The Weekly Closeout: Layoffs at Walgreens and what would it mean if Nordstrom went private?
It’s been another week with far more retail news than there is time in the day. Below, we break down some things you may have missed during the week, and what we’re still thinking about.
From L.L. Bean’s 2023 sales decline to Ikea’s new plant-based hot dog, here’s our closeout for the week.
What you may have missed
Guitar Center names chief merchandising and marketing officer
On Tuesday, musical instrument retailer Guitar Center announced that Kristin Shane is the company’s new executive vice president and chief merchandising and marketing officer. Shane will be responsible for product, promotions, visual merchandising, omnichannel experience and activations. Her new position is effective immediately.
Shane joins Guitar Center from PetSmart, where she was a senior vice president and chief merchandising officer. She also previously was merchandise manager for beauty and personal care at Target.
“My goal is to ensure that every interaction with Guitar Center is not just inspiring but also deeply resonates with our customers’ passion for music, setting new standards in retail excellence and customer satisfaction,” Shane said in an announcement.
Shane will report to CEO Gabe Dalporto, who took over the top spot late last year.
L.L. Bean faces second year of declines in 2023
Sales at outdoor retailer L.L. Bean were “down slightly” in 2023, according to a press release emailed to Retail Dive. The retailer’s net revenue, which landed at $1.7 billion, was down about 5.6% based on the $1.8 billion L.L. Bean reported last year. Last year’s figures were down 1% year over year. As a private company, L.L. Bean isn’t required to release detailed financial data.
The result, which led to L.L. Bean’s third highest revenue mark, was good enough that the outdoor retailer granted its 5,600 employees a 9% bonus, 4% of which was a 401(k) contribution. Outerwear, sweaters and denim were all growth categories, and the retailer’s “Boat and Tote” bags — which drive the most new customers — grew demand by 31%.
“2023 was a challenging year across the outdoor specialty retail industry, and we were not immune to the headwinds,” L.L. Bean CEO Stephen Smith said in a statement. “However, we are encouraged by the return on our omnichannel investments and the momentum that has created.”
Last year, L.L. Bean opened four stores in North America, launched a French language e-commerce site aimed at Canadian shoppers and added its products to more than 100 new storefronts and e-commerce sites. Among the retailer’s new wholesale partnerships are Academy Sports and Outdoors, Dillard’s and Moosejaw.
Walgreens closes two distribution centers, impacting hundreds of employees
Walgreens on Sunday closed two distribution centers — one in Orlando, Florida, and the other in Dayville, Connecticut — impacting a total of 646 employees.
“As Walgreens continues to work on solutions to help build business momentum and improve the efficiency of our operations, we have looked closely at our distribution center network, streamlining capacities wherever possible to best support our stores,” the company wrote in letters to both states as part of the Worker Adjustment and Retraining Notification Act.
The company last fall paused on plans to expand micro-fulfillment centers and last summer closed an e-commerce distribution center in Illinois. Also last summer the company said it would close 150 stores in the U.S. and 300 in the U.K. as part of a cost-cutting effort that targets at least $800 million in savings this year.
Retail therapy
Hi-Chew wants to save chocolate bunnies this Easter
This Easter season, Hi-Chew is promoting its “Save a Chocolate Bunny, Eat Hi-Chew” campaign and its newest seasonal product, the Hi-Chew Bites Easter Egg. Hi-Chew Easter bunnies took to the neighborhoods of Manhattan on Tuesday to hand out classic Easter eggs filled with its candy to spread the campaign, according to a company press release.
Through March 25, Hi-Chew is giving up to 1,000 customers samples of the new candy and limited edition campaign merch, upon signing an online pledge to save the chocolate bunnies this season.
Ikea to host baby shower for the U.S. arrival of plant-based hot dogs
Ikea’s plant-based version of its store cafeteria hot dog is now available in the U.S., according to a Tuesday press release sent to Retail Dive. The Plant Dog is made with rice protein, onion, apple, salt, pepper and a smokiness to give it a balanced taste and characteristic sausage flavor.
To celebrate the food’s arrival, Ikea U.S.will host a Plant Dog Baby Shower-themed event at stores on April 11 from 4-8 p.m. The in-store event will allow shoppers to sample the plant-based hot dog, play games and more.
The Ikea Plant Dog is at stores for 70 cents. The retailer also lowered the price of its veggie dog to 65 cents and its regular hot dog at 75 cents. The company said it is committed to plant-based foods being priced at the same or lower than its meat-based alternatives, so they’re affordable and accessible.
What we’re still thinking about
40%
That’s how much Kohl’s is expanding its home assortment by — adding wall art, glassware and ceramic home decor, barware, botanicals and lighting. Home goods and decor items are already available in the retailer’s stores and on its website.
The home goods push comes as the category overall faces pressure. The sector has experienced declines for months, according to data from the U.S. Department of Commerce. But things may be looking up: Wells Fargo analysts found that wallet share and growth in furnishings improved from January to February.
9
That’s how many stores Destination XL plans to open this year. The retailer hired real estate firm Beta Agency to help it grow its footprint, according to a press release.
Destination XL currently has nearly 300 retail and outlet stores. "These new locations underscore our dedication to meeting our customers' where they live, offering them an expansive selection of styles that fit perfectly," Harvey Kanter, DXL CEO and president, said in a statement. "It's not just about expanding our presence; it's about enriching our customers' shopping experiences and ensuring they find everything they want in one place."
The announcement came just before the retailer reported fourth-quarter net sales fell 4.7% year over year to $137.1 million, while net income dropped 37% to $5.2 million.
What we’re watching
What happens if Nordstrom goes private?
Macy’s is fielding a go-private takeover offer from real estate-minded investors, and that may be nagging at the Nordstrom family, according to GlobalData Managing Director Neil Saunders.
This week, Reuters reported that the founding family, which still owns a significant number of shares in the department store and whose members serve as key executives, are attempting to take that company private. (In an email to Retail Dive, Nordstrom said, per its policy, it doesn’t comment on rumors or market speculation.) They have been here before: In 2018, investors led by the Nordstroms offered $50 per share, but that was rejected by the board as too low. Today capital markets are tight, and it could be difficult or overly expensive to secure financing, according to Saunders.
Given the retailer’s struggles in both its full-line and off-price operations, the family may be in defensive mode, hoping to head off the situation Macy’s finds itself in, according to Saunders. But it could be a good move, he said in emailed comments.
“A change in ownership will not remedy all of Nordstrom’s issues; especially as many of the same people will remain in charge of the business,” he said. “However, it may give the firm more breathing space to make investments and take a longer view on how to evolve the proposition. At the same time, the company needs to take care not to laden itself with debt as this will hamper any recovery.”
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter.
