Retail Giants Are Taking Measures To Break Through The "New Normal".

According to the world clothing and shoe net, the past 2016 was a cloudy year for North American department stores.

Large scale closes and layoffs caused by the recession of performance have become the norm of the industry. The retail giants have adopted pformation measures to break through.

This pformation is evident in the performance reports released by major department stores.

Last week, the United States

A number of department stores, such as hills department store, Penney Company, Nord, and so on, have announced the 2016 financial year report. Without exception, the sales figures of the fourth quarter and even the whole year are not satisfactory, and the number of stores is also decreasing.

Under the circumstance of poor performance, almost every mainstream department store in the United States is trying to reduce the loss through layoffs.

In February 23rd, the US Sears Co (Sears) released its four quarter earnings report. In the afternoon, Group CEO EddieLampert fired 130 employees of the company by e-mail.

"Layoffs are not an easy decision to make, but I have to make difficult choices in the current situation."

Hillis CEO said frankly.

The global economic recovery is slow.

Under the background of constant impact, the days of department stores at home and abroad are not very good.

Closing shop "new normal"

As a department store with more than 150 years of history, Messi was founded in 1858. Throughout its development, it can be said to be a microcosm of the rise and fall of the department store in the United States. Macy's

However, the decline of this old department store showed signs at the beginning of last year. As early as the beginning of 2016, Messi department store announced that it had closed more than 40 stores.

In a year's time, the store's plan is still in full swing. In order to further cut costs, Messi's Department announced that it will close about 63 stores and lay off nearly 10000 people this spring.

Messi department store's recent earnings report showed that total sales in 2016 decreased by 4.8% to $25 billion 780 million compared with the same period last year, and net profit fell sharply by 43% to 611 million US dollars.

In this regard, Messi, department store CEOTerryLundgren, said that the performance of the past year was not satisfactory. In 2017, it planned to focus its resources on the best selling locations and add new brands.

Large scale shops and layoffs do not seem to be able to stop in time. Since this year, rumors about the upcoming sale of Messi's department store have been reported for four times. According to foreign media reports, Hudson Bay, a Canadian retail group, is discussing acquisitions with Messi.

In response to rumors of takeover, the reporter sent an email to the head of Messi Store China, but as of press release

No reply was received.

Sears, another retailer, failed to escape the slump of sales. Last week's report showed that the turnover in the fourth quarter dropped by 16% over the same period last year. At present, the turnover of the company has dropped to 6 billion 100 million US dollars, with a loss of up to 635 million US dollars, and the largest decline in the turnover in the same industry.

Nodes Tron, a discount department store, has Nordstrom.

The department store, which had fallen into disputes with President Trump's daughter Ianka Trump's personal brand, reached $14 billion 500 million last year, an increase of 3.6% compared to the same period last year, with net income of $354 million, down 41% compared to the same period last year, or 0.4% less than its sales.

Penney, by contrast, is one of the few retail businesses that turn around. Although it only recorded a profit of 1 million dollars, it also announced that it would close about 130-140 stores in the coming months.

In contrast, the development of traditional department stores is also not booming in China.

From the list of shop closes newly released by Lian Shang network, we can see that in 2016, in the department stores, shopping centers and large supermarket formats, 46 companies closed 185 stores, including 56 stores in domestic department stores and shopping centers.

In the past year, many famous foreign department stores in China have chosen to leave, including Marsha general store in the United Kingdom, the joint venture hall in Japan, Baisheng group in Malaysia and so on.

"A lot of people have seen the department stores shut down and say that the department stores are not working. I do not agree with them. In fact, closing stores is an inevitable process in the adjustment of brand strategy."

Zhuang Chunjie, partner of OC&C Greater China, said in an interview.

Taking the Hongkong market as an example, Zhuang Chunjie predicted that the closing tide would last two years until Hongkong's retail industry regained its "normal" status.

Strategic adjustment

A thorough study of the fundamental reason behind the physical retail outlets is nothing more than the result of excessive e-commerce and poor sales performance.

Despite the slow growth of global retail sales, the growth momentum of e-commerce is still rapid.

According to the open information of the US Department of Commerce, in 2016, the sales volume of the US electricity supplier was about $350 billion, and the average annual growth rate in the past five years was 15.35%.

In fact, with the rise and popularity of e-commerce and mobile payment, Messi Department started implementing the full channel strategy integrating online and offline resources and mobile terminal resources as early as 2010, including opening up online and offline resources, gradually blurring the boundaries between online and offline shopping, and making use of consumer big data for analysis and precision marketing.

In August 2015, Messi department store and Alibaba group jointly announced that the two sides reached a long-term exclusive strategic cooperation and entered the Tmall international platform officially in the same year 11.

As for offline stores, there seems to be no Alibaba figures in the above takeover rumours.

Of course, in addition to actively embrace the Internet, actively adjusting the proportion of their formats is also an important part of the pformation of the department store industry.

Changjiang Securities analyst Tong LAN believes that for traditional department stores, it is necessary to admit the effect of shunting on line, but do not think that the impact is one-way. The department stores need to adjust their shopping cost performance, analyze the needs of consumers, provide corresponding goods and services, and fully mobilize their initiative.

Published in the circulation Blue Book: China business development report (2016-2017), the Academy of Social Sciences pointed out that in the next 5 years, 1/3 will be eliminated in China's commodity trading market, and 1/3 will be pformed into an experiential shopping center with zero and zero, and 1/3 will successfully connect online and offline.

"The environment of the department store is survival of the fittest and survival of the fittest. We see that traditional businesses are weakening, retail stores in shopping malls are decreasing, while catering, entertainment, education, sports and other experience formats are increasing."

In an interview with reporters, Huang Wenjie, executive chairman of the Guangdong Circulation Industry Association, pointed out that the consumer market itself will not shrink absolutely. The key is that people's consumption demand is developing at any time, and there will be different needs and performances at different stages. Retailers should make adjustments according to the timing of change.

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