retail news in context, analysis with attitude

Responding to last week’s FaceTime about sexual harassment issues, one MNB reader wrote:

Strongly agree with your Face Time perspective yesterday. I shared it with my wife and adult daughters, strong independent thinkers, as an example of taking positions to make change from within. It shines a favorable light of potential for our industry to take a leadership position on relevant issues and be a more attractive option for talented people. Who knows, it may also help to answer unasked questions about my lifelong career choice!

On the subject of a judge ordering Amazon/Whole Foods to reopen a closed “365” store in Bellevue, Washington, one MNB reader wrote:

It looks like Amazon is getting an early experience of the challenges that B&M retailers face all of the time. It will be interesting to see how they navigate this challenge as they are now part of the draw to retail centers as an anchor while they take sales from others in the same retail center.

We have heard a lot of ideas of how Amazon might impact the B&M world but I have not heard as much on the impact to the shopping centers they now occupy. Will they become part of the community as many Grocery stores strive to do? Will they create a physical presence of their ecosystem as you suggest by buying or leasing more real-estate in the centers and occupy the entire market?

I would imagine the folks in Bentonville are having a good laugh as they watch these stories unfold and realize the media may have a new retail boogey man to focus on while they focus on catching up to Amazon online with these B&M lessons already in their past.

Tell you one thing. They’re going to be reading leases a lot more closely before signing them.

I wrote last week about how disgusted I was with the idea that Toys R Us senior management requested and got bankruptcy court approval for millions of dollars in bonuses that the company said needed to be paid to help it get through the busy holiday season.

I commented:

I’m not going to argue with the bankruptcy judge, because she knows a lot more about the law than I do, and I try to make it a practice not to cast doubt on the integrity of the justice system when I disagree with rulings.

My problem is with the executives - all well-off people who want to be further rewarded for doing what is supposed to be their jobs, which is to rescue a company that is in terrible shape in part because it was mismanaged. Give me a break.

As I’ve argued here before, it would be nice if just one of these times, these freakin’ people who ask the bankruptcy court to approve bonuses that would be paid to the people actually working in the stores, to raise morale at a time that, if you are on the front lines at Toys R Us, is fraught with uncertainty. When stores get closed, as they certainly will be when the company looks to emerge from bankruptcy, these people will be out of a job … while the senior execs will take their high salaries and bonuses and perks and go off and work for some other company where they’ll get higher salaries and bigger bonuses and more perks.

Give me a break.

One MNB reader wrote:

It's just remarkable that your blog is so successful despite your constant condemnation of the people who read it and tear-jerking for the people who don’t.

First of all, to be clear - this may be one of the nicest emails I’ve ever gotten. (Unintentionally so, but so it goes.)

Second … you assume that my readership only is high-level. Actually I’ve got a lot of readership throughout all these companies - from CEOs to store and department managers.

Third … tear jerking? Really? You display your contempt here for the people who make retail happen.

Fourth … I don’t think it is remarkable at all. In fact, I think many senior execs would agree with me. They may not live and work in a system that does, but in their hearts, they think I have a point.

From another reader:

I totally agree with your assessment!!  However I think you are being too nice.  Sounds to me, like someone got a little extra remuneration of her own to rule favorably on such an injustice.  She has just allowed these executives rape this company.

I’m not sure I would go so far as to accuse the judge of taking a bribe.

MNB reader Ron Rash differed with me:

Those executives and managers are key to the very success of attaining the now mandated earnings goal.

The point is that if there is no bonus-pay-to-stay, one could convincingly argue that many of those key people would leave a sinking ship, and fulfill the prophecy of all those front-line folks being out of jobs even sooner. Just to be clear, I have deep respect for those front-line employees, having been one myself for many years.

If there are folks at that company that do not deserve a bonus, it is the Chairman and CEO and board of directors for not having the foresight to see where that business was headed, and formulating and executing a plan to keep the business viable.

Having said my piece, I also firmly believe that a good portion of that bonus money needs to go to many of those front-line personnel, should that not be the case already.

For the record … I believe that the CEO is a prime beneficiary of the bonus program.

From another reader:

Kevin I believe that bonuses might help Toys R Us move through the holiday season and in to restructuring. However, I am in agreement with your premise that for them to be effective they should move through the whole organization. The current executive group may or may not be responsible for the state of the business but much of the success of the sales and earnings targets are in the hands of the people in the stores. If they are uncertain of their future they will also be looking for jobs in an industry that is short of bodies and not necessarily focused on their current roles. Good Store Managers in particular are needed in all facets of Retail. A total team effort is required and even then I am not sure that the Category specific Retailers that were so successful in the late 80’s and the 90’s have not been mortally wounded by Amazon, Target, Walmart, Costco etc.

And from another:

Total Greed! And none of these execs seem the least bit ashamed.  Moments like this make me fear we are making huge steps backwards in our society. Ugh.

And another:

I only shop at Toys R Us once a year… at Christmas, for all my nieces and nephews. It’s not my favorite trip, but I have to say that this year was a complete surprise. Our local store was clean, incredibly well stocked, and had lots of happy and helpful employees roaming the aisles in each section to assist customers in looking for things, etc. The only disappointment was that they only had 1 cash register open, but they were also allowing shoppers to check out at the Customer Service desk.

Fortunately, they weren’t too busy when we were checking out and we only had to wait behind 1 person in line. The Customer Service Manager apologized and explained that they had a couple of employees go home sick, so she had to send a couple of cashiers to the floor to assist customers. I thought that was a pretty novel approach to have employees assisting and selling on the store floor, rather than waiting at empty registers at the front of the store. I would hope they would call them back to work registers should they have a rush.

It was a good shopping experience… and I was surprised.

KC's View: