Neiman Marcus names a new chief marketing officer and restructures staff to address the growing importance of e-commerce.
Kohl’s and Sears highlight their growing e-retail prowess to investors.
Two big retail chains emphasized their growing investments in e-commerce this week as they reported disappointing overall financial results.
Kohl’s Corp., which for the first time exceeded $1 billion in online sales in its latest fiscal year, projected another 40% increase in web sales in the coming 12 months and said it would shift capital expenditures to the web.
“We are going to reallocate our capital expense spending within our overall capital allocation plans,” Kevin Mansell, chairman and CEO, told analysts yesterday. “For 2012, we will fund our online, as well as our technology investments, at an accelerated pace from last year.” Kohl’s is No. 31 in the Internet Retailer Top 500 Guide.
Mansell did not provide details of how much more Kohl’s would spend on the web. Nordstrom Inc. last week disclosed it plans to double the web’s share of its capital budget to 30% and invest nearly $1 billion in e-commerce in the next five years. Nordstrom is No. 34 in the Top 500 Guide.
Kohl’s executives had good reason to spotlight last year’s 37% web growth to $1.02 billion from $743.4 million the prior year, as the chain’s overall results were far less rosy. For the fiscal year ended Jan. 28, total sales grew 2.2% to $18.8 billion and comparable-store sales increased only 0.5%. The fourth quarter was worse: Total sales decreased 0.3% to $6 billion and same-store sales declined 2.1%.
In much the same boat as Mansell was the chairman of Sears Holdings Corp., Edward S. Lampert, who outlined yesterday big strategic shifts in the face of disappointing results, while touting the retail chain’s progress online.
Online sales at Sears.com and Kmart.com increased 16% for the year, although only 1% in the fourth quarter, Sears reported yesterday in releasing fourth quarter and fiscal 2011 financial results. However, when including orders placed online for store pickup or in store for direct shipment to consumers, web sales for Sears increased 12.6% for the quarter and 19.4% for the fiscal year, which ended Jan. 28.
Sears, No. 7 in the Top 500 Guide, also noted that it began with the first quarter of its fiscal 2011 including online sales in its calculation of comparable-store sales. “The change resulted in a positive benefit of approximately 10 basis points and 39 basis points to total domestic comparable sales for the fourth quarter and the year, respectively,” Sears said in yesterday’s earnings release. Despite the boost from including growth in web sales, same-store sales for Sears and Kmart stores declined 2.2% for the year and 3.4% for the fourth quarter.
Sears’ total sales declined 2.6% from $42.7 billion to $41.6 billion for the year and declined 4.0% from $13.0 billion to $12.5 billion in the fourth quarter. The company booked a net loss of $3.14 billion for fiscal 2011 and $2.40 billion in Q4.
Lampert didn’t sugar coat the news in a letter to shareholders: “Our poor financial results in 2011, culminating in a very poor fourth quarter, underscore the need to accelerate the transformation of Sears Holdings,” he wrote. He then laid out a plan that includes selling 11 full-format Sears stores in shopping malls for $270 million and spinning off some 1,250 Sears Hometown, Outlet and hardware stores in a transaction expected to raise $400-500 million.
One of the few bright spots Lampert highlighted in his letter was Sears’ progress in becoming an integrated retailer, able to serve customers in physical stores, online and through the mobile channel. “How people shop today is changing and it isn’t just the younger generation that is benefitting from iPads, Facebook and online retail,” he wrote. “As the shopping and marketing tools become ubiquitous, easier to use and more integrated into our society, everybody’s lives are being impacted by them, young and old alike. We intend for Sears Holdings to be one of the companies that best serves our members and customers across these platforms and helps them make the transformation seamlessly.” Lampert, however, did not provide any details about plans for bolstering Sears’ online and cross-channel sales.
Kevin Lyons, division vice president for integrated retail at Sears will speak at the Internet Retail Conference & Exhibition 2012 on June 5 from 8:45 to 9:30 a.m. in a session entitled “Cross-channel commerce: Techniques and technologies to leverage.”