In a good sign for retailers, the National Retail Federation today now expects holiday retail sales to rise 3.8 percent to $469.1 billion, a full percentage point higher than its previous estimate of 2.8 percent.
The group cited a strong Black Friday weekend, led by midnight openings on the day after Thanksgiving, along with indications consumers still have plenty of gift buying to do as Christmas quickly approaches.
“Consumer spending this holiday season has surpassed expectations, though many shoppers continue to stick to their budgets and buy only what they need,” said NRF Chief Economist Jack Kleinhenz.
If the NRF's prediction holds true (the group's forecasts tend to lean a bit on the optimistic side), one wonders how retailers would've fared had there been no Internet or Black Friday midnight openings.
Just some food for thought.
As a rule, I generally don't like to work during vacation (not really a rule, more like a law). But earlier this week, I was walking through downtown San Francisco with a friend and saw this:
Yes folks, that's one of Target Corp.'s new CityTarget formats, set to open next year in San Francisco, Chicago, Seattle, and Los Angeles. The smaller stores, which focus more on everyday essentials, are about 60,000 to 100,000 square feet, compared to the usual 125,000 to 180,000 square foot big box locations.
CityTarget is one of the retailer's key strategies to boost growth, especially as online/mobile sales chip away at big box dominance. The smaller locations also allow retailers like Target and Wal-Mart to penetrate dense, urban markets where real estate is limited and local resistance to big boxes runs high.
In this particular case, Target chose its spot well. The store is located at 4th Street and Mission, near Union Square, a hot bed of retail and pedestrian traffic. Walk a few blocks and you'll find top tier retailers like Macy's, Nordstrom, Coach and Tiffany's.
I kind of wondered how Target managed to convince liberal San Francisco to approve its project.
Again, location matters. Target is building its store on the second floor of the Metreon complex, which has been hurting for tenants ever since Sony pulled out of the building five years ago.
Before Apple conquered retail, there was Sony's "Urban Entertainment Center," a massive real estate development dedicated to all things Sony. in 1999, the company opened such a concept in this location, a four story, 350,000 square building that offered dining, exhibitions, music, retail, and movies.
The concept failed to take off and Sony sold Metreon to mall developer Westfield Properties. Today, only an AMC IMAX movie theater and two restaurants remain at the location.
A shiny mutli-story Apple Store sits just a few blocks away, a reminder of how Apple succeeded where Sony failed. And just because we can't have enough irony in life, the Apple Store was led by Ron Johnson, who used to work at..you guessed it...Target.
Struggling women's apparel retailer Christopher & Banks Corp. said Tuesday that it will close its store in Albert Lea and convert its Roseville location into one of its new Christopher & Banks/CJ Banks "dual format" stores.
The Plymouth-based company also said it will close 69 stores across the country by the end of January 2012 and convert 25 locations into its dual format concept.
Earlier this month, Christopher & Banks said it will close 100 stores and that it had laid off fewer than 25 employees from its corporate headquarters and store operations.
The company is also seeking to restructure its remaining leases. Overall, Christopher & Banks will take a $5 million to $7 million charge related to employee severance costs and terminating leases.
Coming off a disastrous fiscal 2011, when the company lost $22.2 million, its worst annual loss, the company had high hopes for a recovery based on a renewed focus on merchandising.
However, Christopher & Banks' new clothing lines have gotten off to a shaky start. CEO Larry Barenbaum said the retailer "overengineered" its apparel lines and priced the clothing too high.
For the first half of fiscal 2012, the company said sales dropped 3.2 percent to $220.1 million compared to the same period a year ago. Sales at stores open for at least a year, a key way to measure retail growth, declined 5 percent.
With just one store closing in Minnesota, it appears Christopher & Banks believes its home state offers one of its best chances at survival. By the end of the restructuring, the retailer will operate 680 stores in 44 states, including 45 in Minnesota.
When Target, the Mall of America, and Best Buy said they will open at midnight on Black Friday, I was a bit dumbstruck.
"Where else is there left to go on Black Friday?" I told a colleague. "You can't really go any earlier than 12 a.m."
Unless you start Thursday.
Acting on cue, Wal-Mart Stores said Thursday it will open its toys, home, and apparel departments at 10 p.m. on Thanksgiving, thereby upping the ante on retail crazy.
"Our customers told us they would rather stay up late to shop than get up early, so we're going to hold special events on Thanksgiving and Black Friday," Wal-Mart chief merchandising officer for U.S. stores Duncan Mac Naughton said in a statement.
There's actually some logic, perverse though it may be, in Mac Naughton's reasoning. As the unlucky retail reporter who has to cover Black Friday, I suppose it would be much easier to stay up to 10 p.m. on Thursday night than drag my butt out of bed before sunrise on Friday morning.
Come to think of it, maybe Congress should pass a law officially moving Black Friday to the Friday before Thanksgiving.
Or better yet, just move Thanksgiving back a week.
I'm sure the pilgrims won't mind.
Best Buy Co. Inc. said Friday that it will open its stores at midnight on the day after Thanksgiving.
The Richfield-based consumer electronics giant joins Target Corp. and nearly 100 retailers at the Mall of America in trying to get a jump start on Black Friday, the traditional start to the holiday shopping season.
Wary of high unemployment, shaky consumer confidence, and weak economic growth, retailers are trying everything they can to boost holiday-related sales, which can account for up to two thirds of annual sales.
“Black Friday is just the beginning,” Best Buy chief marketing officer Barry Judge said in a statement. “This commitment will come to life throughout the holiday season in a variety of offers and initiatives that give customers great values and the most convenient ways to shop for everyone on their list.”
It was a travesty. An outrage. Blasphemy!
In 2006, the Mall of America did the unthinkable: it parted ways with Camp Snoopy after failing to reach a new licensing deal for the Peanuts characters. (Cedar Fair, a Sandusky, Ohio-based company that operates seven theme parks nationwide, owns the exclusive right to use "Peanuts" characters at its U.S. theme parks under an arrangement with United Media, the New York licensing and syndication agency for "Peanuts.")
Aside from being a popular tourist fixture at the MOA since the mall first opened in 1992, Camp Snoopy held special emotional resonance in the Twin Cities. Peanuts creator Charles Schulz was born in Minneapolis and grew up in St. Paul.
Today, Camp Snoopy seems but a distant memory, at least in the eyes of the MOA. Its replacement, Nickelodeon Universe, is averaging about 8.5 million rides a year, about 600,000 more than Camp Snoopy. MOA officials credit Nickelodeon for helping to boost traffic throughout the mall, a crucial factor in the 9.4 percent sales gain MOA posted through August.
But it was pretty dicey back five years ago. Getting rid of Camp Snoopy carried enormous risk of customer backlash.
"We're not too happy about it," Barbara Harper of Eagan told the Star Tribune in 2007. "It's a sad situation, really. It's something great for children, and with the Charles Schulz connection, it's a legacy. It's too bad we're going to lose that."
Officially, the MOA said it wanted to bring Camp Snoopy back but the financials did not add up. In hindsight though, mall officials say Peanuts, for all of its institutional value, was a tired property frozen in time and didn't offer many opportunities to expand or creatively stretch. For example, it wasn't as if you could introduce a new character. Charlie Brown, Lucy, Linus, and Snoopy were pretty much what you had to work with.
"I thought there would be far more backlash than there was," said Maureen Bausch, the mall's executive vice president for business development. "It’s a little bit of a lethargic brand. Like I Love Lucy or Happy Days. It’s a brand that could not be continuously renewed."
Bausch said kids were only associating Peanuts with the Mall of America.
"You want them to see [the characters] in the media and know that they can touch it at your facility," she said. "You don’t want to generate all of the awareness for that brand. It was time for a change."
Problem was, no one wanted to immediately follow Camp Snoopy. So the mall just renamed the park a bland "The Park at MOA" for two years. It was the "brand you love to hate," Bausch laughed.
(Interestingly enough, the mall still averaged about 7.6 million rides a year, not too bad considering it had no identity.)
"That gave us a window when Nickelodeon came in, they didn’t want to seem they were pushing [Camp Snoopy] out," Bausch said.
Today, Nickelodeon is basic cable's top total day network with kids ages 2 to 11 and total viewers, thanks to a steady pipeline of popular programming featuring characters, both animated and live action, like SpongeBob SquarePants, iCarly, and Dora the Explorer. The network is averaging more than two million total viewers, according to Nielsen Media Research.
iCarly is the number one program on TV with all kids and tweens, SpongeBob is the top animated series with kids, and Dora is the top preschool series. Viacom, which owns Nickelodeon, also recently acquired Teenage Mutant Ninja Turtles and Beatrix Potter.
"Nickelodeon is a great business, a great brand, has a lot of opportunity to grow," Viacom CEO Philippe Dauman recently told analysts. "It's sharpened its programming orientation. Nickelodeon is going to have 500 original shows during the next year, which is the highest level it's had. The record is outstanding."
As a result, Nickelodeon Universe at MOA can tap a vast reservoir of characters and creative talent to constantly update rides and programming.
Peanuts may have a lock on the past. But it seems that Nickelodeon has a lock on the future.