retail news in context, analysis with attitude

Published on: January 7, 2010

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Hi, I’m Kevin Coupe, and this is MorningNewsBeat Radio, available on iTunes and brought to you this week by Webstop, experts in the art of retail website design.


I’ve long joked here and elsewhere that my favorite menswear designer is LL Bean...which Mrs. Content Guy doesn’t think is nearly as funny as I do. We were at dinner the other night and we actually had a brief conversation about how old a particular sweater I was wearing was...my conservative estimate was about 20 years, but it could be older. This struck her as amazing on a number of levels, not the least of which was the fact that it still fits. (Alas, I don’t have any pants from 20 years ago that still fit, but that’s a different story. After seeing “It’s Complicated” during the vacation, I’m now saying that I’m in my Alec Baldwin phase. It’s my story, and I’m sticking to it.)

But I digress...

I’ve been thinking about LL Bean this week because of a story than ran in the Wall Street Journal the other day about how LL Bean is launching a new “Signature” line later this spring that will feature somewhat dressier and more stylish clothes that will remain faithful to the brand’s classic cultural core.

The company is doing something that Sears-owned Lands’ End already is doing. Lands’ End has on its website a line called its “Canvas” collection - a little more stylish, a little more urban, yet still functional.

Now, this path does have its potential problems. In both cases, the retailers are appealing to a younger customer who likely has not been a Bean or Lands’ End shopper, people who may think of these companies as irrelevant to their lifestyles. So getting credibility with these consumers is going to take time, patience and money.

At the same time, both companies have to be careful not to alienate their traditional consumers by being so distracted with these new brands that they lose sight of their core businesses. And they cannot let the somewhat higher prices they are charging for their new lines bleed over into the perception that they have become higher priced overall ... especially because the recession and the growth of internet shopping have both been good for their businesses.

In other words, it is all about brand equity - and how to extend it without diluting it.

The Journal points out that there is some precedent for these sorts of efforts. Abercrombie & Fitch, Banana Republic and J. Crew have all navigated these treacherous waters and managed to survive and grow. Interestingly, the Journal story does not mention Eddie Bauer, which tried to do much the same thing and, while the company survives, it is with a vastly smaller footprint of stores because of eroding brand equity that has sent it into two separate bankruptcies.

Ultimately, as always, it will be all about the customer.

I haven’t bought anything from Lands’ End in years, but even at my advanced age I find the new “Canvas” line sort of appealing - it isn’t all for me, but there are some chambray shirts on there that look pretty nice; I might order one to see if I like it.

And as a regular and highly faithful LL Bean shopper, I’m not only unconcerned about the new “Signature” line, I’m actually looking forward to its unveiling...if only because it might allow me to escape the absolutely legitimate accusation by my wife that I’ve been wearing the same styles for most of the last three decades. (I’m a creature of habit. I drove the same car for 13 years and have been wearing the same watch since 1980.)

But I think the reason that I’m not threatened by these innovations by Bean, at least, is that my connection to the brand is so strong that I am convinced that even as they expand and evolve, they’ll still be looking out for me.

That’s a powerful advantage for any retailer. My friend Glen Terbeek calls it the “agentry agenda,” the notion that the successful retailer needs to be the agent for the consumer rather than the sales rep for the manufacturer.

It will be interesting to see how these experiments play out for both LL Bean and Lands’ End, and these lessons that we learn ought to be applicable to all retailers looking to grow and change while still nurturing their essential brand equity.

For MNB Radio, I’m Kevin Coupe.

Published on: January 7, 2010

The New York Times reports that while Kellogg has built on the popularity of its Special K cereal brand by expanding it into a nine-flavor line and adding “noncereal products like frozen waffles, protein bars, crackers, shakes and powdered drink mixes that can be substituted for cereal at mealtimes,” its newest advertising campaign doesn’t feature any of these items - and doesn’t even show the logo.

Rather, the new television commercials feature what are described as women who are not “idealized and unattainable image of perfection,” talking about their weight and fitness goals. The Times writes, “Six spots feature women whom the company encountered while conducting consumer research describing fitness goals. In one spot, a woman wants to stop ‘using my arms to hide my stomach’; another wants to ‘hear those four little words: Have you lost weight?’; another wants to show her young daughter ‘that mommy feels confident.’ A voiceover at the end of the spots concludes, ‘Be victorious — take the Special K Challenge’.”

“We’re trying to be faithful to giving real women a place to declare victory without the piece feeling overwhelmed by what the brand brings to the table,” Jose Alberto Duenas, Kellogg’s vice president for US cereal marketing. “If you want to make a connection, you have to give consumers a chance to take part of the spotlight. Authenticity is what we’re looking for.”

Published on: January 7, 2010

William J. Grize, the former president/CEO of The Stop & Shop Supermarket Co. and Ahold USA, died on Tuesday at age 63, the retailer announced.

The cause of death was Creutzfeldt-Jakob Disease, a rare degenerative fatal brain disorder with which Grize recently had been diagnosed.

Carl Schlicker, president and CEO of Ahold USA, released the following statement: “Bill’s passing is a great loss to the Ahold USA Retail family and the supermarket industry. Our deepest sympathies are with Bill’s beloved wife of 45 years, Emelyn, his son Bill and daughter Dara and their families and his entire extended family including the thousands of associates and colleagues whose lives he touched ... Bill leaves behind a legacy of amazing dedication, firm commitment and gritty determination which will live on in his honor. Our thoughts and prayers are with Bill’s family today as our entire company and industry are in mourning.”

Grize began his career at Stop & Shop in 1967 as a part-time clerk, and retired from the CEO’s office in December 2005. He was well-known within the industry for his charitable works, especially with the Dana Farber Cancer Institute, something for which he was praised when he received the Sydney R. Rabb Award from the Food Marketing Institute (FMI).

Published on: January 7, 2010

In western New York, the Post-Standard reports that Tops Markets has made a “generous” bid for the assets of bankrupt Penn Traffic Co., and will formalize the offer later this week.

A federal bankruptcy judge is scheduled to begin sorting out the various scenarios on Friday. The Post-Standard offers the following summation of where things stand at the moment:

“Syracuse-based Penn Traffic, the parent of P&C Foods and employer of 5,700, is leaning toward breaking up and selling off the company piecemeal at a court-ordered auction. Its tapped a specialist in the liquidation of major retail chains and is asking the court for an emergency order to proceed with the auction, quickly.”

Meanwhile, “Schenectady-based Price Chopper wants 22 of those stores, including 13 in Central New York. if that bid wins, the rest of Penn Traffic will be dissolved, sold to any and all comers, underperforming stores in poorer parts of cities and rural communities shuttered and sold at auction. In documents filed Tuesday, Penn Traffic noted that Friday is the final hearing on Price Chopper's bid to buy those 22 stores.

“The unions representing Penn Traffic are still hoping for a well-heeled hero to swoop in and save the company and the union jobs. They've swayed a powerful U.S. senator and furiously filed motions to block the ‘stalking horse’ bidder -- the one who wants to liquidate the chain -- and Price Chopper's bid of $54 million for just 22 stores. They say there's still time for bidders for Penn Traffic's assets.”

Published on: January 7, 2010

Advertising Age reports that Unilever is using the Super Bowl for a major new product launch - its new Men&Care line that is just finding its way to store shelves.

The commercial reportedly will focus on “men who are comfortable in their own skin,” but will not use a male version of the “campaign for real beauty” effort that the brand used successfully for its women’s products.

While Unilever can be a potent marketer, Ad Age notes that the line extension is by no means a slam dunk: “The men's personal-care market has grown steadily in the U.S., but not at the explosive rate some marketers hoped for when it first began to emerge in earnest last decade. Men's brands such as Procter & Gamble Co.'s Old Spice and Unilever's Axe have fared well and have seen steady growth in body washes. But brands with more of a female identity, such as Nivea and L'Oreal, have found tougher going in the men's market. Even P&G's Gillette has faltered with last year's hair-care launch, which was soundly beaten by Axe and has been discontinued in Walmart stores.”

Published on: January 7, 2010

• ABC News reports that Walmart-owned Sam’s Club has begun selling a new private brand French vodka - Rue 33, which is selling in 1.75 liter bottles for about $28. The company is capitalizing on the fact that vodka is the most popular spirit in the US, with $4.49 billion in annual revenue.

The story notes that this is the first private label liquor product offered by Sam’s, though Costco has long sold a line of Kirkland private label spirits.

Published on: January 7, 2010

The Sacramento Business Journal reports that a former Safeway purchasing manager has been charged with two counts of wire fraud, related to bribes he took from SK Foods, tomato processing company, to buy products from it and not other firms.

The former buyer, Michael Chavez, has pleaded guilty and is expected to be sentenced in coming weeks.

According to the Journal, “The federal investigation surrounding practices in the tomato processing industry over the past two years has found buyers who took bribes, executives who shipped poor quality product as good product, executives who embezzled funds, numerous examples of people who conspired to rig bids and instances of racketeering.”

Published on: January 7, 2010

• In Texas, WFAA-TV News reports that HEB plans to lower prices on 5,000 items, a major effort that it says is aimed at helping Texans dealing with a tough economy.

Published on: January 7, 2010

• Costco reports this morning that its December sales increased 11 percent to $8.26 billion, on same-store sales that were open nine percent.

• Family Dollar Stores reports that its first quarter net income rose 14 percent to $67.6 million, from $59.3 million during the same period a year earlier. The company had previously reported that its Q1 net sales rose 3.9 percent to $1.82 billion, on same-store sales that were up 2.4 percent.

• Drug store chain Walgreen said that its December sales were $6.3 billion, up 3.6 percent from $6.1 billion during December 2008. Same-store sales were off 0.3 percent.

Published on: January 7, 2010

• It is being reported that Al Bernardin passed away at age 81. His contribution to the nation’s culinary history is legendary; as a longtime senior executive for McDonald’s, he played a major role in the development of the company’s french fries, hot apple and cherry pies, and fish sandwich - and he is credited as the inventor of the Quarter Pounder.

Published on: January 7, 2010

...will return.