We shopped the new prototype at Roosevelt Field. The new prototype was well-executed from a visual standpoint; however, we have reservations on its limited ability to drive incremental volume (sales per sq. foot). The new vestibule style frontage, limits their ability to make window presentations, creates approximately 150 sq. feet of under-productive floor space and reduces its ability to drive customers through its "power alley" (core presentations of highest volume items). The fixture packages were not as high-density as they should be and creates an overstock situation on the selling floor which in turn makes the stores less shopping friendly and creates sloppy presentations. The new prototype does have several advantages which creates personal connection with the customer similar to Lululemon, it is utilizing chalkboards with personal messages from store associates about the community. In addition, the new layout enhances their ability to make stronger denim presentations which we feel has been a key initiative for several years) and elevates the aesthetic of the brand.
Key Marketing Messages & Window Displays: Girl's Tops 50% off, Donations for local victims of Hurricane Sandy.
Power table: Girls tops 50% off. Thin sequin thermals. We noticed a move to widen the age divide between AE and AERO. Colored denim front focus wall is a bit too spring transitional in our opinion which they are promoting at 50% off.
Assortment Analysis: We were uninspired with AERO’s holiday offering as it continued to miss key trends interpreted for its core customer. We felt Aero was missing too many key trends such as printed jeans, Aztec/Navaho prints, winter shorts, metallic intertwines in the sweater category.in our opinion AERO poorly executed the woven category in plaids for men and women. The assortment was more balanced than in the past; however, we believe that it has shifted dollars from highly productive classifications such as hoodies, graphics to lower productivity categories such as denim and outerwear. This was being done for the sake of having a more balanced assortment. We believe AERO is having difficulty executing on several fronts and could stand to refocus the assortment on higher volume items .The color palette in many top categories missed trend. Overall, its presentations look disjointed and sloppy as it attempts to cram product onto shelves.
- Girls' Power Table: Showing women's assorted tops, including sequin thermals @ 50% off.
- Girl's Front Focus Wall: Plaids and hoodies (50-70% off).
- Guy's Power Table: Hoodies & Graphic Thermals (50-70% off).
- Guy's Front Focus Walls: Puffer Jackets and Plaids/Flannels.
Key Callouts: The store was very promotional running 50-70% off. We noticed several shifts in strategy including a reduction of key classifications, an expanded denim presentation and and a very misleading trend to higher IMUs.
- Graphics Assortment Significantly Reduced: Women's graphics were BOGO 2 free ($24.50 sticker price, or $8.17 a unit). The overall graphic assortment has been significantly reduced with less diversification than in the past. We noticed several of the same graphics in different colors, which with a BOGO 2 free promo, further reduces the number of available graphics. We did applaud it on its utilization of mixed media (screen prints and studs) which we thought looked quite good. Men's graphics (retailing at $12 per) looked stale with very little newness or evolution in the mix. The trend in men's graphics is moving toward increased sophistication and we are not seeing that here.
- Expanded Denim Presentation: Clear effort to expand denim classification, historically has been a small part of the business. For guys, slim boot, boot, and slim straight were featured and skinny, boot, flare, ultra skinny for girls.
- IMU Higher: We noticed original retail prices that were higher than American Eagle in some key outerwear and sweater styles; however, these are priced to sell and allows optically for deeper initial markdown percentage. Very misleading and tends to dilute the brand.
- Spring Transitional Product Pulled Forward: We believe AERO delivered several styles of spring transitional product early in an attempt to stimulate business. Normally, Aero transitions its floorset just before Christmas Eve.
American Eagle Outfitters
Key Marketing Messages & Window Displays: $10 "money" card when you buy any AE gift card. All jeans and sweaters $29.99 up. Windows focused on its "Wishing For" marketing campaign.
Assortment Analysis: Overall, the assortment looks strong. They have done a good job of filtering key trends through its major classifications such as printed denim, fair isle prints, Navaho/Aztec patterns, neon's. We especially liked its mix of eclectic global trends with core silhouettes, particularly its western shirt offering, embellished dresses and twist scarves . The assortment looked more sophisticated than in the past. The visual presentation continues to be much sharper than in the past, with clean and cohesive presentations; more of a "lifestyle" feel showcasing the assortment in its entirety. The assortment feels more complete than in recent seasons, well balanced by classification, cohesive and conducive to building UPT (Units per Transaction). Below are major presentations for men's and women's:
- Front table presentation: Mixing of eclectic global trends for girls including 2-tone cardigans ($44.95 price point) w/ neon and Navaho details, paired w/ skinny denim, (distressed treatment/light wash). We continue to notice lighter washes becoming more in favor; AE appears to be doing well with this product.
- Women's Denim presentation: Skinny/Jegging in both stretch and super stretch styles are the focus and are offered in 7 washes (pure indigo, black rinse, worn dark, tinted rinse, antique destroyed and light-destroyed). Denim was decentralized and broken up by fit throughout the store. AEO still does the best job of in-store marketing and communicating the fit details to its customer.
- Women's Front Focus Wall: Mix of western shirts, embellished dresses and twist scarves.
- Men's Front Focus Wall: Mix of plaids and denim (skinny and slim straight). Merchandised similar to J. Crew w/ multiple prints and patterns mixed together to add depth and "texture" to the presentation.
- Women's Key Drivers: We noticed several styles which seem to be out-performers including the dip-dyed/hombre style, low-tension cable knits ($54.95) , thin pinwale cords (presented on a talking table @ 49.50 in 5 colors), plaids/ westerns and thin woven scarves (printed and twist-tied) which appear to be helping build the UPT/ADS.
- Women's Key Promotions: In skinny denim and jeggings, we noticed several styles were "soft" marked down including tinted rinse and inky black indigo soft marked to $34.99 from $44.95 (22% discount). In slim boot fit, we noticed markdowns from $44.95 to $29.99. While most of the store remained free of any significant markdowns, we did notice several markdowns of roughly 30% in outerwear which appears to have been a tough classification for most thus far.
- Men's Key Drivers: Plaids continue to drive the business but we are noticing slimmer details particularly on the collars and plackets with lighter weight woven styles replacing heavier flannels. Slim straight denim appears to be outperforming. Horizontal striped sweaters and work wear inspired outerwear also seem to be turning quickly.
- Men's Key Promotions: Outerwear again seemed tough for men. Its lightweight puffer jacket was marked down from $79.95 to $59.99 (all 3 colors) and we noticed similar markdowns in its Utility jackets. Hoodies were discounted to $24.99 from $29.99, though this appears to be a planned promotion on a solid key item.
- Cross-Branded Items: We noticed an elevated profile of cross-branded items including shoes by Clark's for men.
Assortment Analysis: The overall assortment looked good, though we felt the certain product presentations could have been sharper. We particularly liked the cropped cable sweaters (focus item, great price @ $39.50), the over-sized low-tension cable sweaters paired with winter denim shorts and the metallic interlace sweaters (solid interpretation of trend for its customer). The overall color palette was strong and trend-right, particularly in sweaters, hoodies and active bottoms. The men’s zone was quite strong, with plaids driving the business. We felt its opening presentation of tees was too commodity driven, particularly given the exciting elements within the assortment (nylon jackets, thermal lined hoodies). On a style by style basis, the assortment looked great hitting on most key trends; however, the presentations felt disjointed .We noticed strong mannequins presentation but could not locate the associated product. A big miss!
Key Callouts: Overall, we thought the assortment was well-positioned for Holiday and the price/value equation was among the very best in the mall. Below are our major callouts:
- Denim Presentation Strong, In-Store Marketing Could Improve: Jegging, skinny and super skinny styles looked great at $45 with good back pocket treatments. One of the things Hollister could do to improve this business is to have clearer, more communicative in-store marketing. Hollister has very little information on the fit, rise, cut, etc. for its customer.
- Best Active bottoms presentation in the mall: Cropped and skinny with classic detailing, colors and appliqué detailing trend right. We look for the college short to be a major trend for spring and an extension of this category.
- Women's assortment -missing a great western shirt, some interpretation of printed denim and woven printed scarves. The men's assortment could benefit from some newness in graphics including an increase in printed styles, lighter weight crew-neck styles.
Abercrombie & Fitch
Key Marketing Message: Clear marketing message, sweaters and jeans up to 50% off.
Assortment Analysis: Overall, the assortment looked great. In women's, we believe ANF interpreted all major trends for its customer. We particularly like the metallic infused sweaters (front-and-center), lace skirt, denim shorts and denim shirt. We also felt the plaid presentation were great, with a toned-down color palette vs. Hollister. The printed denim looks great along with the low-tension cable sweaters. Lace tops look good (though we would like to note that it did not have a 4-way stretch to it.). Men's also looks strong, particularly in outerwear and over shirt styles (an emerging trend for men's, especially the thick circular ribbed trim detailing).
Key Callouts: The overall assortment and presentation received very high marks and we believe it is well-positioned to drive business for holiday. Having said that, we would like to call out a few things:
- Women's | We believe ANF could drive higher AUR if it made more "outfit" driven presentations on key talking tables. We noted strong individual items; however, we believe if low-tension sweaters (see through) and camis were presented together, it could work to drive multiple item purchases.
- Mens' | We were less effusive about the men's assortment relative to women's. We believe the utilization of space in men's could be better, particularly as ANF is displaying low AUR items like boxers ($19.50) on focus wall and are being allocated too much presentation space. Plaids were strong, though we believe it could benefit from having more woven style plaids with slimmer details. We were extremely impressed with the men's outerwear presentation, which we viewed as among the best in the mall. Tee shirt assortment could be better and needs some new newness. Great graphics coming out of the high-end street wear market right now with brands like Commune and Howe leading the way.
Key Marketing Message: "Share" Gifts in Every Color
Assortment Analysis: Strong price driven signage which highlighted key items. Statements very disjointed with very little differentiation in terms of fabrications and very little texture to sweaters. The color palette is too bright, misses the mark and is disappointing because Gap has done color well for the Holidays in the past. One bright spot was the soft color palette for denim and jeggings. In fact, all of its denim appears to be doing well and is anchoring the business at the moment. Under assorted in non-winter accessories.
- Women's Front table presentation: focused in thin sweaters (color blocked sequin sweater). Signage done by color "share green, share red, etc".
- Denim presentation: Strong for women's and men's, both areas seem to be driving the business at the moment.
- Difficulty building presentations in key classifications: We found the overall assortment to be disjointed, with little cohesiveness. It seems that Gap is having a difficult time building definitive statements within the overall assortment. We think Gap could benefit from pulling its denim presentation forward and building around sweaters and cold weather accessories to give it more of a lifestyle feel.
- Good price point at $15 on hats gloves and scarves.
- Men's uninspired, muted color palette, very poor job building out key presentations.
Key Marketing Message: Strong marketing message upfront featuring camis BOGO 50% off, slub V-neck tops @ $39.90 and colored denim @ $49.90.
Assortment Analysis: Express was hit-and-miss. We thought it did a good job with colored denim and key top styles for its customers including the mesh dolman style sweaters and metallic interweave tops w/ ruche details (which offered a different take on a trend for its core customer). Faux fur outerwear did not appear to be moving well. Cocktail attire looks strong with matte sequin details a nice touch, though it needs more junk sequins and beaded sequin detailing. We felt this is most heavily shopped area of the store. There was a strong Solid floral prints in both tops and dresses but we feel it needs to be expanded. Core work wear pants and blazer performing well particularly in the Editor/Columnist pants..
- Women's Front-and-Center: Colored denim, 6 colors @ $49.90.
- Focus Presentations: Cocktail attire for holiday & workwear items.
Key Callouts: The overall assortment looked good, though we noticed a fair amount of potential fashion liabilities. We would call out the following:
- Women's Denim: The product was mixed in the back of the store and we believe it could have been better presented upfront and shown with some of its dolman sweaters and core basics.
- Promotions: We thought Express could have done a better job with 2-Fer promotions and cascading price points. We saw little usage of special incentives to drive multiple item purchases.
- Cocktail Attire: This was by far the busiest and most heavily shopped area of the store and we believe it could expand this category as it moves forward for several reasons: 1) The execution was great, with a good balance of sequins, lace, dress lengths. 2) This is a point of differentiation for it relative to several other mall-based specialty retailers, particularly at this price point. 3) There is an opportunity to add junk sequin and beaded styles to elevate the fashion element and create some newness in the category.
Key Marketing Message: Denim BOGO 50% off, sweaters BOGO 50% off.
Assortment Analysis: The assortment was mixed, as it touched on all key trends even showing some fashion leadership in the space but poorly executed several of them. The washed plaids offered a differentiated take on classification for women; however missed the mark on color. Women's lace looks good, has stretch added into it. Faux motorcycle leather jackets, good price point--emerging trend on west coast. A solid outerwear presentation. They should do better job with in store marketing. Nice denim presentation (Coates denim, Aztec prints, acid washed), floral and prints. Good interpretation of trends for women's, cardigans. Men's was solid with good Fair Isle sweaters, which were offset by weakness in plaids. We liked the lightweight outerwear. Graphics are sophisticated, exactly on trend
Key Callouts: Overall, the assortment is improving. A couple key things:
- Front-and-Center Presentation: Floral and paint splatter denim up front.
- Men's and Women's Graphics Among the Best in the Mall: Pacific Sunwear has a sophisticated graphic assortment and the trend continues to move in this direction. I am impressed by the fashion leadership in this category.The trend continues to be lightweight crew-necks, single media graphics (mostly traditional silk screens) with an artistic twist.