015

Career Fair

Career fairs are so much fun. A multitude of desks, filled with endless swag, including branded frisbees, chargers, pencils, pens, notebooks…the list goes on and on. Oh, and not to mention the opportunities to work with high-quality companies. It is always important to have your 30-second pitch down, or in my case, that one question I always ask employers (I will not reveal my secret “sauce” here). Overall, fairs help you learn what a company is and what job posts they have available to your liking. I know you all are wondering, what was my favorite memorabilia that I snatched? The answer: Walgreens Co. playing cards!

 

Walmart Bets On Curbside Grocery Pickup In Bid To Beat Out Amazon, Target

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On Tuesday, Walmart announced the launch of a grocery pick-up service in eight new markets including Atlanta, Tucson and Salt Lake City.

Shoppers in these as well as five test markets will be able to order their groceries online on Walmart.com, then drive to their local Walmart store to pick up their order in a designated space reserved for the service.

“With 70% of the U.S. population living within 5 miles of an existing Walmart store, this is an idea that simply makes sense for us,” wrote the retail giant’s head of e-commerce Michael Bender in a blog post.

“We have the locations already in place, and with our website and mobile app expertise, we’re able to combine those things in a way that helps our customers save time and still take advantage of our everyday low prices.”

The move comes as Walmart competitors including Amazon.com AMZN -8.87% and Target TGT +0.00% test out e-commerce grocery initiatives of their own.

Amazon is testing its subscription AmazonFresh grocery delivery service in urban markets including Seattle, Brooklyn and Philadelphia.

Target, meanwhile, has been rolling out local pickup outside stores in San Francisco, New York and New Jersey in conjunction with startup Curbside.  The Palo Alto-based company, which has raised $34.5 million to date, allows shoppers to buy goods from any nearby Target store online and then collect them without leaving their cars.

Curbside has also inked a deal with Best Buy BBY +1.25% in Bay Area markets, allowing customers to buy their gadgets via their phones and pick them up promptly from the parking lot.

Walmart will add new towns and cities to its grocery pickup rollout in the coming weeks, said e-commerce chief Bender.

“This new, easy shopping experience is an innovation that’s helpful for anyone with a busy schedule – particularly moms with small children,” he wrote in his blog post. “They can shop online and choose the pickup time that works for them, and they never have to unbuckle anyone’s seat belt.”

http://www.forbes.com/sites/clareoconnor/2015/09/29/walmart-bets-on-curbside-grocery-pickup-in-bid-to-beat-out-amazon-target/?utm_source=followingimmediate&utm_medium=email&utm_campaign=20150929

Neiman Marcus Shoppers Flock Online, Nordstrom Also Flying High

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When fellow Forbes contributor Walter Loeb told me he’d read that high-end retailer Neiman Marcus is reporting more than 25 percent of its revenue comes directly from online sales, I said the reporter must’ve garbled the information. That’s such a high percentage of sales it strains credibility. After all, online sales represent approximately 7.2% of total retail sales in the United States (source: Census Bureau, Department of Commerce).

Granted, apparel holds the largest share (according to eMarketer, in 2015 17.2% of total eCommerce sales will be generated by apparel), but 17% of 7% is still a pretty small number. How could it be?

Turns out I was wrong. Retail trade publication Internet Retailer also offered up the 25% number as cited by Neiman’s Chief Operating Officer Don Grimes on the company’s Q4 2015 earnings call. Couple that statistic with an increase in sales at stores open longer than a year of more than 2%, and it gets clear why the retailer is filing for an IPO. Those are some serious increases across the board.

To ground this data in reality, I took a look at Neiman competitor Nordstrom JWN +0.00%, data. It turns out that eCommerce accounts for 19% of that company’s total sales. Compare that with mass merchant retailers Walmart and Target TGT +0.00%. According to Fortune magazine, each generates about 3% of its total sales online. Granted Walmart and Target sell products other than apparel, but the order of magnitude different is somewhat shocking.

For retailers like Nordstrom and Neiman, “omni-channel” has become a reality. While they’re still spending a bundle on great-looking stores, they’ve got to figure out a way to manage their inventory in a new world. After all, you don’t necessarily want to keep safety stock for on-line sales…and you have to seriously consider that you’re likely going to go out of stock on something. The only way to satisfy the customer is to get that inventory from one of your stores.

The art of managing this inventory is the core of the next retail frontier. I knew that. I’ve heard this consistently from retailers and the technology vendors that serve them.

The part that’s surprised me is the retailers who have to traverse that frontier first. Neiman’s on its way, and if it gets omni-channel right, its IPO could be a real barn burner.

 

http://www.forbes.com/sites/paularosenblum/2015/09/28/neiman-marcus-shoppers-flock-online-nordstrom-also-flying-high/?utm_source=followingimmediate&utm_medium=email&utm_campaign=20150928

Lassonde Student Entrepreneur Conference 2015

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The Student Entrepreneur Conference (SEC) is held each year at eBay in Draper, Utah. The 2015 SEC had an innovation tournament, networking sessions, and a keynote speaker. The speaker this year was Travis Cook from SolutionStream.

I helped put on the innovation tournament and participated in it as well. The first session we formed teams and generated ideas about how to solve the problem of the traditional alarm clock. The second session we started building our prototype, “HappyWake,” and performing iterations. The last session we perfected our prototype, and formulated a 2 minute speech, to be presented in front of the audience.

In the end, we won $100 and took home our “Functionality” trophies. During our tournament, my team specifically focused on the problem, how to solve the problem, and what was realistic. (The picture above displays our final prototype; a robot that throws balls on the sleeper’s head, and tickles them to wake them up in the morning!)

 

Volkswagen’s CEO Has Resigned, But That Doesn’t Solve Its Problems

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Volkswagen’s CEO, Professor Martin Winterkorn, has done the decent thing and fallen on his sword. This is his resignation announcement, posted on the company’s website:

“I am shocked by the events of the past few days. Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group.

As CEO I accept responsibility for the irregularities that have been found in diesel engines and have therefore requested the Supervisory Board to agree on terminating my function as CEO of the Volkswagen Group. I am doing this in the interests of the company even though I am not aware of any wrong doing on my part.

Volkswagen needs a fresh start – also in terms of personnel. I am clearing the way for this fresh start with my resignation.

I have always been driven by my desire to serve this company, especially our customers and employees. Volkswagen has been, is and will always be my life.

The process of clarification and transparency must continue. This is the only way to win back trust. I am convinced that the Volkswagen Group and its team will overcome this grave crisis.”

 It was hard to see how he could remain in post. Within a day of the US Environmental Protection Agency’s announcement on Monday September 21st that Volkswagen had rigged emissions tests on approximately half a million diesel automobiles sold in the US, Volkswagen’s share price had dropped by over 30%, wiping $27bn off its market cap. On Tuesday September 22nd, after giving a 6.5bn Euro profits warning that was quickly dismissed by analysts as vastly over-optimistic, Volkswagen admitted that 11m cars worldwide were fitted with the “cheat” software. The German newspaper Die Welt speculated that the costs of customer redress, regulatory fines and lawsuits might be sufficient to bankrupt Volkswagen (my translation, original in German):

The scandal has reached a dimension that could threaten the existence of what is currently the largest automaker in the world. The billions of costs and penalties that await the company, could crush even the best-capitalized corporation.

Volkswagen’s Executive Committee accepted Prof. Winterkorn’s resignation and indicated that other heads will roll too. And then they said this:

The Executive Committee have decided that the company will voluntarily submit a complaint to the State Prosecutors’ office in Brunswick. In the view of the Executive Committee criminal proceedings may be relevant due to the irregularities. The investigations of the State Prosecutor will be supported in all form from the side of Volkswagen.

According to the UK’s Telegraph newspaper, while the Executive Committee was meeting, the public prosecutor’s office in Brunswick announced “a preliminary investigation of unnamed employees at Volkswagen in connection with the allegations of diesel emissions manipulation”. It seems the Executive Committee, anxious to prove their goodwill, will voluntarily cooperate with this investigation. Something tells me a few Volkswagen middle managers are about to have the book thrown at them.

Prof. Winterkorn’s resignation is the latest in a spate of high-profile CEO resignations. Earlier this year, Toshiba’s CEO, Hisao Tanaka, resigned when the company’s six-year accounting fraud was exposed.  And the CEO of United Airlines, Jeff Smisek, resigned on September 8th over a federal investigation into whether the airline had traded favors with the chairman of the Port Authority of Newark and New Jersey.

But not many have been so prompt. In fact most embattled CEOs try to hang on. Being pushed, rather than falling, is the order of the day. Some even manage to stay put. Here’s a sample:

  • BP’s Tony Hayward resigned after three months of such inept handling of the political fallout from the Deepwater Horizon oil spill in 2007 that he was described as the “most hated man in the US” (in an interesting twist, Fortune reports that Volkswagen has just hired the legal team that handled the Deepwater Horizon lawsuits)
  • Barclays’ Bob Diamond famously refused to resign after the bank was fined over $450m by regulators on both sides of the Atlantic for rigging benchmark rates: he was eventually forced out by public outrage
  • Deutsche Bank’s Anshu Jain suddenly resigned in June 2015 to everyone’s consternation, only two weeks after being given full responsibility for devising and implementing a new strategy to restore the ailing behemoth’s fortunes: but not long afterwards, the German regulator BAFIN issued a damning report which held Jain personally responsible for the bank’s numerous regulatory failures
  •  It took UBS’s CEO, Oswald Grübel, over two weeks to resign after the rogue trader incident that nearly destroyed the bank in 2011
  • Maria das Gracas Foster finally got round to resigning as CEO of Petrobras in February 2015 after over thirty executives were arrested on corruption charges
  • Stuart Gulliver remains at the helm at HSBC despite the bank’s indictment for sanctions breaking and money laundering
  • António Horta Osório still runs Lloyds Bank despite a string of regulatory fines for offenses committed on his watch.

Prof. Winterkorn is to be commended for his prompt action.  If only other CEOs were so willing to accept responsibility. Sadly, far too many prefer to delegate blame to their juniors.

But there is a wider issue here. Prof. Winterkorn may not have personally been involved in the test rigging, or even known about it, but in the rarefied world of multinational corporate CEOs, ignorance is no defense. That such corrupt practices took root and became widespread indicates weak corporate governance and executive incompetence. When this happens in a bank, we say it is “too big to manage” and call for it to be broken up. But “too big to manage” is not simply a phenomenon of the financial sector. Very large corporations such as Volkswagen are also next to impossible to manage. And they are also too big to fail. The US bailed out General Motors in the 2008 financial crisis because of the consequences for its massive workforce if it were allowed to fail. The same is true of Volkswagen.

Prof. Winterkorn presided over the massive expansion of Volkswagen, priding himself on the fact that it had become the largest vehicle manufacturer in the world. Pride goes before a fall, they say. Nowhere is that more true than at Volkswagen. Prof. Winterkorn’s pride has caused not only his own fall, but also possibly that of the bloated corporation he created. And who knows what the economic consequences will be. I fear that it will not be Prof. Winterkorn who will pay for his folly, but Volkswagen’s employees, shareholders and customers, and ultimately the people of Germany.

http://www.forbes.com/sites/francescoppola/2015/09/23/volkswagens-ceo-has-resigned-but-that-doesnt-solve-its-problems/2/

TEDxSaltLakeCity 2015

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This was my first TEDx event, and it was absolutely amazing. I heard from speakers in various industries, including bicycling, skiing, and medical. A complete list of the speakers is below.

One key takeaway was people need to transfer knowledge to other people and help one another succeed. An example given was the computer mouse. Not one person can make and sell the computer mouse, starting from raw materials, all the way to selling it to a customer. Our World has become so complex that relationships are pertinent for success. Helping one another allows for resources to be distributed properly and efficiently. Maximizing resource utilization leads to less waste (Six Sigma) and better improvements in all aspects of business (Kaizen).

Thank you Salt Lake City, for providing such an intriguing event and I hope to attend in the years to come as well.

Speakers (in alphabetical order by last name):

  1. Austen Allred
  2. Nate Bagley
  3. Erik Brunvand
  4. David Eyer Davis
  5. Ivy Estabrooke
  6. Ken Grover
  7. Thea Holcomb
  8. Kevin Jones
  9. Nalini Nadkarni
  10. Ben Rollins
  11. Nicole Roundy
  12. Hala Saleh
  13. David York

Macy’s, Inc. to Hire 85,000 Seasonal Associates in 2015

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Macy’s, Inc. today said it plans to hire seasonal associates for approximately 85,000 positions at its Macy’s and Bloomingdale’s stores, call centers, distribution centers and online fulfillment centers nationwide for the 2015 Christmas and holiday season. The company’s 2015 seasonal hiring plan is essentially flat to last year.

“Macy’s and Bloomingdale’s customers have come to appreciate the higher level of our staffing and service throughout the Christmas and holiday shopping season, and our associates love the employment and income-earning opportunities at this very special time of the year,” said Terry J. Lundgren, Macy’s, Inc. chairman and chief executive officer. “We first offer our current associates the opportunity to work extra hours over the holidays, then supplement our ongoing workforce with seasonal hires. This enhanced staffing allows us to provide additional help to customers, whether they are shopping in stores or online.”

Seasonal associates at Macy’s and Bloomingdale’s serve customers on the selling floor, work in store operations positions, interact with customers via call centers, and staff the distribution and fulfillment centers that coordinate shipments to stores and directly to customers who buy online or via mobile. Macy’s, Inc. is one of America’s largest online retailers.

Macy’s, Inc.’s 2015 seasonal hiring plan includes the following:

  • Approximately 12,000 of the 85,000 total seasonal positions will be based in direct-to-consumer fulfillment facilities that support sales generated by the company’s omnichannel business strategy. These positions are located in megacenters in Goodyear, AZ; Cheshire, CT; Tulsa, OK; Portland, TN, and Martinsburg, WV, and well as in product-specific fulfillment centers in Sacramento, CA, Stone Mountain, GA, Secaucus, NJ, and Joppa, MD.
  • About 1,600 associates will be hired to interact with customers via telephone, email and online chat at customer service centers in Mason, Ohio; Clearwater, FL; Tempe, AZ; and St. Louis, MO.
  • More than 1,000 persons will be hired across the country to support the 88th annual Macy’s Thanksgiving Day Parade, Santalands and other iconic holiday events.

“These seasonal positions represent much-needed jobs for America, and they fill an important niche in the employment spectrum. Especially at the holidays, we employ students working during break to help pay tuition, retirees seeking to remain active and individuals from many walks of life wanting to supplement their income. We are proud to offer them this opportunity to work in a fun, fast-paced and respectful environment,” Lundgren said.

Most seasonal positions are part-time, often with flexibility to fit the availability of the individuals hired. Many positions require the applicant to work evenings, weekends or overnight. In some cases, temporary seasonal associates are offered open year-round positions based on their skills and performance over the holiday season.

Applications for seasonal positions at Macy’s and Bloomingdale’s are being accepted at www.macysJOBS.com and www.bloomingdalesJOBS.com. Candidates who submit applications online will receive a response via email. Hiring for store sales positions will begin in mid-October. The company has already begun hiring for sales support positions, such as in distribution centers, call centers and store receiving.

“We have many examples of associates who started with us in temporary seasonal positions and stayed to enjoy a long and fulfilling career with our company. Seasonal employment is often an opportunity to get to know potential future employees and to identify talent that we can recruit as needs arise,” Lundgren said. “The holidays are a magical time of year, and helping customers select gifts from Macy’s and Bloomingdale’s is a special experience that generations of associates have enjoyed and found rewarding.”

Macy’s, Inc. employs about 166,900 associates on a year-round basis.

http://pressroom.macysinc.com/press.aspx?catid=0&pcatid=0&mkid=360&pid=17200

Toys ‘R’ Us Hiring Fewer Seasonal Workers, Target And Walmart Holding Steady. Will Service Suffer?

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The all-important holiday season is bearing down upon us. In just 10 short weeks, people all around the United States will be sitting around their Thanksgiving tables, in their living rooms watching football, scrolling through their tablets for bargains or waiting on lines at physical stores to buy the deals of the day.

In preparation for that holiday season, retailers traditionally staff up. They bring in seasonal workers to accommodate the rush, help with customers and re-stock shelves. This tends to happen over the month of October, so retailers have support to receive new merchandise, prepare signage and shelves, and be ready to help customers.

This morning, RetailWire published a piece on planned temporary staffing levels (Full disclosure: I am a RetailWire “brain trust” panelist, which means I contribute to its commentary often).

In the piece, we learned that Target is keeping temporary staffing levels consistent with last year – hiring 70,000 seasonal employees. For its part, Toys ‘R’ Us is actually reducing temporary staff from last year’s level, from 45,000 in 2014 to 40,000 this year.

Separately, it was reported that Walmart will keep seasonal hiring consistent with last year’s numbers as well – staying constant at 60,000 temporary workers.

All the companies mentioned in the piece said they were going to give their permanent workers more hours to take up the slack as well as giving more hours to the workers they do hire.

So this begs the question: will service levels remain the same, improve, or decline? I believe we’ll see a mixed bag. There are some real plusses to managing the workforce this way, and a couple of definite minuses.

First let’s look at the plusses.

Retailers are more willing to increase base pay of their existing workers than ever before. In fact, my company has data (free registration required) that indicates those whose year-over-year comparable sales – a key retail metric – outperform their peers have increased the ratio of payroll to sales in their companies. That means their payroll is growing at a faster rate than their sales are, and it drives even larger increases in sales.

What they’re not so willing to do is train them. In the same report I cited above, we found that 42% of retailers spend less than 10 hours PER YEAR training new in-store employees. The figure is even sadder for existing in-store employees – 59% of retailers spend less than 10 hours per year training them.

In that context, it makes sense to hire fewer new associates, especially if they’re not going to stay around. Better to save those few hours of payroll for other things.

Theoretically, service levels should remain the same. Knowledgeable store employees can provide far better service than those we’ve come to think of as “warm bodies” on the selling floor.

If those are the plusses, what are the minuses? Quite simply, it’s all about burnout.

Not all tasks in stores are about helping customers. Especially around the holiday season, there’s a tremendous amount of work that can only be called “thankless.” The commonly used term for the task is “recovery.” That’s what happens at the end of the selling day, after the doors have closed. At that time all the items that have been moved hither and yon around the store, onto floors and into dressing rooms and who knows where else have to be returned to their rightful locations. Customers expect to see clean, orderly stores when they arrive. The only time to make that happen is after hours.

Smart retailers will give the majority of these tasks to their seasonal workforce, but people are also needed to direct and supervise them. If those same workers have been working hard all day taking care of customers and doing cursory clean-up on the floor, they’re going to be tired. And that’s the risk retailers are running.

Tired workers are cranky workers. And cranky workers generally don’t provide the kind of service shoppers expect.

I don’t agree with the retail observer in RetailWire who said “Changes to the way consumers shop are making it possible for stores to meet increased demand with fewer extra workers.” In fact, I think just the opposite is true: changes to the education level of consumers make it impossible for retailers to meet demand without a strong staff of educated workers.

Retailers are taking the gamble that a well-trained workforce is better than a poorly trained one. They hope that just like workers are willing to take Thanksgiving Day shifts, staff might appreciate the extra money from longer hours in the run-up to the Christmas holiday. Will they succeed? A season is not the same as a day.

It’s a strategy that’s not without risk…and the sheer volume of consumer shopping choices raises the stakes. We’ll have to wait and see what we hear from exit interviews and how chain sales results pan out.

http://www.forbes.com/sites/paularosenblum/2015/09/17/toys-r-us-hiring-fewer-seasonal-workers-target-and-walmart-holding-steady-will-service-suffer/?utm_source=followingimmediate&utm_medium=email&utm_campaign=20150917

Why Donald Trump is Wrong About Macy’s CEO Pay

Donald Trump, president and chief executive officer of Trump Organization Inc. and 2016 Republican presidential candidate, during an interview on Bloomberg Television's "With All Due Respect" at the Trump Bar of the Trump Tower in New York, U.S., on Wednesday, Aug. 26, 2015. Trump said that he agrees the carried interest tax "loophole" should be eliminated and that it is "tremendous burden" on country's finances. Photographer: Michael Nagle/Bloomberg via Getty Images

The Donald has a new target.

Move over Fox News host Megyn Kelly: Donald Trump has a new target.

Macy’s M -1.19% CEO Terry Lundgren is the GOP presidential front-runner’s new punching bag.

In an interview over the weekend with CBS’s “Face the Nation” host John Dickerson, the Trump was asked about CEO pay – which Dickerson said is, on average, 350 times larger than the average worker’s compensation – and how that plays into inequality.

Trump responded by pointing out that CEOs stack their boards with allies that won’t stand in the way of high pay. He specifically called out one company: department store operator Macy’s. He went on to say that CEOs are making “enormous amounts of money and it is a complete joke.” A Macy’s representative wasn’t immediately available to comment on Trump’s statements.

It isn’t exactly a surprise that Lundgren generated Trump’s ire. Macy’s enraged Trump earlier this year when it announced it would phase out its Trump line of menswear after the Republican presidential candidate made derogatory comments about Mexican immigrants.

Trump’s attacks on Lundgren’s compensation, however, are completely unfounded.

Most of the compensation that Macy’s grants senior management is performance based and that means the company’s board, no matter how friendly it is to Lundgren, doesn’t have a direct hand in how much the executives are compensated.

For Lundgren, 87% of total direct compensation is through incentives that are tied to changes in stock price and other pre-determined performance objectives. The targets focus on sales, earnings before interest and taxes, and cash flow (roughly half is tied to Macy’s earnings performance).

Lundgren, CEO at Macy’s for 12 years, is certainly well paid. His total compensation totaled $16.5 million in fiscal 2014. But just $1.6 million of that was in salary (roughly flat with the prior two years). Most of the compensation was tied to stock and option awards.

Macy’s has performed very well under his watch, generating consistent gains in sales and profits. The top line has increased from $25 billion in 2010 to $28.1 billion last year, while adjusted earnings grew from $2.39 billion to $2.89 billion over the same period.

Macy’s stock has also performed well over the past several years, vastly outperforming the benchmark Standard & Poor’s 500 index, and the S&P retail index. A $100 investment in Macy’s at the end of January 2010 would be worth north of $400 five years later (including the reinvestment of dividends). Over that same period, the S&P 500 and retail index only grew to around $200 each.

To be fair, Macy’s is currently underperforming: Shares are off about 12% so far this year, lagging the S&P 500. Macy’s generated headlines recently when it announced plans to close 40 stores. But that more muted performance won’t be reflected into executive compensation until next year.

http://fortune.com/2015/09/14/trump-macys-ceo-pay/

Thursday Boot Company

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My MBA classmate brought to my attention this company out of New York City. I took a look at their website and watched their Kickstarter video. They took a workman’s boot and mixed it with a trendy, fashionable boot. What they came up with is a niche in a market. A space where others have not been, at this point in time. Entrepreneurship is intriguing and I hope this company makes it far in business.

http://thursdayboots.com/

Jos. A Bank Scaled Nack on the Main Reason People Shop There, and Sales Are Tanking

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Jos. A Bank has been scaling back on its massive discounts, and now sales are tanking.

The retailer’s “buy-one, get-several-free” deals on men’s suits, sport coats, sweaters, and more helped make Jos. A Bank a household name.

But Men’s Wearhouse, which acquired Jos. A Bank last year, recently began phasing out the promotions, saying they were no longer sustainable.

Jos. A Bank’s same-store sales fell 9.4% in the second quarter, compared to a 1% increase a year earlier.

Analysts say fewer promotions are largely to blame for the drop.

Jos. A Bank’s promotions ran so frequently that they became the butt of late-night TV jokes. But customers came to expect the deals, according to Neil Saunders, CEO of Conlumino, a retail-consulting firm.

“Moderating promotional activity is extremely difficult for Jos A. Bank, which has come to rely on highly generous offers (such as buy one, get three free) in order to drive customer traffic and [spending],” Saunders wrote in a recent research note.

The fact that Jos. A Bank has to rely on such drastic measures to attract customers is a clear sign that the brand is in need of a refresh, Saunders wrote.

To improve its appeal, Men’s Wearhouse has been introducing new clothing and shoes that are designed to attract younger customers to Jos. A Bank stores.

“It’s this focus on newness that will give us the best shot at winning a larger share of closet with existing customers and expanding our reach to new and younger customers,” Men’s Wearhouse CEO Doug Ewert said on an earnings call Wednesday.

“Bottom line: We need to give customers new reasons to shop at Joseph Bank and [give] our stores more ammunition to grow their business.”

Saunders says younger customers won’t save Jos. A Bank, however.

“Introducing Men’s Wearhouse product into Jos A. Bank stores is not the solution, especially as the audience for the latter is older and more conservative than the former,” he wrote.

Saunders said Jos. A Bank “will remain problematic” for Men’s Wearhouse going forward.

But Jos. A Bank won’t be returning to the “buy-one, get-seven-free” model any time soon.

“We know most men don’t want to buy suits four at a time,” Ewert said on the call Wednesday. “These promotional offers are not working for our customers, and they are not working for us.”

http://www.businessinsider.com/jos-a-bank-scaled-back-on-the-main-reason-people-shop-there-and-sales-are-tanking-2015-9

Investors Fret as Macy’s Launches Growth Ventures

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Macy’s is one of Cincinnati’s hardest-hit stocks after a month of market volatility, with shares down a bruising 20% from the all-time high it hit in mid-July.

The tumble snaps an almost seven-year winning streak as the Cincinnati-based retailer deftly navigated the Great Recession and its lingering aftermath that dragged down so many competitors.

But 2015 has proved to be choppy for Macy’s as it explored opportunities to take its growth to new heights.

Early this year, Macy’s bought a beauty and spa retailer. Then in May it announced the launch of an off-price concept called Macy’s Backstage. Last month it announced a joint venture to expand e-commerce into China.

Despite all the new initiatives, Macy’s delivered back-to-back first and second quarterly profit results that disappointed Wall Street. Also, during a summer that made Macy’s sweat, an activist investor loudly suggested the retailer consider selling or spinning off its real estate assets.

“Growing sales is where it all starts — if you can’t increase the top line, ultimately you won’t grow profits,” said Terry Kelly, principal with Bartlett & Co.

Last week, Macy’s opened the first four off-price stores in New York City. The retailer says it will open another two this year, then ramp up the number of stores in 2016.

Macy’s Backstage is shaping up to be a command performance as analysts eagerly await results.

What appears to have shaken investors is its growth prospects, which Macy’s started 2015 planning to address head-on.

In February, executives talked about the beginning of a “third phase” for Macy’s as it disclosed annual results for the 2014 fiscal year that ended Jan. 31.

The first two phases were: first, in 2005 when Macy’s doubled in size after buying out its largest rival, May Department Stores and second, in 2008 when Macy’s refined its integration strategy to boost stores performance and profitability.

Until this year, Macy’s had outperformed by maximizing its profitability, if not its sales. In 2014, Macy’s netted a $1.5 billion profit on $28.1 billion in sales, compared with the $995 million profit in 2007 when it did $27 billion in sales.

Macy’s latest venture to grow its overall sales, Macy’s Backstage, moves the retailer into off-price retailing, a faster-growing category populated by the likes of TJ Maxx and Ross Stores. Analysts note Macy’s rival Nordstrom has found renewed growth with its off-price chain, Nordstrom Rack, which has become a $3.2 billion chain itself.

Analysts say Macy’s Backstage could help groom the next generation of Macy’s shoppers with an appealing mix of less expensive merchandise. But the trick will be to not unwittingly encourage existing Macy’s customers to trade down.

“It’s a no-brainer for them: off-price is the fastest growing segment of the apparel industry, they need to be in,” said Howard Davidowitz, chairman of New York retail consulting firm Davidowitz & Associates. “TJ Maxx is the most successful apparel retailer of the last decade bar none.”

Davidowitz said off-price concepts have been the growth engines of rivals Saks and Nordstrom.

While Macy’s is getting into the segment later than the rivals, Davidowitz noted Macy’s existing network of suppliers should make it easier for the company to negotiate special lines of apparel for Backstage.

Meanwhile, Macy’s is also pursuing expansion of the Bluemercury specialty beauty and spa chain it bought in February for $200 million. The retailer says it will open another 10 free-standing stores by the end of the year, which will expand the total store count to 76. Macy’s will also open four Bluemercury stores within Macy’s locations by the busy holiday season as well as cross-sell its merchandise on macys.com.

Even as Macy’s presses ahead with constructing off-price and beauty stores, the retailer disclosed in August it is also hired real estate advisers to “intensely study its real estate portfolio to determine where opportunities exist.”

The examination came a month after a new Macy’s investor, hedge fund manager Jeffrey Smith, loudly suggested the retailer split off its real estate holdings into a separate company and then rent its properties from the new business. Smith’s Starboard Value bought 2.9 million shares or 0.8% of Macy’s in the spring, government disclosures show.

The theory behind such a move is it would be a bonanza gain for Macy’s shareholders and the retailer would free up money that’s tied up in real estate. Macy’s officials have resisted the move, saying there are advantages to owning stores and that each store is different.

But last month, the company also announced a deal to redevelop its Brooklyn store and sell half of its floors for $270 million to an office developer.

Macy’s sagging quarterly results and stock performance ironically come as the U.S. economy appears to be picking up steam.

Growing jobs and lower gas prices mean more discretionary income for American shoppers, normally a strong sign for consumer stocks such as Macy’s.

Still, Andy Stout, managing director of investments at Simply Money in Symmes Township, noted a hefty chunk of the strong 3.7% increase in U.S. gross domestic product came from inventory building — businesses restocking their warehouses in anticipation of more consumer spending.

“People don’t believe gas prices are going to stay down yet. They’re not spending their gas dividend,” Stout said. “Prices are going to have to stay down for a few more months before people change their habits.”

http://www.usatoday.com/story/money/business/2015/09/06/investors-fret-macys-launches-growth-ventures/71816760/

Will Backstage Save Macy’s?

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Macy’s M -1.51% debuted its new discount concept called Backstage last week, offering up a sneak peak of the department store chain’s off-price format. Is this a case of too little too late, or the end of the era?

Perhaps a little of both.

Macy’s Backstage is a discount outlet much like Nordstrom’s JWN -1.39%Rack, Off Fifth by Saks Fifth Ave and Neiman Marcus’ Last Call. It’s positioned to compete with off-price chains Kohl’s KSS -2.00%, Marshall’s and T.J. Maxx , retailers that continue to claim a growing portion of shopper’s apparel and home dollars.

It’s an edited down selection of apparel discounted from Macy’s department stores with the addition of some new names and merchandise. There are shopping carts and big dressing rooms with charging stations, something that should appeal to  younger shoppers, the very ones Macy’s has been courting with its marketing and mobile programs.

Making Macy’s cool with Millennials has been a difficult task for the retailer, something management openly acknowledges. Off-price retailers are popular with younger, value-oriented shoppers. They like a bargain and enjoy the treasure hunt-like experience.

Many have asked what took Macy’s so long to come up with the concept. Backstage could very well be too late, as fellow Forbes contributor Barbara Thau has pointed out.

But it also could be the idea that finally saves Macy’s from a doomed future as a mid-priced department store tied to the dying mid-priced mall.

At 30,000 sq. feet, the store is small enough to put in modern shopping centers alongside The Rack, Off Fifth and Marshall’s. It frees the retailer from the regional mall, and puts it right in the parking lot where its shoppers spend much of their time.

Macy’s has spent too much time trying to be upscale, and outside of the first few floors of the Herald Square flagship store in Manhattan, it’s an attempt that is sorely misplaced. Neiman Marcus and Nordstrom are better luxury retailers and the Macy’s-owned Bloomingdales banner is better suited to the task.

So why did it take Macy’s so long to come up with the concept? In many ways, management had a lot on its plate — absorbing acquisitions and creating the first truly national department store brand. So much of Macy’s operations were outdated that getting its existing house in order has been the priority.

And in that regard, Macy’s has done remarkably well, but improved performance-based store remodels, new brands and mobile marketing campaigns is nearing its end. Macy’s needs something more dramatic.

Hello Backstage.

Macy’s is testing these stores in the New York Metro area, not necessarily the best test for what plays in the rest of the country. It will have six in total there by the end of the year. But I suspect Macy’s has a pretty good idea as to how well these will translate to other markets. It’s already a time tested and very successful retail concept. One that should provide Macy’s with a formula that could save it from an otherwise dismal future tied to large, mall-based stores.

http://www.forbes.com/sites/lauraheller/2015/08/31/will-backstage-save-macys/

Back To School Roundup: Amazon Beats Walmart On Deals, With Target More Pricey

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The beginning of September is a frenzied time in retail aisles, with the last of the back-to-school deals fighting for space with Halloween costumes and — soon enough — holiday paraphernalia.

Each year, more parents turn to online shopping for their last-minute needs for the new school year, looking for great deals and fast shipping on stationery, clothes, shoes and electronics.

This year, e-commerce consultancy Profitero examined online prices for a white paper on shopping trends and found that Amazon beat out two if its biggest competitors, Walmart and Target TGT +2.60%, for back-to-school deals.

Profitero examined 3,849 of the exact same products with identical brands and barcodes across Amazon, Walmart and Target’s e-commerce sites on the same date (August 18th, around the annual peak for these purchases).

The company found that Amazon’s prices were a fraction lower — 1% — than Walmart’s. Target’s prices, meanwhile, were 25% higher then Walmart’s overall.

Profitero’s analysis found that 91% of the top-selling office supplies on these e-commerce sites were eligible for Amazon’s Prime membership program, which includes free shipping for a $99 annual fee.

Of the best-sellers across all three sites, shoppers chose household-name brands to fill their kids’ pencil cases: Scotch, Expo and Sharpie were the top-selling office products.

In the computer and accessories category, Amazon’s electronics ranked #1; Profitero found that the e-tailer’s Amazon Fire tablets have been hugely popular this back-to-school season. PC company Asus and gadget favoriteApple AAPL +4.46% rounded out the top three.

As for kids’ apparel, a brand the fashion-forward love to hate was the best-seller for both boys’ and girls’ shoes: Crocs.

The hardy plastic clogs have had something of a resurgence since little Prince George was photographed wearing them in June. Look for the company to feature on back-to-school shopping lists for years to come.

http://www.forbes.com/sites/clareoconnor/2015/09/02/back-to-school-roundup-amazon-beat-walmart-on-deals-with-target-more-pricey/?utm_source=followingimmediate&utm_medium=email&utm_campaign=20150902