Over the weekend, there were three major new stories in the world of eCommerce.
Kering Sells Its Final Non-Luxury Brand
Kering will sell off skatewear brand Volcom – its final non-luxury brand, and has confirmed the sale of fashion label Stella McCartney. Earlier in the year Kering announced plans to spin off PUMA in order to focus on becoming a pure-play luxury group.
In a statement, the group said:
“In accordance with Kering’s strategy to fully dedicate itself to the development of its luxury houses, Volcom no longer constitutes a core asset and Kering has initiated a disposal process"
Kering acquired Volcom in 2011 for $608 million.
Nine West Files For Bankruptcy
US-based retailer Nine West has sought bankruptcy protection, reports the Washington Post.
New York-based Nine West Holdings, owned by private equity group Sycamore Partners, filed the petition on Friday in Manhattan federal court, listing assets between $500m and $1bn and liabilities between $1bn and $10bn.
In a press release, Chief executive Ralph Schipani said:
“This is the right step to address our two divergent business profiles. We will retain our strong, profitable and growing apparel, jewellery, and jeanswear businesses and continue to operate them under a new capital structure so that we can leverage their existing strengths to drive even greater growth. Once we complete the reorganization process, our Company will have meaningfully reduced debt and interest costs and be well positioned for the future. At the same time, we are initiating a process to sell our Nine West and Bandolino footwear and handbag business and have a purchase commitment from a dedicated owner with the resources and know-how to support these businesses for long-term success"
Sucharita Kodali, a retail analyst for market research firm Forrester said:
“This is a brand that has really struggled to differentiate itself….The only bright spot in the footwear industry has been athletic wear, and that’s not what Nine West sells”
According to court documents filed in the U.S. Bankruptcy Court in New York, Nine West owes more than $1 billion to as many as 50,000 creditors.
Adidas To Close Stores To Focus On eCommerce
The CEO of Adidas has revealed plans for the sports brand to downsize its bricks and mortar offering to focus on eCommerce, reports Reuters.
In an interview with the Financial Times, Kasper Rorsted said “over time, we will have fewer stores but they will be better…Our website is the most important store we have in the world”. Currently, Adidas has 2,500 stores globally and 13,000 mono-branded franchise stores.
Mr Rorsted also unveiled plans to spend €900m this year, with the majority on logistics and infrastructure, such as fulfilment warehouses for online consumers.
Adidas group is hiring 200 staff and hopes to increase online sales to €4bn by 2020. Last year, their online sales rose 57% to almost €1.6bn.
The US is a key market for the group, however despite trying to increase profitability in the region, “we are not trying to get there too quickly,” says Mr Rorsted. “We’re taking a longer-term view”.
Innovation in eCommerce is key – brands who don’t evolve over time and instead choose to stick with what they've always done may fall irreversibly behind. Cross-border eCommerce allows brands to reach customers regardless of location, and retailers who do not unlock their websites to foreign shoppers will lose valuable revenue and loyalty.