The current retail turmoil and uncertainty isn’t stopping companies from growing and experimenting with new concepts, brands and reach.
Stage closes Gordmans deal
Stage Stores has announced it has closed the planned acquisition of select Gordmans assets. The company has committed to keeping 50 locations open with the option of assuming leases for seven additional stores as well as a distribution center. The acquisition also includes Gordmans trademarks and other intellectual property.
“Gordmans is well-positioned in Midwestern markets with a strong brand, a loyal customer base, and a significant opportunity to benefit from growth in the off-price segment,” Michael Glazer, president and chief executive officer of Stage. “We look forward to serving Gordmans’ customers by bringing them great values and providing an engaging shopping experience. We see the opportunity for both Stage and Gordmans to benefit from sharing best practices given the complementary strengths of each of the business models.”
Stage Stores expects to pay $35 million to $40 million for inventory, pending an assessment of the current stock, plus $2 million to $3 million for additional assets. The transaction will be funded by cash and an existing credit facility.
The company is focused on getting the stores fully stocked and ready for the holiday sales period. Between now and then, Stage anticipates that the Gordmans locations will see reduced sales as a result of reduced inventory. The transaction is expected to yield $230 million to $245 million in revenue in fiscal 2017. Next year, the company anticipates the acquisition to boost earnings significantly.
“We believe this acquisition strengthens our entire portfolio and will enable us to drive improved performance, resulting in greater shareholder value through positive earnings and cash flow,” Glazer said.
Sears Canada launches off-price concept, private label brand
Sears Canada unveiled a new off-price concept and private-label assortment at a pop-up shop in Toronto over the weekend. Dubbed #WeveCHANGED, the location serves to underscore the company’s new direction.
With these launches, the retailer is making good on its plans for a “Sears Canada 2.0,” which was hinted at in March 2016.
The new private label collection, which is available at all doors, touches just about every department in the store and promises quality essentials at affordable prices. The retailer has also debuted a fast fashion offering designed with 20 to 30-year-olds in mind.
Sears Canada’s off-price initiative, The Cut @ Sears, was soft launched inside full-line stores and features name-brand apparel and home décor at 30 to 60 percent off.
“Off-price retail is a hot trend across Canada,” says Brandon G. Stranzl, executive chairman, Sears Canada. “It allows us to extend our mandate to provide customers some of the best known designer brands in the world at the most affordable prices.”
While The Cut @ Sears is located inside the regular stores, the company has assigned a dedicated buying team to source product, which is refreshed on a weekly basis.
With these changes, the company has dubbed 2017 “the year of change.” Stranzl said in addition to the new products, shoppers should expect an enhanced customer experience.
Abercrombie extends online reach in Asia
Teen retailer Abercrombie & Fitch has entered into a wholesale agreement with Zalora, a leading online fashion retailer in Asia.
“We are looking forward to partnering with Zalora to build on our strong base of loyal customers across Southeast Asia,” said Fran Horowitz, chief executive officer of Abercrombie & Fitch Co. “We work hard to connect with customers wherever, whenever, and however they prefer to shop and we continue to invest in relationships and innovation to support that.”
Zalora will start selling both Hollister and Abercrombie brands this month. The e-tailer operates in 11 countries, including Singapore, Indonesia, Hong Kong and Taiwan and boasts 600 million customers thanks to perks like three-hour deliveries and liberal return policies.