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Luxury stores finding success in scarcity

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The New York Times reports today on Saks Fifth Avenue and Neiman Marcus's newfound success with intentionally low inventory. The retailers cut order sizes to manage cash flow and expectation; they then spun this as a "get it or it's gone" angle that has led to full sell-through on numerous high-ticket items.

Scarcity as a luxury concept is not new, of course; just days ago the Economist reported on Jean-Claude Biver's success selling watches in the same manner. (Story headline: "Salesman of the irrational.") The retail industry will be watching closely whether this trend holds through Christmas, and if Saks and Neiman can lead a sea change away from deep discounting as the recession starts to ebb.

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October retail sales creating optimism

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Retailers are finalizing October sales reports, and the buzzword around them is momentum. Shoppers appear to be regaining an interest in spending, and aggressive cost-cutting tactics by retailers have given way to pop-up stores and healthier vendor agreements.

Timely Demise is sensing, rather pleasantly, that perhaps its moment has passed.

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BusinessWeek on retail

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BusinessWeek published a robust special report last week entited How We Buy. It's full of insight into the modern shopping mechanism and how our attitudes, and options, are changing with the times.

Among the articles are pieces covering both how consumers' mindsets have changed and retailers' efforts to adjust to the "new normal." Brand-centric articles focus on companies from Gucci to Facebook.

The whole report is a great read for people working or interested in the retail arena.

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The rise of pop-up stores

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They're old news in the business community, but the widespread growth of pop-up stores is becoming an important consumer trend this fall. The Los Angeles Times gave them a closer look this weekend, noting how the stores are "filling in the gaps at recession-battered shopping centers" and giving both shoppers and retailers intriguing retail options.

The concept of pop-up stores is not new. The New York Times reported on pop-ups in Europe five years ago this week, and stores with Christmas or Halloween themes thrive on such setups annually. But the concept has gone mass this year, and watching the stores' impact on shopping styles in 2010 will be interesting.

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All quiet on the retail front

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Kind of nice, isn't it: Timely Demise has had almost nothing to say for a week.

Could it be "the beginning of the end of the recession?" The slow summer news cycle? Executives on vacation?

This writer believes it has more to do with the economy taking a well-deserved summertime nap than any macro-level trends--just because the stock market bounced doesn't mean America still isn't facing a workforce that's 20% underemployed.

In any case, Timely Demise owns a sister website that will launch once good news starts to eclipse bad. And if that takes awhile, TD will be sure to note it. Keep your tips and thoughts coming.

Whatever may happen, this blog is content to not have much to say. The break, while not a compelling read, is refreshing. We'll see what happens next week.

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Is retail starting to make its comeback?

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Consumers may be skittish with their spending of late, but that's not stopping retailers from keeping on the keepin' on. According to a report from RBC Capital Markets on Forbes.com, the retail business may be stabilizing. Analyst Rich Moore's July prediction of 64,925 new store openings in the next two years is a mere .02% below his May announcement of 65,000. That's a surprisingly positive sign when compared to his January prediction of 69,000 store openings, a January-to-May drop of 5.9%.

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Storefront vacancies

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In New York City, storefronts in Manhattan have hit their highest vacancy rates since 2001. Citywide, the vacancies stand at 12.4 percent; on some important shopping lanes, like tony Madison Avenue, the rate is more than 15%. (This author rode up Madison Avenue in a cab recently and spotted more than one empty storefront per block.)

Experts estimate rents may fall as much as 23% by the end of next year. Which, while bad for real estate companies, presents a bargain opportunity for retailers ready to capitalize toward the end of the recession.

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Retailers finding focus

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As has been noted here on and off, retailers are focusing on their core brands in order to maximize profitability in the recession. Reuters covers this trend with an overview of many brands finding this new focus: Abercrombie, Talbots, Finish Line and others have sold or closed brands to strengthen their main offerings.

Wisely, the Reuters article notes that this may lead to innovation and new energy within the sector. "Retailers are finally realizing that they have to get their own personality back," says NPD chief industry analyst Marshal Cohen in the piece. "They are beginning to recognize 'you know what, we have to go back to who our core customer is and deliver on the promise.'"

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Luxury stores cutting orders

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Luxury and specialty stores nationwide are reducing the amount of items they order to balance their inventories--and expectations--post-financial crisis.

Steven Sadlove, CEO of Saks, refers to "enormous excess" as driving sales in 2008, and tells shoppers to expect "less of the sizes, less of the availability in almost all of the categories." Saks Fifth Avenue and Neiman Marcus cut orders 20 and 25 percent this quarter, respectively.

This author's wife has noticed a similar trend on a local level--the shoe stores in our neighborhood are stocking much less merchandise than last year, most likely in anticipation of lower volume.

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Albertsons lowering prices

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Supermarket chain Albertsons is announcing a shift in prices to retain customers who have been shopping at discount stores. The program, called the Big Relief Price Cut, lowers prices throughout the store at 222 Albertsons locations in California. The move is designed not only to counter the discounters, but to keep up with competitors like Vons and Ralphs, who have already moved to push prices down.

(As an aside, what's with the California grocery scene that no one uses apostrophes? Albertsons, Vons, Ralphs--can't anyone use the possessive anymore?)

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Timely Demise tracks the retail industry as it changes with our unprecedented economic environment. Published by David Wertheimer. Did I miss something? Drop me a line.

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