August 14, 2022

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The Weekly Closeout: Petco to test a new store concept, and Balance Athletica rebrands

8 min read

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It’s been another week with far more retail news than there is time in the day. Below, we break down some things you may have missed during the week and what we’re still thinking about. 

From Lanvin Group prepping to go public to the Ocean Shipping Reform Act passing in the Senate’s commerce committee, here’s our closeout for the week.

What you may have missed 

Lululemon enters tennis with first collection designed for the sport 

Lululemon is launching its first collection designed specifically for tennis in stores and online on Tuesday, the retailer said in details emailed to Retail Dive. The new line launches in collaboration with Lululemon brand ambassador and pro tennis player Leylah Fernandez, who will compete in Lululemon’s new line this season. The apparel was designed for movement and products include sport-specific features like tennis ball pockets.

Pro tennis player Leylah Fernandez will sport the collection as a Lululemon brand ambassador.

Courtesy of Lululemon

 

Lululemon’s women’s tennis offering includes a tennis dress, a high-rise tennis skirt, multiple bras and a jacket. The men’s collection includes tennis shorts and a vented T-shirt, and Lululemon is also selling accessories like visors. More products will launch in the summer. The expansion puts Lululemon into more direct competition with sports generalists like Nike and Adidas, but the retailer is also keeping its athleisure focus with the new offerings, touting the broader applicability of its tennis apparel.

“The versatile styles are easily paired and layered with Lululemon sweat and lifestyle collection pieces for on and off the court,” the company said in details about the line.

Balance Athletica rebrands following New Balance trademark infringement lawsuit 

Denver-based athleisure brand Balance Athletica this week announced it would rebrand as “Vitality,” which the company said would allow it to “elevate and evolve nearly four years after its founding.” The change is set to take place across its digital and social media channels, as well as across all future product releases, in the coming weeks.

Although the company made no mention of it in the press release, New Balance filed a trademark infringement lawsuit against Balance Athletica in November of 2020, alleging that the smaller company used a “confusingly similar mark Balance Athletica to sell the same goods, to the same consumers, using the same marketing channels.”

New Balance argued at the time that “actual confusion in the marketplace has already occurred,” pointing to a Poshmark post in which a user identified a Balance Athletica product as “New Balance.” The company also took issue with Balance Athletica’s trademark application for the phrase “achieve balance,” saying that it has used the phrase “achieve with New Balance” since the ’90s.

“For more than a decade, the company prominently used the achieve mark on nearly every shoe box it sold, which corresponds to hundreds of millions of pairs of shoes,” New Balance said at the time.

The lawsuit was closed in September 2021, and now Balance Athletica is rebranding. “I am excited for the evolution of Balance into Vitality,” CEO Taylor Dilk said in a statement about the rebrand. “Our mission of inclusivity, commitment to our customers, and focus on confidence-inducing apparel will remain at the forefront.”

Lanvin Group preps to go public in SPAC deal

Lanvin Group on Tuesday announced that, after merging with special purpose acquisition company Primavera Capital Acquisition Corporation, it will list on the New York Stock Exchange under ticker symbol LANV. Proceeds are expected to be up to $544 million, which will be used to accelerate the company’s brand portfolio and fund acquisitions. 

“We are excited to partner with Primavera for our next chapter of growth across Europe, North America and Asia,” Joann Cheng, CEO of Lanvin Group, said in a statement. 

Lanvin Group is the parent company to French couture house Lanvin, Sergio Rossi, Wolford, St. John Knits and Caruso. It operates in over 80 countries, with more than 300 stores. The Lanvin Group expects to open over 200 new stores by 2025.

Petco announces new store concept, reaffirms 2022 guidance

During Petco’s first investor day since returning to the public markets last year, the retailer announced a number of initiatives to achieve long-term growth, one of which is a new store concept.

Aimed at consumers in rural communities, the pet retailer unveiled a store that will feature products for pets and livestock.

“We know there’s key areas across the United States that are being underserved today, especially in pet specialty, and especially in areas where Petco currently doesn’t have very much market space,” Justin Tichy, Petco’s chief stores officer, said at Wednesday’s investor day.

The new stores, which are freestanding, will first open in Petco’s second quarter in southern states. Tichy said Petco already identified “hundreds of potential markets that we could serve,” adding that the concept has the potential to drive $1.3 billion in revenue.

The pet retailer also reaffirmed its financial guidance for 2022, expecting revenue to be between $6.15 billion and $6.25 billion and adjusted EBITDA to be between $630 million and $645 million.

Retail Therapy 

Shore to please

American Dream this week announced DJ Pauly D, of “Jersey Shore” fame, will be doing an event at Nickelodeon Universe, which is the largest indoor theme park in the Western Hemisphere. It just happens to be in a mall. 

On April 2 guests that are 18 or older can experience the theme park while listening to the beats that Pauly D drops. VIP packages will run you nearly $130 a ticket, and general admission is close to $70.

American Dream this fall opened a luxury wing, dubbed “The Avenue” that features high-end retailers like Dolce & Gabbana, Mulberry and Hermès. It is also the home of a new, two-story Toys R Us flagship store, which was scheduled to open in December. But it is also having problems with debt, and its parent company recently asked for a four-year extension on a $1.7 billion loan. 

What we’re still thinking about

37

That’s the additional number of Macy’s locations that will feature the retailer’s Backstage store-within-a-store concept, starting April 9. The locations will dedicate anywhere between 11,000 to 16,000 square feet of their stores to Backstage. That’s on top of 45 stores in a similar announcement last year, along with a few stand-alone locations. Eventually the company envisions 270 Macy’s stores will have Backstage shop-in-shops. 

After losing share to major off-pricers for years, Macy’s now points to its off-price business, dubbed Backstage, as key to its turnaround. As such, the company continues to clear more space for it, mostly within its own stores. 

Notably, this year’s expansion includes Macy’s Herald Square flagship in New York City and its State Street Chicago flagship (formerly Marshall Field’s). It remains to be seen whether these spaces bring new customers or added sales to Macy’s or just shift them away from the full-price areas, which will soon include new and revamped private labels, another key part of Macy’s long-term growth strategy.

Off-price retail wasn’t able to avoid the economic uncertainty or supply chain troubles of the pandemic and in fact was hit particularly hard when stores were temporarily closed in 2020. But the sector retains important strengths, including a still-robust inventory pipeline and healthy foot traffic, and stands to gain from inflationary pressures as shoppers look for price breaks wherever they can find them.

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Not to be outdone, Nordstrom this week also announced two new store openings at its off-price Rack brand, one in Phoenix and another in Riverside, California. But for the Seattle-based department store, which has been in the off-price business for decades longer than Macy’s, maximizing Rack is not just about expanding its footprint: The company is also shaking up its leadership.

Nordstrom has long said that its customers who shop at both its off-price and full-price banners spend more than those who shop just one or the other, and for years Rack has been its strongest performer. But now Rack is faltering, and CEO Erik Nordstrom at the end of last year promised to do something about it.

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