Friday, December 21, 2012

StoreIntel Research: Dec 18th Mall Walk

We had an intensive mall walk on December 18th, and found some very encouraging signs that business at retail is actually improving. While the street is feeling a lot of negativity towards the holiday season in general, we are contrarians to this theory. We focused our energy on the following retailers:

  • Old Navy and The Gap - Our multiple store visits resulted in a very positive feeling towards both of these chains. Old Navy promoted at 30% off last weekend, which in certain locations was a resounding success. Many of the people we spoke with commented that promotions ahead of Christmas pulled in a tremendous amount of business. In fact, at certain locations, but not all, Old Navy said the weekend in total was a larger volume weekend than Black Friday! We also focused our attention towards cold weather product at both The Gap and Old Navy, and in our opinion felt there was very little liability. Gap moved from price point promotions 2 weeks ago to a more aggressive model of running the entire store at up to 50% off. Their inventory was clean, product was trend right and we are very excited about their business.
  • Aeropostale - This was the single most disappointing name. Lack of fashion, too many basics in categories such as logo t’s and hoodies gives the appearance of a tired retailer. Many of the stores commented on the lack of fashion items, which when in stock are selling quite well. In fact, at some of their "A" locations we were surprised by the lack of newness. The question is then, did the store allocators not execute the correct flow of newness in their highest volume stores. Stay tuned...
  • Abercrombie & Fitch - At both Hollister and Abercrombie, we felt inventories were in a good place - not much clearance in either store, and best in class as far as fashion and newness. We are looking forward to seeing their spring collection next both stores.
  • American Eagle Outfitters - Very strong overall - 40% off with the exception of jeans shows strength in their business. Fashion items delivered this week are quite strong, and we love the merchandising displays which entice multiple sales in many different product categories.
  • Kohl's - We are impressed with the pace of business witnessed at multiple store locations, and we don't see any inventory issues as it relates to cold-weather product. Knowing the importance of this coming weekend, we are looking for strong results. Coming off a weak November, we think a strong comeback is a good possibility.

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