In these uncertain times, you couldn’t ask for a better set of data points than the retail results due out this week. It has legacy brands in trouble (Gap) and new ones on the rise (On). There are technology platforms that are coming off a great victory (Farfetch) and are struggling to regain investor confidence (ThredUp). There are also the two largest department stores in the United States (Kohl’s, Macy’s), big box retailers (Target, Walmart) and discount chains (TJX, Ross). This is what you can expect:
How bad are the holidays going to be?
For weeks we’ve been getting warning signs of a slowdown in consumer spending ahead of the all-important pre-Christmas shopping season. Capri, the owner of Michael Kors and Versace, was the latest to sound the alarm last week, slashing sales prospects for him as chief executive John Idol warned of “an increasingly uncertain macroeconomic environment.” This week we’ll get the biggest retail gauges yet, including the outlook for Black Friday and beyond for seven of the 10 biggest US apparel retailers (Walmart, TJ Maxx, Macy’s, Kohl’s, Gap, Target and Ross, according to a Wells Fargo classification). Independent forecasts have ranged from cautiously optimistic to gloomy.
The retail situation has deteriorated if anything since those reports came out, although last week’s lower-than-expected inflation report offered hope that the pain will be short-lived. Can any of the retailers reporting this week offer any more glimmers of hope? One place to look is off-price, where TJ Maxx, Marshalls, and Ross have their selection of name-brand excess inventory. The only question is whether your low-income customers can afford to buy even heavily discounted merchandise.
What will a post-deal Farfetch do next?
The big deal with Richemont is signed, and Farfetch will at some point take over its biggest rival, Net-a-Porter (pending international regulatory approval, a process Richemont said last week could take up to a year). . Farfetch has scaled and compelling new products now that Cartier, Van Cleef & Arpels and other Richemont brands will sell on the site. And yet, the company’s share price is back to its pre-trade levels, down about 80 percent in the past year. To investors, in other words, Farfetch is just another e-commerce company struggling to recapture its pandemic-era glory days. Executing the complex YNAP deal and proving it can drive growth without spending too much on customer acquisition are the key points the market will be looking to Farfetch this week.
Can a reselling platform survive on its own?
ThredUp, an online shipping platform, has seen its share price drop to 77 cents, with a market capitalization of just $77 million. (He was worth $1.3 billion after his IPO last year.) Rivals Poshmark, Depop, and Tradesy have been acquired by larger competitors, who can provide the resources, technology, and customer bases clearly needed to succeed secondhand. RealReal, one of the last independents standing, said last week it was revamping its business model to accept fewer low-priced items while focusing on profitability. ThredUp can’t upgrade to the same extent: It specializes in more affordable clothing and accessories. You will need to prove that your infrastructure and experience are sufficient. (In addition to sales on its own platform, ThredUp has built a business that handles reselling for retailers like Target and Hot Topic.) If you can make the resale economy work, you’re also one of the few businesses that could benefit from a downturn. , if consumers switch from new to used.
What is Gap’s plan?
Gap Inc. found itself at the forefront when it cut ties with Ye in September, just before the rapper’s public implosion. Since then, the main focus has been on how Adidas will move past his association with Yeezy, but it shouldn’t be forgotten that Gap also, to some extent, pinned its future on his artist and brand. Where Adidas looks to continue selling Yeezys in all but name, the Gap will need to make a clean break. His earnings this week would be a good time to talk about a plan B (which may be more wholesale deals like the one he announced with Amazon last week).
Everything else happening this week
Tuesday
GDP for the third quarter of the euro area
Walmart Results
Wednesday
On, TJX Results
UK October inflation
US October Retail Sales
Thursday
Swiss watch exports for October
Burberry, Farfetch, Kohl’s, Ross, Macy’s, Gap results
October inflation in the euro area
Friday
COP 27 ends
UK retail sales in October
Foot Locker Results
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Source: news.google.com