Top brass from finance, fashion and retail put their heads together last Tuesday at “The Perfect Storm — How to Get Through It,” an industry conference hosted by consulting firm Emanuel Weintraub Associates at the Harvard Club in New York to strategize.
Founder and CEO Manny Weintraub opened the conference with a positive spin on consumer spending potential.
“Ninety-one percent of Americans still have jobs and incomes,” he told the crowd.
Other speakers struck an optimistic tone as well. Adam Rifkin, SVP of Barclay’s Capital Global Retail and Consumer Group, noted that many market watchers expect the economy to stabilize in the back half of 2009 and see modest growth in 2010. “Things will get better, and there will be a flurry of mergers-and-acquisitions activity,” predicted Rifkin. “Consumers are becoming more confident [in this environment] and are slowly starting to spend again on discretionary items.”
But that does not mean companies can afford to lose focus. “Maintaining market share, margins and cash flow is the name of the game,” Rifkin said. “The equity markets are rewarding higher stock prices for maintaining liquidity.”
Most market observers at the event agreed that the luxury market has taken one of the biggest hits in the down economy.
Gilbert Harrison, CEO of Financo Inc., said that in addition to the falloff in consumer spending, upscale companies have been hindered by longer product lead times, forcing them to anticipate demand five to six months in advance.
“Anyone who is not looking to compress their timelines is not maximizing their business,” said HSN CEO Mindy Grossman, adding that her team modifies plans “minute by minute” to exploit product that is trending up.
Brendan Hoffman made his first speech on behalf of Lord & Taylor since taking the helm as CEO in October 2008.
Hoffman said his goal to elevate the department store’s merchandise mix with more aspirational brands was sidelined as the economy tanked. “The immediate concern was all about cash management and preservation,” he recalled. “I had to balance the idea of trading up with the reality of the economy.”
The retailer and his team brought back some of the department store’s core brands, such as Liz Claiborne and CK Jeans, that had been eliminated or reduced during the rebranding.
In addition, the company has refocused its ad campaigns and organized vendor summits to create stability and encourage communication with customer and wholesale bases.
Hoffman, a veteran of Neiman Marcus, said he hopes Lord & Taylor’s relative value proposition can be a “soft landing spot [at a time] when shopping in a luxury department store doesn’t feel as appropriate.”