When Macy’s unveiled a new turnaround plan on Tuesday, it came along with a collective sense of deja vu.

The American department store chain is set to close 150 stores by 2026, bringing its total down to 350 — nearly half of the 650 locations it operated just five years ago. The hope is that shuttering those unproductive stores will allow the retailer to allocate more than $500 million in savings toward more promising areas of improvement, such as small-format stores and online-offline customer service.

But Macy’s has been shuttering unprofitable locations for years, well before new CEO Tony Spring unveiled what the retailer has dubbed as its “Bold New Chapter” strategy. As Bloomberg columnist Leticia Miranda noted this week, former Macy’s chief executive Jeff Gennette embarked on not just one, but two nearly identical store optimisation initiatives in his six-year tenure, which ended at the start of this year. And in closing stores, Macy’s is arguably further diminishing its presence in the lives of American consumers, which could ultimately be its death knell. The same trajectory pushed Sears and J.C. Penney into bankruptcy and liquidation.

If Spring were to succeed where his predecessor couldn’t — his modest objective is to deliver low single-digit in-store sales growth by 2025 and increase cash flow to pre-pandemic levels — it will come down to execution rather than direction, analysts said.

In addition to scaling back retail, Spring’s plan includes growing a fleet of small-format Macy’s stores; consolidating the merchandising team to bring together owned and licensed brands; continuing to tighten and improve private labels and refining the e-commerce experience. Macy’s will also expand its premium segment with 15 new Bloomgindale’s locations and 30 new Bluemercury stores.

Profitability, product improvements and backend efficiencies are perennial concerns for any fashion retailer; for Macy’s to finally pull off a turnaround, Spring’s proposed actions must result in a palpable difference to the customer experience — and fast. Its waning relevance among shoppers, after all, is its greatest dilemma.

“What exactly is different this time? I think this round is hopefully informed with more technical data around traffic patterns, and there’s already a big effort underway with product improvements and private label,” said Oliver Chen, retail analyst at TD Cowen.

Even so, Chen downgraded Macy’s in a note published Thursday morning, highlighting the chain’s lack of revenue growth in recent quarters despite overall consumer resilience in the US.

Other industry experts are even more sceptical of Macy’s prospects, citing the decline of the department store model that relies on promotions and commodified merchandise. Even the biggest big box store can’t compete with the endless aisles of e-commerce, and no American retailer can offer prices as low as Temu or Shein — not even Amazon.

“For Macy’s, the time for a bold move was four, five years ago,” said Doug Stephens, retail consultant and author. “At this point, they’re rearranging deck chairs on the Titanic.”

Still, it’s not too late for Macy’s to instil a little more “theatre” to its stores, according to Michael Brown, partner in Kearney’s consumer products and retail practice. Stephens recommends shifting the focus from selling product to hosting experiences like parties or panel discussions. Fashion shows and sharp merchandising were what made department stores so glamorous in the 1970s and 1980s, Brown added.

“Department stores have to be reinvigorated with experiences that make consumers come out and shop,” he said.

THE NEWS IN BRIEF

FASHION, BUSINESS AND THE ECONOMY

Shein considers London IPO amid US resistance to listing. The company would need to file a new overseas listing application with Chinese regulators if it decided to switch to London or elsewhere. Other venues including Hong Kong or Singapore may also be considered.

Warby Parker continues stable growth and store expansions. Revenue for 2023 rose 12 percent year over year to $670 million. The brand increased store count to 237 during the year, up from 200 at the end of 2022.

Birkenstock posts strong earnings with sandal demand growing. Adjusted earnings were €81 million ($88 million) before interest, taxes, depreciation and amortisation in the quarter ending in December. Revenue in the quarter reached €303 million, higher than the €285 million average estimate.

Puma sees sneaker demand picking up in the second half of the year. The company expects to gain more momentum as it introduces new products and implements a revival plan. Puma shares rose as much as 3.9 percent in early trading before paring gains.

Mercado Libre slumps most in two years on profit shortfall. Shares slumped 13 percent Friday, the worst intraday drop since May 2022, after the company reported earnings per share of $3.25. The company posted full year net revenue of around $14.5 billion and net income of $1.2 billion for the year.

The RealReal reaches EBITDA profitability. The resale platform saw revenue drop 10 percent in the fourth quarter of 2023, but met its profitability benchmark by prioritising consignment margins.

EBay reports strong holiday quarter and expands buyback plan. Fourth-quarter profit was $1.07 a share on sales of $2.56 billion. The shares rose about 4 percent in extended trading after closing at $44.39 in New York. The stock has increased 1.8 percent this year.

Inditex to gradually reopen stores in Ukraine. The company plans to reopen its first 20 stores in Ukraine, three of them under the Zara brand, and resume online sales. Inditex cited improved local market circumstances as reason for the reopenings.

Moncler CEO Ruffini will hold 16 percent of shares after Rivetti family invests directly. The Rivetti family, who founded Stone Island, will become a direct shareholder in the luxury group after ending an investment agreement with Ruffini’s holding company Double R. Carlo Rivetti will remain a Moncler board member and chairman of Stone Island.

Adidas is dropping a new batch of controversial Yeezy shoes on digital channels. The sportswear company looks to boost earnings by working through the backlog of footwear from its cancelled partnership with Ye. The products will be released in phases over the coming weeks.

Rowing Blazers acquired by Burch Creative Capital. The deal will inject new capital into the New York-based preppy streetwear brand. This will allow it to expand its womenswear assortment and move into a larger Manhattan flagship.

Renewcell files for bankruptcy. The Swedish textile recycler said it was unable to secure sufficient long-term funds to continue operations. The situation marks a blow to efforts to introduce new, more sustainable materials to the market at scale.

EU states block supply chain due diligence law. The stalling of the law designed to clean up corporate supply chains drew condemnation from climate and human-rights activists. The opposing countries cited concerns over how such a law would affect the competitiveness of European businesses.

Sustainable Apparel Coalition rebrands as Cascale. The move distances the organisation from a greenwashing scandal focused on its Higg sustainability tools. The rebrand also indicates ambitions to expand beyond fashion.

Investment in next-gen materials rebounded to $500 million in 2023. The figure is up nearly 10 percent from a year before. Investors funnelled more money into the space despite a wider slump that saw venture capital funding fall 42 percent and deal count decline 30 percent.

THE BUSINESS OF BEAUTY

British fashion chain Next is in talks to acquire The Body Shop assets. Any sale, however, would not include The Body Shop’s most recognisable assets. The news follows announcements of The Body Shop shuttering 75 stores across the UK.

Bath & Body Works projects downbeat full year sales and profit on slowing demand. Shares were down 9 percent in pre-market trading. The beauty and skincare firm expects 2024 annual net sales to range between a decline of 3 percent to flat.

US FDA chief is very concerned about fake weight loss drugs. Demand for weight loss drugs is far outpacing supply with some analysts forecasting the market for weight-loss drugs could reach $100 billion a year by the end of the decade. Earlier this month, the FDA sent warning letters to two online vendors for selling unapproved and misbranded versions of semaglutide and tirzepatide.

Supergoop names Lisa Sequino as new CEO. Most recently, Sequino was CEO at Jennifer Lopez’s skincare brand JLo Beauty. Sequino takes the helm after former CEO Amanda Baldwin joined Olaplex late last year.

Estée Lauder announces collaboration with Sabyasachi on a collection of 10 lipsticks. The partnership is part of the conglomerate’s larger strategy to capture the Indian market. It also marks Sabyasachi’s first foray into beauty.

MEDIA AND TECHNOLOGY

Vogue World to kick off Couture Week with Olympics tribute. The production will take place on June 23 on Place Vendôme. It will feature fashion content overseen by editor Carine Roitfeld, Off-White designer Ibrahim Kamara and fashion historian Alexandre Samson.

LVMH in exclusive talks with Lagardere for Paris Match magazine. A sale would expand the media assets of LVMH CEO Bernard Arnault, which include French business daily Les Echos and national newspaper Le Parisien.

Samsung to unveil wearable smart ring at World Mobile Congress. The South Korean company will publicly display the Galaxy Ring for the first time after teasing it last month. The Galaxy Ring’s official launch is expected later in 2024.

Compiled by Yola Mzizi.

PARIS — “Everybody has their idea of what Ann Demeulemeester stands for as a brand,” says Stefano Gallici, whose sophomore collection for the house that Ann built will be revealed Saturday night at Espace des Blancs Manteaux. “It is usually a narrow misconception anchored to a view that wipes away the inevitable and charming complexities of Ann’s vision. There is more to this house than the stompy boots, the dangling straps and even the slouchy tailoring, or the black, even though they are still here.”

“I am trying to offer my unfiltered point of view,” he adds.

With a directness that reads as assured rather than arrogant, Gallici — a lanky beau with the curly mane of a faun, the skinny frame of a rocker and the melancholic gaze of a poet — gets right at the problem that haunts houses like Demeulemeester — and Helmut Lang, for that matter — who suddenly lose their founder mid-career: the risk of turning what was a vision into a set of soulless, commercial codes.

After Ann left her namesake brand in 2013, its identity drifted here and there as its fortunes waned. In 2020, Italian retail guru Claudio Antonioli came to the rescue, acquiring the brand through his Milan-based Dreamers Factory incubator. For a few seasons, he released collections designed by a studio team that were heavy on slouchy tailoring. Then came the short-lived tenure of Ludovic de Saint Sernin, who, despite bringing new energy to the turnaround efforts with a punchier look, exited the brand last May after a single season amid disagreement with management.

In the spring of 2023, Antonioli made the bold move of promoting Gallici, who was already part of the studio team and trained at the Università Iuav di Venezia, Italy’s most progressive fashion school, to the role of creative director. “Stefano, despite being young, was an easy choice for me: for the work ethic, for the passion he nurtures for the brand and, not least, for his genuine interest in the project as an exploration of style, not as an exercise in self promotion,” Antonioli explains.

Gallici has a stronger connection to Ann’s legacy than his predecessor, but he is adamant that he’s not trying to be a copycat, replicating the archive ad nauseam. His gaze is drawn towards specific moments from the brand’s past in which sharpness, even sexiness, came to the fore; the barbaric, wild tones that emerged in certain collections. There is also a subterranean vibe to what Gallici does that is entirely his own: rooted in music the way Ann’s work was rooted in poetry.

At Christmas, Gallici sent out vinyl LPs with the soundtrack to his first show. For tomorrow’s presentation he is collaborating with composer and sound experimenter Neuf Voix, who will perform live. “Sound is an integral part of my vision, and the whole mindscape I aim at building for Ann,” he says.

The new collection explores fragility and strength with a kind of pagan rawness and a renewed colour palette that includes deep reds and pale flesh tones. The line up features greatcoats inspired by Joseph Beuys’, raw edged leather aprons and long pleated skirts, with tufty sheepskin and shaggy knit collars adding a wild touch. There are also some negligé and lingerie-like slip dresses which, mixed with harder pieces, look unexpected and fresh.

“I see the archive as a forest in which to enter and get lost, picking things up as I go along,” muses Gallici. “It is a journey of discovery as much as it is one of self discovery.”

The Body Shop is to close 75 stores across the UK in the next six weeks with the loss of 489 jobs, according to administrators who are overseeing the restructuring.

The closures are spread across the country, from Swansea to Glasgow, and mean that nearly 800 people will lose their jobs when the 300 redundancies at the head office are taken into account.

However, 116 stores will stay open under the changes, which affect only the company’s UK operations, the administration firm FRP said.

Last week, the administrators laid out plans to retain more than half of Body Shop stores as they announced the closure of seven shops. On Thursday, they told staff an additional 75 stores would close over the next four to six weeks.

The retailer, which employs more than 2,200 people in the UK, called in administrators this month, just months after being taken over by the restructuring company Aurelius in November.

Tony Wright, the joint administrator, said: “In taking swift action to right-size the Body Shop UK store portfolio, we have stabilised the business and are providing the best opportunity for this iconic brand to have a long-term, sustainable future.”

“The UK business continues to trade in administration, and we remain fully focused on exploring all options to take the business forward.”

Aurelius is understood to be the main creditor, with secured debt that will ensure it gets paid by administrators before most other creditors. It is expected to take back the chain after the shop closures and job cuts.

The Body Shop has had three owners since it was sold by its founder, Anita Roddick, shortly before her death in 2007.

Roddick, who set up the business in Brighton in 1976, campaigned against animal testing of cosmetics and promoted natural products sourced ethically in a way that would support small producers around the world.

She shocked fans of the brand by selling up to L’Oréal, the cosmetics multinational that owns Maybelline and Garnier, for £652 million.

The brand was then sold on to the Brazilian natural cosmetics group Natura, which already owned the Australian Aesop beauty brand, for €1 billion in 2017. After Natura built up debts in buying the home-selling cosmetics group Avon, it sold off Aesop to L’Oréal and then The Body Shop to Aurelius late last year.

By Julia Kollewe

Learn more:

When Sol de Janeiro Rules Supreme, Is There Room for The Body Shop?

The beauty label has fallen under administration with plans to cut staff and stores. How did the ultimate purveyor of uber-perfumed creams and fragrances and purpose-driven brand messages, which seem so relevant now, fall so far?

Bath & Body Works forecast annual sales and profit below analysts’ expectations on Thursday as consumers scaled back spending on non-essential items like candles and fragrances, sending its shares down 9 percent in pre-market trading.

Amid high borrowing and rental costs in the US, specialty retailers including Estee Lauder and Macy’s saw shoppers restricting discretionary spending, and have revised their annual results below Wall Street expectations.

Consumer prices rose more than expected in January, while US government reports indicated a ten-month low in retail sales.

The beauty and skincare firm expects 2024 annual net sales to range between a decline of 3 percent to flat compared with analysts’ expectations of a 1.3 percent rise, as per LSEG data

The company forecasts annual adjusted earnings to range between $3.00 and $3.35 per diluted share, compared with analysts’ estimates of $3.35.

The Ohio-based company posted quarterly sales of $2.91 billion, while analysts on average expected $2.84 billion, according to LSEG.

By Annett Mary Manoj; Editing by Vijay Kishore

Learn more:

Third Point Plans Proxy Contest at Bath & Body Works

Bath & Body Works said in a statement late on Wednesday, “The Board strongly disagrees with the views expressed in Third Point’s letter.” However, it said it would review and consider Third Point’s proposed board nominations.

Birkenstock Holding Plc’s earnings beat analysts’ estimates as consumers snapped up its high-end sandals and clogs while other casual footwear makers struggled.

Adjusted earnings were €81 million ($88 million) before interest, taxes, depreciation and amortisation in the quarter ending in December, the company said Thursday in a statement. That compared with the €75.5 million average estimate.

Since Birkenstock’s initial public offering in October, chief executive officer Oliver Reichert has tried to convince investors that the company can maintain its decade-long hot streak by staying fashionable, expanding its production capacity in Germany and Portugal and targeting previously untapped countries like China and India.

The results “once again demonstrate the resilience of our business model and the strong sustained demand for our products,” Reichert said in the statement.

Birkenstock affirmed its 2024 guidance and mid-term goals of booking a gross profit margin of more than 60 percent and adjusted Ebitda margin percentage in the low 30s.

While sneaker brands including Nike Inc. and Puma SE have raised doubts about consumer spending, Birkenstock has argued that there’s an opportunity to win over new fans.

Revenue in the quarter reached €303 million, higher than the €285 million average estimate, with sales growing at double-digit rates in the Americas, Europe and Asia, the company said.

Traditionally a maker of no-frills sandals, Birkenstock has ratcheted up its offering of higher-end footwear and closed-toe products in recent years, including the Bend sneaker, the Highwood boots and more clogs with shearling. Those products command higher prices, helping Birkenstock boost profits and appeal to a wider array of customers.

While Birkenstock attracted attention from designers as far back as the 1980s, the company has come to embrace the fashion world over the last decade or so, launching collaborations with luxury names such as Dior, Manolo Blahnik and Rick Owens.

That’s coincided with a push to build out its digital sales channels, reducing its reliance on retail partners, and expand its network of factories, including a new plant in Pasewalk, Germany, that has cost more than €100 million.

The investments in the Pasewalk site, and another in Portugal, are weighing on profitability for now, but will be a long-term growth driver, according to the company.

After initially flopping in their trading debut, Birkenstock shares have since climbed about 11 percent above its listing price.

By Tim Loh

Learn more:

Birkenstock Slumps as Forecast Disappoints Some Investors

The stock slid 12 percent in trading before US exchanges opened. If the drop extends into trading hours, it could erase the gains made since the company’s initial public offering in October.