Saks Passes on Lower Priced Merchandise

Many companies today are lowering prices and offering sales in order to keep customers shopping in their stores. During the holiday 2008 season, the company stated that by cutting prices on their merchandise, they endangered the company image. Saks is known for selling high-priced, luxury items from designers such as Christian Dior, Prada, Louis Vuitton, and many more. The company believes that their image should not be tainted by the idea of slashing prices for the sake of business. On the other hand, there has been a trend of designers widening their price range and lowering the prices of some products. Christian Dior, whose handbag entry-level prices are usually around $1,500, will be selling handbags at an entry-level price of $950. In all, Sack Inc is hoping that by designers offering these cheaper prices, they will not have to resort to cutting their own.

I believe that by Saks not lowing prices, they are in fact accepting that they are loosing their consumers. Many companies have had to make choices. They feel as if they are selling out, but the company lost $98.8 million last fiscal year because prices were too high. I believe that this choice was a way of salvaging the ego of company leaders. I do not know of anyone who can afford to spend $950 on anything, especially not on a purse. The economy may be on the rebound, but it will take a long time to get the economy back where it was before.

Article from: (http://www.reuters.com/article/newsOne/idUSTRE5326K020090403)

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Wal-Mart and Macy's - Leading the Way for Retailing Strategies

As the global recession continues on, retailers like Wal-Mart and Macy's have found ways to appeal to the more price conscious consumer of today. Consumers are now looking for better deals instead of better brands. Companies like Wal-Mart and Macy's have noticed the trend and are now choosing to sell more of their store brands. Wal-Mart's Great Value brand has, over time, become the most profitable for the company. Macy's is pushing it's My Macy's initiative nationwide in order to tailor it's merchandise to specific market segments.

Many other companies such as Best Buy and Kohl's are also choosing to offer more private label products in order to keep up with their "new" consumers. These retailers are also expected to downsize their packaging, store size, and growth expectations in order to rebound from the nation's falling economic conditions. Some companies have also adopted the sales tactic of selling only a small amount of brand name goods as a way to increase exclusivity. This way they would be able to sell these products full price.

I understand why these companies are choosing to produce more private label brands. If that is what consumers are buying, then it makes sense to sell more. I am more of a brand name girl, so the idea of the stores selling these brands full price has a negative affect on me. I feel as if the companies are forcing consumers to buy their private label products. This will most likely slow down the number of sales that stores are having, which is not good for consumers like me.

Article found at: (http://online.wsj.com/article/BT-CO-20090323-705244.html?mod=dist_smartbrief )

Aeropostale Targeting Tween Market

It is amazing to think that in the mist of all the economic grief dispersing throughout the country, it is Aeropostale that that has risen above it. The company had a net income that rose 5% at a time when most companies were reporting losses. Their next venture is to target the tween market. The company plans to spend $55 million dollars opening 50 new stores in the next fiscal year. Ten stores will be P.S. by Aeropostale (tween stores) and the rest will be full Aeropostale stores. It is difficult to say if this venture will be a success. Many tween targeting businesses have suffered throughout the economic crisis. Although many businesses in this market are having trouble, other retailers such as Abercrombie & Fitch and American Eagle are also experimenting with the tween market segment.

I think that Aeropostle opening tween stores will be a good idea overall. There are a lot of children around that age who would love to wear Aeropostale clothing if they could only fit into them. It is also good that they decided to open up a different store so that it will not interfere with the full-line Aeropostale store image. I believe that this is a great idea, but I have to caution that, with the economy being the way it is, the timing may be a little off.

Article and Picture found at: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=102222

H&M Launches Home Textiles

In an increased effort to offset the the slow economy and fashion sales, H&M plans to launch home textile products. The retailer has been seeing a decrease in sales in all of its stores since August 2008. The plan to launch home textiles was planned for fall of 2007, but was postponed. Now they are hoping that by adding this new product line they will be able to balance the slow economy. These products have already reached consumers in Scandinavia, Germany, Finland, Austria, and the Netherlands. Finlay reaching the U.S., H&M has chosen not to highlight their launch with their regular festivities. The company feels that in launching a new product in a low economy is risky, and they would like to slowly test the product sales in hopes that it will grow over time.

I absolutely love H&M's clothing. I'm sure their home textile products will be just as great. I do believe that with the economy being as bad as it is, most people will not be interested in high priced towels, pillows, and curtains. Linens and Things went out of business because their product sales were doing bad. Why then, would that same consumer market want to spend their money on the same products at a high-end apparel store? I'm sure about their products, but their timing is off.

(Info and Picture from: http://online.wsj.com/article/SB123594595077704461.html)

Nordstom Planning to Open 10 Dicsount Stores

All companies have seen the effects of the current economy crisis. Nordstom who planned to open five full-line stores and to Rack discount stores has had a change of plan. Instead, they will be opening 13 stores, 10 of which will be Rack discount stores. Over the year, they have found that the major losses to the company have come from their full-line Nordstom stores. They hope that this will not only please their core consumer group, but also those consumers who can no longer afford to shop at Nordstom. “We are still focused on the same loyal Nordstrom core customer, but many have different needs than they did last year. They are shopping less and are making more deliberate purchases,” said President Blake Nordstrom.

The situation with the economy has affected everyone, Nordstrom's new discount stores will not have much of an impact on me. I have never shopped at Nordstrom, and I never even knew that they had discount stores. It is great that they have found a way to rebound after the economic crisis hit. My hope is that it will not only help their company, but also consumers as a whole.

Information from: (http://www.msnbc.msn.com/id/29362106/)

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Retail Sales on the Rebound

According to the National Retail Federation, January retail sales were unexpectedly high. This can be attributed to the large number of sales and beginning of the year discounts given out by stores. Retail stores excluding automobiles, gas stations, and restaurants, have seen positive increases in sales. Budget conscious consumers have spent far less this January as opposed to last January, but sales from December to January have increased. It is said that it may be hard for retailers to maintain this momentum, but by the fourth quarter, many should see positive growth.

I truely believe that this increase in sales is due to the large amount of discounts given by stores. It is hard for me to pass up a good sale so, if I'll spend for a good sale, it is only safe to assume that others will too. I hope that this slight growth in spending will continue to boost our economy. More sales and more growth in the economy will mean more jobs available to me upon graduation.

Article found at: http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=671

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Economic Affects on Valentine's Day

With the economy being as bad as it is now, you would think that Valentine's Day will be a bust. In a survey done by the National Retail Federation, experts found that the majority of people do not plan on changing much about their Valentine's Day spending. They found that most people will spend an average of $102.50 this year, which is only $10 less than last years average of $122.50. Traditional Valentine's Day favorites such as flowers and candy are expected to sell at the same rate. It is also said that more people will be sending greeting cards than last year. NRF President and CEO Tracy Mullin stated, "A bad economy won't stop cupid this Valentine's Day, but it might slow him down."
For me, Valentine's Day is not that big of a deal. Money will be spent, but because I am a college student and broke, I do not plan on my gifts being very expensive. Not to mention, most women do not spend as much money on Valentines day as men. Lucky for me, but not for my boyfriend.

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