Filthy Commerce

Get on that, IKEA

So we're getting ready to buy a crib for the daughter and we went to IKEA to pick it up. We went during a weekday, all giddy with the prospect of avoiding the usual weekend crowds, and everything was going according to plan until it was time to actually retrieve a flat-pack box from the correct aisle.

Here is why we do not have a crib:

1. Rather than negotiate public spaces with a stroller that contains a persnickety infant, I wear the baby in a sling. The pros: We take up less space, I have both my hands free, the daughter digs this mode of transport. The con: There is no way I can help pull down a 30-pound box of wood pieces from a tall shelf without risking my daughter's fragile eggshell noggin.

2. The crib box is just big and bulky enough so that it's a two-person job wrestling it off the overhead shelf and on to a dolly. Since I'm out of commission and IKEA keeps its low, low prices by hiring maybe one employee per every 20,000 square feet of store, finding someone to help Phil pull the crib box off the shelf was nearly impossible.

3. The crib box is too big to fit into the cargo section of our Subaru Outback Sport without putting down the seats -- and we can't do that on account of the infant car seat we have in the back.

4. It was raining, so lashing the box to the roof rack was not an option.

We'll get the crib eventually. It's just a matter of finding a willing friend or relative to go to the store with Phil while I stay home with the daughter and the car seat -- and prevent the cat from peeing in the car seat again -- and we're willing to ply people with booze if that makes them more willing.

But here's what was striking about the IKEA experience:

All of the cribs were stocked on one aisle. The aisle was packed with lots of pregnant ladies, their partners and their attendant carts. There was a lot of head-scratching as these folks tried to figure out how they were going to get the heavy, cumbersome packages off the shelves and onto the dollies. And there was total freaking gridlock, which is not surprising when you have a mess of pregnant ladies, parents with strollers and IKEA-issue dollies all in one place.

This could be prevented so easily. All IKEA has to do is space out the crib's placements -- one different model per aisle -- and put the boxes at ground level for easy handling. I get why IKEA stocks all of the cribs in one place -- it's easier for whomever has to stock the merchandise, and that efficiency is probably considered better for the bottom line than customer accommodations. But dang, it makes for a very uncomfortable customer experience. And given that this is IKEA, that's saying something.

O wishlist, where art thou?

One of the smartest and most fiendish innovations in e-commerce is the one-click transaction, and two of the stores that do it best are Apple's iTunes Music Store (iTMS) and Amazon.com's Kindle store. In both cases, it is perilously simple to rack up a hefty credit card charge simply by pointing and clicking and pointing and clicking and pointing and clicking and ... you get the idea. It's budgetary death by a thousand point-and-clicks.

You never have the physical transaction that reifies the notion of exchanging money for a good or service, so you never connect "big stack of new things" with "dwindling stack of money." One minute you don't have season four of The Tudors on your laptop; the next minute, you do. The $19 charge will show up on a credit card later. Because you (as a shopper) never feel like you're spending money, it's very easy to just keep racking up the clicks and adding to your collection of digital assets.

This tidy chronological decoupling of buying action and financial consequence is a license to print money for purveyors of digital content. So why, oh why, hasn't Amazon.com found a way to link a Kindle owner to their Amazon.com wishlist in the Kindle store?

Nobody's sure what luxury is

My first reaction upon reading yesterday's news regarding Conde Nast's magazine closures was to check the circulation numbers for Bon Appetit versus Gourmet. The now-defunct Gourmet had a circulation of 950,000, with an average age of 47 and an income of $79,234; Bon Appetit has a circulation of 1.25 million, with an average age of 46 and an income of $85,161. While both had massive ad page declines this year, Bon Appetit's was slightly less hideous at 40% compared to Gourmet's 52% plunge. From a pure numbers perspective, Bon Appetit's the more valuable property: its circ list is bigger and richer, and can produce a really healthy income stream when it's sliced, diced and sold to other parties.

The numbers have very little to do with whatever cultural impact the two magazines have on the world of food writing, and I will admit up front that I am in no way qualified to assess or explain what closing one over the other means. But I can point to other people's commentary and see how it sheds light on something that the closures are pointing to.

I read Paul Smalera's piece "How Conde Nast could have saved Gourmet magazine and chose not to," and he's right in pointing out that Conde really whiffed the opportunity to dominate the online food-o-sphere by not maintaining Gourmet as an online brand. (You will all recall how Conde also missed a similar opportunity when it shut down Domino, something not lost on its former editors, who have since regrouped with Lonny.) And he explains why: Conde focuses on excess and luxury, and it has no idea how to parlay those qualities to a website.

This morning, reading Mediate's "Vogue as Versailles," I was struck by this passage:

While Vogue’s fantasy may have to shift away from luxury consumption for a spell, its upscale creativity should most certainly remain intact. Hopefully these elements will continue to be honored, yet the signs are not encouraging. The company’s choice to shutter the upscale Gourmet while keeping the more down-market Bon Appetit alive is telling.

Well, yes, but not in the "Oh, God, Vogue's going to start featuring Natalia Vodianova in Mossimo for Target! The end times are nigh!" way. Because no matter how upscale Gourmet readers may have thought themselves, the numbers are a reminder that luxury-as-a-state-of-mind is only valuable as cultural currency.

EDITED TO ADD: Today's AdAge interview with Conde CEO Charles Townsend basically confirms the reasoning behind closing Gourmet:

Advertising Age: A Conde Nast employee asked me today whether choosing Gourmet over Bon Appetit signals the future of Conde Nast. Do you shut down the title that's beautiful and smart with good writing, the employee asked, and go for the title with recipes and pictures of cheeseburgers? Do you go with mass over the esteemed, narrower title?

Mr. Townsend: That's not Conde Nast. I think that Bon Appetit certainly has broader appeal but I would by no means characterize it as a mass magazine. It's still a high-end magazine. You look at its demography, its price points, the advertising it carries, you look at everything about it, it's a Conde Nast magazine.

(Emphasis mine.)

What is telling is that Conde is repositioning itself as an old-school luxury: small, focused and intent on a high-margin business with a tiny and presumably discerning customer base. And what I can't wait to see is what the new luxury publishers end up looking like online -- and what the experience will be for readers. I have my ideas, but I'd love to hear yours.

Well, hello, world!

I've been on vacation for the last week-and-change, and since I had to write ahead on the paying blog gig, this one got the short end of the stick.  But I wanted to let you all know I hadn't forgotten you, and to leave you all with three quick hits and a piece of advice.

Hit #1: "Blue Chip, White Cotton: What Underwear Says About the Economy" (WaPo, Aug 31, 09) postulates that just as women have the lipstick index for These, Our Challenging Economic Times, so too do the menfolk -- their underdrawers. When men space out the replacement purchases, it's a reflection of economic insecurity. Sadly, there's nothing in the article postulating on what percentage of men's underwear sales are actually made by women.

Hit #2: "J. Crew: Required Reading" (Mine That Data, Aug 30, 09) is one man's takeaway from the most recent earnings call, and it's a fascinating look at how J. Crew is positioning itself strategically. Here's a hint: former Gap CEO Mickey Drexler is not falling into the "Everything on sale! AIEEEE!" strategy.

Hit #3: "Target vs. Walmart: The Next Phase" (BW, Aug 18, 09) points out that Walmart managed to clean up during These, Our Challenging Economic Times precisely because it was positioned as the leader in low prices, but Target's poised to suck up shoppers who are reluctantly scaling back their masstige-loving way of life.

And finally, the advice ... If you're ever so lucky as to make the pilgrimage to Powell's bookstore in Portland, Oregon, learn from my experience.

 First, do not get hopped up on Voodoo Doughnut's finest offerings before going in, because the sugar rush will make your eyes oscillate for half an hour. This greatly impedes efficient browsing.

Second, print out your wishlist ahead of time. Even better, nerd it up, take advantage of Powell's little "Where to find this on the shelves" feature on the website, and make a spreadsheet of which coveted books will be where. I was running around the store trying to load Powells.com on my iPhone so I could remember which odd-ducky books I wanted, and halfway through, it hit me that a little prep could have gone a long way.

Third, resign yourself to lots of hostile weirdos in the aisles. Not reserved people of cultivated and eclectic tastes like you and I, of course -- I'm talking people who will look at you bug-eyed with loathing if you happen to reach for a sci-fi author they don't care for. It will go a lot easier for you if you do not look down at their armload of books, all of which feature descriptions like "Lucinda and her best friend Ravynne just opened a freelance white-witchery agency in downtown Salem ..." or "Bob had resented being turned into a vampire during his second tour in Iraq, but it gave him advantages as a civilian private eye ...", and just keep perusing the Vernor Vinge paperbacks in the desperate hopes that you can unwittingly be spirited away via the singularity. (Also, if you are like me and end up perusing the consumer-culture section, the odds of some tie-dyed baby boomer rolling their eyes at you in pure contempt are pretty good. Not even the presence of Barbara Ehrenreich's latest in your hand will save you!)

Not like I was greatly handicapped in my book browsing -- I did walk out with two grocery bags full of books. But boy, do I wish I had taken the time to prepare a list and shelf locations before going. And to maybe eat a breakfast that doesn't duplicate the effects of benzedrine. But those are small considerations -- Powell's is totally awesome, and if you're ever in Portland, go.

(Doughnuts above are: Devil's food with coconut, vanilla custard filled, and old-fashioned chocolate covered in Butterfinger pieces. Lethally delicious.)

Me at my best ...

... is a me that is not reading any women's service magazines.

Culty workplaces and the people who love them

Lululemon is obsessed with self-improvement. One educator, on her first day at work, was instructed to build a collage for herself of her one-, five-, and ten-year goals. This she was told to post in the employees’ room, so that the other educators could help her advance. She found the whole process very cool, by the way.

-- "Lust for Lulu," NYMag, July 27, 09

But whatever happens if part of your life-goal collage is to leave Lululemon?

I've been in a Lululemon store, and the thing that impressed me was how well-designed the place was. It was this serene temple dedicated to the worship of stretch fabrics, and it was one of the most overtly gendered retails outlets I've been in; your typical Victoria's Secret feels like a unisex bathroom compared to the female vibe this place gave off.

In any event, the article explains how the company's captured the yogarati's imagination, in part because its primary and most compelling sales pitch is to its employees.

How will this affect comparison shopping?

See those shoes over to the left? I bought those last night on Amazon.com, for $18 less than I would have spent at Zappos. I got free shipping.

And now, O coincidence of coincidences, it turns out Amazon.com is buying Zappos in a deal worth more than $800 million.

Although Zappos will continue operations as an indepedent entity (CEO Tony Hsieh wrote, "In legal terminology, Zappos will be a "wholly-owned subsidiary" of Amazon."), what I am wondering is how this deal affects the wholesalers that Zappos deals with, and how this deal affects the other third-party clothing and shoe vendors that Amazon deals with. It will be interesting to see whether we'll continue to see wide price variations on the same item once Amazon's consolidated its position in the online shoe market on the back end.

And it will be interesting to see what happens to Endless.com. Amazon's saying it'll keep the separate brand around for now. I would love to see what moves -- if any -- will be made to more sharply differentiate it from Zappos.

Finally: I am sure I am not alone in wondering what Piperlime's next move is.

One down, eleven to go

Back in April, 24/7 Wall Street ran an article on "Twelve Major Brands That Will Disappear." I didn't blog it then because I was a tad pre-occupied, but I did survey the list and tuck it away for future reference.

Today, one of those brands, Eddie Bauer (EBHI) filed for bankruptcy protection. It will be bought by private equity firm CCMP Capital Advisors for $202 million in cash. CCMP's retail portfolio also includes realized investments in outdoor gear retailer Cabela's and catalog company Cornerstone Brands (which runs Ballard Designs, Frontgate, Garnet Hill, Improvements, Smith+Noble, The Territory Ahead and TravelSmith Outfitters). So I would bet Eddie Bauer's going to see a market repositioning toward their outdoor gear roots and a total overhaul of their mail-order and e-commerce operations.

This leads me to suspect that Eddie Bauer may not be disappearing, but about to undergo a transformation, the likes of which we haven't seen since Freddie Prinze made over Rachael Leigh Cook a decade ago. Truly, we live in exciting times.

By the way, the other brands in question were: Avis Budget Group (CAR); Borders books (BGP); Crocs (CROX); Saturn; Esquire magazine; Gap (GAP); Architectural Digest magazine; the Chrysler brand; Palm (PALM); AIG (AIG); one of the big three American airlines. I have my opinions on which ones will still be around, but I'd like to hear yours.

EDITED JULY 13: I got an email from Garnet Hill CEO Russ Gaitskill reading "As a point of clarification, cornerstone brands is not a portfolio company of ccmp and hasn’t been since 2005." I apologize if the phrase "realized investments" (which I pulled from the CCMP site) was misleading.

Not so much a "fare special" as a "bait and switch"

EDITED: Exciting, comments-based update on June 11, 2009

Because we like to travel and we like to live debt-free, the husband and I are signed up for fare-sale emails with several major carriers. Yesterday, Alaska Airlines (ALK) sent out one advertising fares between Oakland Airport and Kona, Hawaii for as low as $169 each way.

We have other travel plans this year that are going to be kind of spendy, but the idea of being able to nip off to the Big Island for $676 plus taxes and fees was heady. I liked the idea of being able to dash off on a whim; it would make up for our aborted-by-Aloha-Airlines-bankruptcy trip of last year.

"We can do this," I urged Phil. "Think of how nice it'll be to visit the Big Island again. It's been ten years!"

Fortunately for me, I was sufficiently persuasive and did not have to promise to stop asking, "Can we make 2009 the year of the new couch?" in exchange for five days in paradise.

So this morning, I hit the site to see if I could book the trip. Here is the sequence of steps I took:

And the rollback away from masstige continues apace ...

So Ann Taylor's (ANN) logged a Q1 loss and its same-store sales fell a whopping 43% compared to last year. Here's how the company's going to respond:

[President Kay] Krill is overhauling the Ann Taylor brand, replacing staid suits and separates with more modern, fashionable pieces set to hit stores in the fall, featuring shorter hemlines, softer fabrics and more fitted cuts in refined, often muted colors. The New York company plans to keep prices the same by making other adjustments, such as removing the lining from some pants.

"Our feeling is that when we get the fashion right, she's definitely paying full price for it," Ms. Krill said.

-- "Ann Taylor to Revamp Racks," WSJ, May 21, 09

Emphasis mine. Quick question to all you shoppers out there: Are you planning on paying full price for items that aren't even lined?

I find it interesting that "Oh, she'll pay full price once it's cheap and trendy" is a new strategy, as it is a trend away from the premier-type lines that Ann Taylor, J. Crew (JCG) and Banana Republic (GPS) have all been experimenting with. (See this earlier Rage Diaries post on Ann Taylor) We'll find out how J. Crew did next week, but the Gap reported that its same-store sales at Banana Republic dropped more than at either the Gap or Old Navy.

My prediction: Retailers will spend this year battling for differentiation among mid-tier shoppers, all of whom will be hanging back to see how low prices can go. "Premium" versions of mass-market retail will probably not do well; either you'll spend the money to nab a designer bargain thanks to panic pricing at Saks, etc., or you'll divvy up the dough for cheaper luxuries like chocolate.

On the watch list: Masstige publications

The venerable Seven Sisters of women's service magazines -- Better Homes & Gardens, Family Circle, Good Housekeeping, Ladies' Home Journal, McCall's, Redbook and Woman's Day -- were upstaged in the 1990s by fresh newcomers such as Real Simple, Martha Stewart Living, More and O, The Oprah Magazine.

A crafty way to make profits ... or not.

I saw a link for Big Day Chains courtesy of Not Martha, and I have to admit, my first thought was not, "How cute! Do I have an excuse to buy one" but rather, "How cute! I bet I could adapt that idea for an Advent calendar."

For those of you not inclined to click the above links: Big Chains provides a kit for you to make a chain of 30 paper links. You then rip off one link per day as you count down to a big event like your wedding, the presumed due date for your baby, or your birthday. The kits are $14.99.

On the one hand, I recognize that the biggest appeal of craft kits is that they take the guesswork out of selecting the right materials, and they do a lot of the tedious prep work part of crafting for you. (I say this as someone who enjoys crewel embroidery, but would probably enjoy it more if I didn't have to stencil my own patterns, a task I find slightly nerve-wracking.)

On the other hand, it seems like the peril to some crafty kits is that the barrier to entry for the kits is really low, which increases the risk that people will either copy your work or just rip off the idea. I know in some industries, ripping off an idea is tantamount to a Lawyer Employment Act. But what about crafty projects? How are the professionals handling intellectual property issues there?

As interest in crafts continues to rise in these recession-meets-DIY-ethos times, I suspect we'll see more mainstream coverage of craft industry tiffs regarding intellectual property and product lines.

Oh, you banks! Always finding ways to get taxpayer money!

For hundreds of thousands of workers losing their jobs during the recession, there's a new twist to their financial pain: Even when they're collecting unemployment benefits, they're paying the bank just to get the money — or even to call customer service to complain about it.

Thirty states have struck such deals with banks that include Citigroup Inc. [C], Bank of America Corp.[BAC], JP Morgan Chase [JPM] and US Bancorp [USB], an Associated Press review of the agreements found. All the programs carry fees, and in several states the unemployed have no choice but to use the debit cards. Some banks even charge overdraft fees of up to $20 — even though they could decline charges for more than what's on the card.

[...]

The banks say their programs offer convenience. They also provide at least one way to tap the money at no charge, such as using a single free withdrawal to get all the cash at once from a bank teller. But the banks benefit from human nature, as people end up treating the cards like all the other plastic in their wallets.

Some banks, depending on the agreement negotiated with each state, also make money on the interest they earn after the state deposits the money and before it's spent. The banks and credit card companies also get roughly 1 percent to 3 percent off the top of each transaction made with the cards.

-- "Jobless Hit with Bank Fees on Benefits," AP, Feb 19, 09

Correct me if I'm wrong, but aren't unemployment benefits funded by personal and corporate taxes? So when the banks -- which have already gotten anywhere from $6.5 billion (USB) to $25 billion (BAC, JPM, C) from the U.S. taxpayers -- grab their fees off these unemployment cards, aren't they getting more taxpayer money? Or am I missing something?

I kea, you kea, we all kea for Ikea

Raise your hand if you have something from Ikea in your house.

We do: this kitchen cart holds our microwave and all our small appliances; this set of shelves stores our vases, platters and other serving pieces, and our smaller pans; our dining set consists of one of these chairs, two of these chairs and this table. This watering can collects the faucet runoff in our bathroom. I drilled holes in the bottom of these 6" pots, and now they hold houseplants in the living room. We store our Wii controllers in this, and I line four of these up on the hall mirror and fill them with flowers nearly every week.

Like Elvis, Ikea is everywhere. And like Elvis, it will be popping up in ever-widening circles across the U.S. The WSJ reported yesterday that "Ikea Sees Opportunity in Slump." Of interest:

Sometimes derided as selling cheap, hard-to-assemble furniture, Ikea has placed more of an emphasis in its newer stores on offering design assistance for kitchen makeovers and on beefing up the quality of its home assembly and delivery services, according to [Ikea spokesman Joseph] Roth.

Its new stores have helped it gain market share. Ikea jumped to No. 5 from 7 on the 2008 list of top 25 U.S. furniture and bedding retailers by U.S. sales published by trade magazine Furniture Today.

With a couple more stores, though, Ikea could pass both Wal-Mart Stores Inc., No. 2 in the rankings, and industry leader Ashley Furniture, according to the magazine. Sales at about 33 U.S. stores and its e-commerce site generated $3.16 billion in 2008, according to the company. That means each Ikea store in the U.S. represents more than $90 million in annual sales.

The quality of Ikea's kitchen cabinet frames and butcher block countertops has been an open secret on design blogs for a few years (sample post here). I am not at all surprised that it's getting more attention now.

In my opinion, a reason Ikea's so popular:

simplicity of the designs + low prices = consumer who is comfortable personalizing their purchase.

Just look at this roundup of all the ways people have modified their Ikea buys. (I love the idea of putting a Lack bookcase or Expedit bookcase on wheels. Hello, spot below upstairs window!) The low risk/high return potential of an Ikea purchase may make it very appealing to a lot of people.

Now if they just had an allen wrench return program ...

ETA: The Harvard Business Review ran a piece as part of their roundup of 20 ideas for 2009, "The Ikea Effect: When Labor Leads to Love." Their theory on the Swedish giant's magic: "When people construct products themselves, from bookshelves to Build-a-Bears, they come to overvalue their (often poorly made) creations." This ties into the whole hands-on sense of ownership and modification I nattered on about.

Making gifts, not making money

I have been watching, with increasing amusement and interest, how the mainstream and business press are struggling to frame their coverage of handicrafting as a culture and industry. It's doubtful that anyone's going to be yanked off the commodities beat for a new macrame bureau. However, America seems to be embracing the idea (correct or no) that handmade is cheaper and more authentic than store-bought, leading people to conclude that there is monetary activity in the crafting industries. Where there is money, mainstream, national media attention will follow. The question is: what kind of attention?

Following on the heels of chocopalypse ... magopalypse!

I didn't pick up ReadyMade all that often, in part because getting an entire magazine full of things to do inexplicably stressed me out. But I did like its general editorial sensibility, which could pretty much be summed up as "Not all crafty projects have to use glitter or hew to the Kutely Kluttery Kuntry Style!"

So it's really a shame that Meredith corporation just axed the entire editorial staff as part of the magazine's upcoming move from Berkeley to Des Moines. I don't know how many of you are familiar with the Meredith oevre. Think Family Circle, Ladies' Home Journal, Better Homes & Gardens, Traditional Home, Living the Country Life. It's difficult to imagine a project like a melted construction-debris bowl in any of those.

I find it really interesting and a little disturbing the aesthetic unpacked in the last magazine post I did is disappearing from news stands. Perhaps it's a victim of demographics -- the people who are most likely to like the Domino/Blueprint/Apartment Therapy-esque aesthetics are also less likely to respond well to the kinds of advertisers who are still spending money?

Lo, the chocopalypse is nigh

Joseph Schmidt Confections will stop selling its chocolates after June 30, according to a letter sent to customers by the Hershey Co. subsidiary that operates the San Francisco chocolatemaker.

[...]

Hershey announced plans Jan. 27 to close the Bay Area factories that make Joseph Schmidt and Scharffen Berger chocolates. Hershey bought the two chocolate companies, which are operated by wholly owned subsidiary Artisan Confections Co., in 2005.

Hershey officials said the company will close Scharffen Berger's West Berkeley plant as well as the San Francisco facility that makes Joseph Schmidt chocolates, a move that will affect a total of 150 workers. A Hershey spokesman gave no time line other than "sometime this year."

At the time of the January announcement, Hershey said it will continue to produce both brands, but out of plants in other parts of the country.

-- "Schmidt to Stop Selling Chocolates After Easter," SFGate, Feb 10, 09

I see my skepticism over Hershey's ability to act in good faith was not entirely spurious. Also, assuming you're okay with expressing your powerlessness via purchases of premium chocolate, consider getting some of the truffles. I received some once as a gift and they were sublime.

On a business level, I am honestly curious as to why Hershey's is deciding to eliminate a luxury chocolate brand now. We've already established that people buy spendy chocolate even in a down market, and we know that "organic" is no longer enough to justify a higher price for premium products, so why not ax the Dagoba brand and leave Schmidt? The strategery behind this move is eluding me.

ETA: The strategy is eluding me because I don't spend enough time in drug stores. Apparently Dagoba has a distribution deal with drugstores? The wide exposure to potential customers is what's saving them. And now that I think about it, the positioning of "luxury" chocolate in a drug store is smart.

We won't even have good chocolate to console ourselves through this recession

The Hershey Co. said Tuesday it plans to close Scharffen Berger's West Berkeley manufacturing plant as well as the San Francisco factory that makes Joseph Schmidt chocolates and consolidate production at other facilities.

[...]

Saville said Hershey intends to maintain the quality of the brands, which make up the company's wholly owned subsidiary, Artisan Confections Co.

"We will continue to source the world's best cacao to create our rich and distinct chocolate," he said. "We will maintain the highest quality standard for all our artisan productions."

-- "Scharffen Berger, Schmidt Factories to Be Closed," SF Chron, Jan 28, 09

You'll forgive me for being skeptical about this reassurance, but Hershey is already using cocoa butter substitutes in their mass appeal candybars, so I'm not terribly optimistic about their continued commitment to product integrity. 

By the way, it's not like Hershey (HSY) had to close these factories as a cost-cutting measure. They earned 36 cents per share in Q4 08, a 50% rise over the year-ago quarter.

So who did well over the holidays?

According to your favorite trade pub and mine, Multichannel Merchant, these three retailers saw their stockings get stuffed with profits:

-- Urban Outfitters (URBN), which saw a 25% rise in direct sales this holiday season, which is even more impressive when you learn that catalog circulation was flat for the period (meaning: it's not like the company blitzed more people with more catalogs).  CFO John Kyees says that the X-factor in boosting sales was the merchandising mix: "You can outperform your peers if you have the courage to select the product that's going to make you stand out."

-- Victoria's Secret (LTD), which had an 11% rise in catalog sales last season. While not what the company had hoped for, it still beats flat catalog sales. The X-factor behind its double-digit direct sale increase? The Victoria's Secret fashion sho on Dec 3, 08.

-- Bass Pro Shops, which copped to a slight increase in sales. Helping it along in what was otherwise a very vulnerable discretionary-spending category: shopping as a novel, recreational experience. Spokesperson Larry Whitely said, "We didn’t do a lot of price-cutting—or offer a whole lot of special deals ... It was all about the experience. Our stores are experiential anyway—they're destinations."

-- "Holiday 2008: The Winners," MCM, Jan 20, 09

I'm including this information because I suspect we'll see more of these strategies in Q4 09. As retailers jostle for an edge, you'll see more emphasis on the experience of shopping at a particular place, and especial mention of how you can't find a specific product anywhere else.

Christmas (sales figures) came! Christmas (sales figures) came!

Before we begin: This post looks at same-store sales, meaning the sales figures from all branches of a store that have been open for a year or more. These same-store sales are also known as "comps." Comps are handy because they tell you what shoppers are doing relative to the same time last year, and they tell you whether a retail chain's sales growth is the result of (presumed) repeat business or of new outlets opening. Got it?

The business of stuff

One of the growth industries of the aughties has been in the storage and organization of stuff. This was an industry born of Americans' patriotic shopping habits, and for many years, business has been good. You have your self-storage facilties (which store surplus stuff), you have your Container Stores, you have your makers of storage boxes and bins, you have your magazines like Real Simple and Organize.

Well, we'll have Real Simple. Organize is shuttering. This is not surprising news, but I did wonder: What if the magazine's demise isn't a casualty of a shoddy media strategy or soft ad market for shelter titles? Might it be an indicator of a shift away from the "Help! I have too much crap!" consumer mindset?

Retailers' resolutions: Just try to stay in business

"We will have a lot fewer stores by the middle of 2009," says Nancy Koehn, professor of business administration at Harvard Business School. "It's happening very, very quickly because of the financial crisis and the recession."

During the holiday season, when retailers typically generate as much as 40% of their annual sales, Americans cut their spending. Total retail sales, excluding gasoline and autos, were down between 2.5% and 4% this holiday season, compared with the same period in 2007, according to MasterCard Inc.'s SpendingPulse unit. That makes it among the worst holiday seasons of all time, says Michael McNamara, a vice president.

[...]

Analysts estimate that from about 10% to 26% of all retailers are in financial distress and in danger of filing for Chapter 11. AlixPartners LLP, a Michigan-based turnaround consulting firm, estimates that 25.8% of 182 large retailers it tracks are at significant risk of filing for bankruptcy or facing financial distress in 2009 or 2010. In the previous two years, the firm had estimated 4% to 7% of retailers then tracked were at a high risk for filing. Retailers are particularly vulnerable to a recession because of their high fixed costs.

-- "Retailers Brace for Major Change," WSJ, Dec 29, 08

Emphasis mine.

Media deathwatch: Domino magazine

Editor's note: This is crossposted from the Rage Diaries.

Dance like there's no one funding

Any dedicated Internet surfer is already acquainted with "Where the Hell is Matt?" We all learned that humanity can be united through goofy dance moves. But it took venture capitalists to determine that investment portfolios can also be bolstered with a little boogieing. First Round Capital released a video holiday card that shows the companies they've funded, and holy cats, I had never thought of beeper-wielding, Dockers-wearing C-level execs as "adorable" until I watched them try to dance.

I also figured that it might be interesting to list the companies in the video for posterity. We can see which ones are around this time next year, and which ones will have been given the market's equivalent of the stage hook at the Apollo.