It’s been another week with far more retail news than there is time in the day. Below, we break down some things you may have missed during the week, and what we’re still thinking about.
From Build-A-Bear NFTs to the start of the holiday season, here’s our closeout for the week.
What you may have missed
H&M mulls customer return fees as rising expenses, strong dollar hit profits
A pullback from Russia, higher freight costs, a strong U.S. dollar and wider macroeconomics in Europe and elsewhere are among the pressures squeezing H&M’s profits, CEO Helena Helmersson told analysts on Thursday. The fast-fashion retailer is responding with an expense overhaul that will likely improve the bottom line sometime in the second half of next year, executives said on the call, according to a Reuters transcript. The company is also experimenting with a policy unusual in apparel retail — charging customers for returns. H&M rival Zara has already gone that route, an effort to grapple with the high volume of returns endemic in e-commerce.
At H&M for now it’s just a trial run. “We are about to test return fees in a few of the markets to see the response from the customers. So let's see how they receive that,” Helmersson said, noting that even if it’s successful it would take time to implement. “It all depends on ... how it's received by the customer. So that's why we do a test to see if that is something to fast track.”
Toms names new CFO, COO
Shoemaker Toms has named Dorothy Sadd as its chief financial officer and chief operating officer, according to a report from Footwear News.
Sadd has previously served as VF Corp.’s vice president of Europe and comes with experience from brands like LVMH, Ralph Lauren, The North Face and Patagonia, according to Sadd’s LinkedIn profile.
Former CFO Martin Dunstheimer left his role at Toms to become the CFO at Boosted Commerce in June.
Beyond Yoga opens first permanent store
A year after Levi’s acquired Beyond Yoga, the brand is opening its first permanent store “with more locations on the horizon,” according to a company press release. The yoga company’s first store opened its doors on Wednesday in Santa Monica, California, after the company tested a pop-up at The Grove shopping center in Los Angeles. A store at Irvine Spectrum Center, also in California, is set to open later this year.
The 4,000-square-foot store will offer a mix of active and lifestyle merchandise, including sleepwear, maternity and the retailer’s men’s selection, which launched in 2019. Beyond Yoga is also partnering with six other “female companies” to showcase products in its stores, including Dagne Dover and Sundays. Starting Monday, shoppers will be able to make an appointment to visit the store, before which an associate will choose products for them to try based on purchase history.
“Expanding into retail is an exciting moment for the brand and we cannot wait to meet more of our customers in-person,” Michelle Wahler, co-founder and CEO of Beyond Yoga, said in a statement.
Build-A-Bear? More like Build-an-NFT
Get your wallets ready. Children’s stuffed animal company Build-A-Bear is auctioning off a non-fungible token beginning at the mere price of $2,500 starting on Tuesday at 12:00 p.m. ET.
The best part? The winner will receive a limited-edition stuffed bear decked out with Swarovski crystals and a red crystal heart, according to a company press release.
The release is in partnership with NFT platform Sweet, and it's part of a three-phase NFT release. The next two phases, happening in November and December, will feature another limited edition bear and a set of NFTs that each have randomly generated features, respectively.
Don’t say we didn’t warn you when your kid starts asking about this.
What we're still thinking about
That is the dizzying size of Bed Bath & Beyond’s sales decline in the second quarter. The retailer’s net loss also increased five times over to $366.2 million in the period. As is well known by now, the company is scrambling to right itself after a string of troubling quarters, with a new loan, a slate of planned store closures and layoffs, and the search for a new permanent chief after Mark Tritton left following last quarter, which also saw Bed Bath & Beyond hemorrhage sales.
That is nearly how much Amazon plans to spend on wage increases for frontline workers in its fulfillment and transportation operations. The hikes, set to begin in October, would raise Amazon’s average starting wage from $18 an hour to more than $19 an hour. One group of Amazon workers, based in California, said that the increase is not enough and has called for a $5 increase.
What we're watching
Economic uncertainty looms over the holiday season
Retailers are still staffing up for the holidays, though many have scaled back their hiring goals.
Will they be ready? With inflation-weary consumers intent on finding deals, the day after Halloween won’t mark the unofficial launch of the holiday retail season this year; at Amazon and Target gift guides are already out and both retailers have scheduled holiday sales events in early October.
As retail executives brace themselves for their customers to be profoundly budget-minded this year, many must also work through piles of unsold inventory that have amassed as consumers pulled back on discretionary spending. “I hesitate to call it a blood bath, but it’s going to be ugly in terms of the amount of discounting and markdowns,” Urban Outfitters CEO Richard Hayne told analysts last month.
Retailers are also grappling with higher prices, including holiday shipping surcharges. Still, as the back-to-school season showed, consumers are spending, according to research from The NPD Group. As of Sept. 17, year-to-date sales are 2% below last year, with demand only slightly lower and unit sales down 8%, per that report.
“[T]he consumer excitement to get into stores for the deal-hunting they have missed over the past two years is capable of sparking increased activity for retailers who create a sense of urgency around the more traditional peak days for in-store traffic,” Marshal Cohen, chief retail industry adviser for NPD, said in a statement.