September 24, 2020

Saks Article

Here's an article that is making the rounds on Twitter this week (click here).

It's hard to know what you can "trust" on Fast Company. I sat in a meeting a few years ago where a Product Manager saw a great idea, hopped on the phone, called her assistant, and said "Contact Fast Company and get us an article about the concept." In other words, it is conceivable that somebody in PR thought it would be a great idea to have a President/CEO write an article that made the President/CEO look brilliant.

As far as Twitter was concerned, it was "Mission Accomplished". I started receiving feedback.

  • "You'll like this, it's a really nice piece of thought leadership and is spot on."
If you go back and read Hudson's Bay Company financial filings, you'll see that Saks comps were generally positive (+/- 3% or 3.5%) through 2018 and the first half of 2019 before wobbling in the six months prior to COVID devastation. But for the most part? Not bad!

That being said ... if the best you can hope for under the blueprint of the article (pre-COVID) is a two-year bump of +3.5% comps followed by wobbling and flat comps for six months, then question the blueprint.

There's a tone in the article.
  • "If you aren't as innovative as we are, the whole industry is going down because we all share traffic and you aren't holding up your end of the bargain."
This stuff is NOT EASY ... you don't take a giant retail company and just start posting +10% comps.

And internally, there are always forces that DO NOT WANT TO CHANGE. At all. They don't want to innovate. The article talks about the cycle within fashion companies of inventory management and markdowns and the drag on profitability ... well, if you've ever worked in an old-school fashion company, you know darn well that you hire people to maintain the red tape required to manage a new assortment that ultimately has to be marked-down and liquidated. You perpetuate the very dynamic you deride. That's part of the problem of trying to convert a bus to an RV while the bus is rolling down the highway at 65mph.

So, yeah, good article if you like retail theory.

If you are trying to implement the thoughts in the article, that's tough. Ask the President/CEO who wrote it. He's had five years to implement his ideas and prior to COVID he did post two years of positive comps followed by faltering / flat comps for a half-year, proving that even when you are in charge of the very strategies you advocate for an entire industry you still might not be successful.

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