Target, Saks, At Home & Other Retail Musings on a Tuesday

Some assorted thoughts on the wonderful world of retailing,

Target’s 1,800-person layoffs: Yeah, it’s a big number but let’s remember it’s only 8 percent of its workforce. And it comes as many companies are also reducing their staffs.

But what’s more troubling here is that the incoming CEO Michael Fiddelke who announced this move, implied that this will help them to grow their business. In the history of everything very few companies have grown their top lines by reducing their payrolls. Sure, they might increase their bottom line but Target’s main objective right now is to jumpstart its revenues and return to growth mode. Cutting heads by itself is not the way to do this. I would have liked to have seen Fiddelke pair this announcement with some kind of a plan on building sales. Maybe there is a plan but it sure would have been nice to hear at least some of it.

At Home Out of Chapter 11: Good news for this home Big Boxer, it could have gone south in a different scenario. Instead it comes out of bankruptcy with $2 billion in debt wiped off its books, with some 30+ fewer stores and new investor owners. What it doesn’t have as far as I can see is a plan on how to run its business differently now. It’s still stuck with those gargantuan stores, a heavily private label, over-assorted merchandising assortment and bad locations. How does At Home make itself successful without a fundamental change in its business strategy? No debt is part of it but certainly much more has to happen.

Saks: Is anyone else getting that sinking feeling about Saks Global? Every week or two there seems to be more distressing news about the company. Maybe continuing to pay vendors slowly despite claims otherwise. Or maybe financing finagling that continues to suggest the numbers aren’t adding up quite the way they are supposed to. Bankruptcy is a long-shot because it could mean Richard Baker — the mastermind who has continued to destroy most everything he touches — would lose control of the company and that’s something he will avoid until there is absolutely no other choice. But how this company succeeds — especially with the luxury market continuing to struggle — is hard to see.

AI Pushback: For everyone who has thought AI was going to take over everything, including retail, a cautionary note. We’re starting to see pushback against the technology, with brands like Aerie and Dove telling their customers they won’t be employing AI in their marketing and that everything shoppers see will be real. Watch for more companies taking this route going forward. It doesn’t mean AI won’t be a huge factor and an important tool in running businesses. But it does mean it won’t be everything and the consumer who values authenticity and genuine experiences will demand that what they see is real.

Tariffs: What would a story like this be without some mention of tariffs, right? Who knows where it all goes but the latest negotiations with China and others sure look like they will lead to an outcome that is pretty much where things were before Trump began his ridiculous campaign to turn everything upside down. In the meantime, how much time, money and brainpower has been wasted dealing with all of this nonsense instead of building better companies…and a better country?

所有跟帖：