Here, five major business stories dominating the fashion-industry conversation in March.
Trump’s Tariff Talk Spurs Fear of Trade Wars
President Donald Trump’s plan to impose steep tariffs on steel and aluminum imports sent shock waves throughout the global business community this month as countries began to prepare for a possible trade war with America.
Reports further suggested the administration was also considering a new set of measures targeting China. The proposed duties are intended to punish China for intellectual property abuses and could affect a range of industries — including footwear, which imports about 72 percent of its products from China.
“The American footwear industry is highly concerned with published reports that the Trump Administration is considering hitting U.S. footwear consumers and companies with new tariffs,” Footwear Distributors & Retailers of America president and CEO Matt Priest said in a statement. “Shoe tariffs are already among the highest placed on any product — almost 11 times higher on average than those on all other goods.”
Watch on FN
On Mar. 19, retailers such as Walmart, Macy’s, Levi’s and 22 others sent a letter to the president saying that while they support holding our trade partners accountable for their respective practices, the looming remedy will likely pose undue harm. n a separate letter, 82 footwear brands, including Nike, Wolverine Worldwide and Clarks, expressed “strong concern” about the tariff reports.
Two Top Nike Execs Exit Amid Reports of Behavioral Misconduct
An executive shake-up at Nike made waves this month. Just one day after the company announced the resignation of Nike brand president Trevor Edwards, reports surfaced that Jayme Martin, the firm’s VP and GM of global categories, was “forced out.” Nike later confirmed Martin’s exit.
The details surrounding both departures were not disclosed but the news came at the same time that an internal memo from Nike CEO Mark Parker signaled a crackdown on behavioral misconduct at the firm.
Claire’s Files Bankruptcy But Says Its Situation Is Different
After months of speculation, teen mall staple Claire’s Stores Inc. on March 19 filed for Chapter 11 protection in Delaware courts. The accessories store — known predominantly for its ear piercing business — joined an ever-growing list of teen mall favorites (Aeropostale, Bebe, BCBG, Wet Seal and Rue 21) that have taken their financial troubles to bankruptcy court in recent months. But, in a company statement, Claire’s sought to distinguish itself from its peers, stating that it is “utilizing the Chapter 11 process to effectuate a balance sheet — not an operational — restructuring.”
“Unlike other retailers that have come before it, Claire’s has commenced its restructuring process from a position of unique operational strength,” the retailer, which has been saddled with debt stemming from a private equity buyout in 2007, wrote. “Claire’s is growing, not shrinking, its business — the company expects its concessions business to grow by more than 4,000 stores in 2018.”
It also noted that its ear piercing business was less likely to fall victim to digital pressures as it “cannot be replicated online.”
Nordstrom’s Go-Private Plans Falls Through
After months of back and forth, the Nordstrom founding family’s plans to take the firm private came to an end this month. The special committee advising Nordstrom’s board for the potential transaction said on Mar. 20 that it had terminated talks with the Nordstrom family after the two parties were unable to come to an agreement on price.
The final gavel slam came just weeks after the special committee rejected the initial acquisition proposal of the group — comprising company co-presidents Blake Nordstrom, Peter Nordstrom and Erik B. Nordstrom; president of stores James Nordstrom; chairman emeritus Bruce Nordstrom; and Anne E. Gittinger — determining that the bid of $50 per share was “inadequate.”
Finish Line Lands in the Hands of JD Sports
After months of speculation about Finish Line Inc.’s future, the retailer announced its selling itself to European athletic retail giant JD Sports Fashion PLC in a $558 million deal. JD Sports will acquire 100 percent of the issued and outstanding Finish Line shares at a price of $13.50 apiece in cash. (Pentland Group is the majority owner of JD Sports, which operates more than 1,300 sports, fashion and outdoor stores across 12 countries.)
For JD Sports, the deal would give the European retail powerhouse a major foothold in the U.S. market, with a brick-and-mortar and online presence. The move came a few months after reports surfaced that Finish Line was in talks to sell itself to U.K.-based Sports Direct International PLC, a competitor of JD Sports.