WEEKLY REPORT (Week 18, 2021)

North America

• Amazon poised to overtake Walmart as largest retailer by 2025: report - As e-commerce

expands at a blazing clip, Amazon is on track to pass Walmart as the largest U.S. retailer by 2025,
according to Retail Insight, the research arm of Edge by Ascential. The firm predicts Amazon's
gross merchandise value sales, buoyed by its third-party marketplace, will hit $631.6 billion in four
years as total online sales in the U.S. hit an estimated $1 trillion by 2025, Edge by Ascential said in
a press release. During that time, the firm estimates Walmart's domestic sales will grow at an
annual rate of 3.9%, hitting $523.3 billion by 2025.

• Gap is taking its Athleta workout brand to Canada, rival Lululemon’s home turf - Gap
announced it will take its Athleta brand into Canada, rival Lululemon’s home turf. It marks Athleta’s
first expansion outside the United States. Athleta will launch online in the Canadian market this
summer, followed by the opening of retail stores in North York, Ontario, and West Vancouver,
British Columbia, this fall. Gap announced plans Tuesday to sell its Athleta brand in Canada, rival
Lululemon’s home turf. It marks the women’s athletic apparel brand’s first expansion outside the
United States. Gap said Athleta will launch online in the Canadian market this summer, followed by
the fall opening of company-owned retail stores in North York, Ontario, and West Vancouver,
British Columbia. The move is part of Gap’s overall strategy to grow Athleta to the point that it’s
bringing in $2 billion in net sales annually by 2023. Athleta surpassed the $1 billion mark last year,
with its sales up 16% from 2019 levels. Gap’s total sales for 2020 amounted to $13.8 billion.
“International expansion is a key component of our growth strategy,” Athleta CEO and President
Mary Beth Laughton said in a statement. The Athleta brand — like Lululemon and Nike — has
been a pandemic beneficiary, as more women look for comfortable clothing such as leggings,
stretchy pants, tank tops and soft pullover sweaters to wear at home during the health crisis. For
Gap, the Athleta banner provides a pocket of growth, as its namesake Gap brand and Banana
Republic have struggled to resonate with consumers. Athleta is also the least promotional of Gap’s
brands, which helps drive profits higher. Gap could face hurdles as it takes Athleta into Canada.
Other U.S. retailers have stumbled in the country in the past. Target shuttered all of its Canadian
stores less than two years after opening them. Best Buy has also closed many of its stores in the
country. Lululemon’s success there provides Athleta with promise. Lululemon was founded by Chip
Wilson in Vancouver in 1998. The brand started as a yoga studio, then became a stand-alone
store in 2000.

• 3 Likely Winners in the Apparel Retailing Boom - The recovery in this industry could be epic
over the next year. Many retailing stocks were hit hard during the pandemic. Unlike big-box peers
that were deemed essential, clothing sellers had to shut down most of their stores during COVID-
19 lockdowns. These customer traffic restrictions continued into early 2021 even as the global
vaccine rollout gained steam. But there's a rebound in sight. Recent retailing estimates from the
U.S. Census Bureau showed that apparel sales jumped in March, rising 18% compared to
February and doubling compared to a year earlier. Let's look at why Nike (NYSE:NKE), TJX
Companies (NYSE:TJX), and Target (NYSE:TGT) are all set to benefit from this retailing boom.
o Nike - In mid-March, Nike announced a surprise sales slump that helped push the stock
lower for 2021 even as the market sets new highs. Revenue fell 1% in the period that
ended in late February, marking a jarring change from the prior quarter's 7% increase.
Nike executives said at the time that the drop had nothing to do with demand, which
appeared to be robust. The chain simply had some shipping challenges related to COVID-
19 that should be resolved rapidly, they predicted. A quick return to growth in the U.S. in
March should help Nike report sharply higher sales this year. But the better news for

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 investors is that profit margin is rising thanks to increasing prices and a higher proportion
of e-commerce sales. These trends should all contribute to great returns for shareholders
as the pandemic threat fades.
o TJX Companies - Off-price retailing giant TJX Companies was heading into the pandemic
with the wind at its back. It had steadily gained market share over the prior decade and
was set to become a Dividend Aristocrat with its 25th consecutive payout raise on the way
in 2020. COVID-19 derailed those trends, mainly thanks to prolonged store shutdowns.
TJX has since restored its dividend, but investors are still waiting for that growth rebound.
Comparable-store sales fell 3% in the fiscal fourth quarter, a period during which 13% of
its global store base was closed. Reopenings and improving demand could have sales
quickly returning to normal levels over the next few months. The retailer should also get a
big boost from its home furnishings offerings, as sales in this niche are booming. Look for
CEO Ernie Herrman and his team to sound an optimistic tone on these points in the next
earnings report in late May.
o Target - Few retailers capitalized on consumer demand shifts during the pandemic as well
as Target did. The retailer captured billions of dollars in additional market share by leaning
on its omnichannel selling platform and quickly changing merchandising strategies as
consumers first demanded essentials before loading up on premium products like home
furnishings and electronics. An apparel boom might add more fuel to the fire. The clothing
segment accounted for almost 19% of Target's business before the pandemic scrambled
demand trends in 2020 and pushed it down to 16% of sales. A sharp rebound in 2021
would support another year of impressive sales gains. And Target's many exclusive
brands will allow it to capitalize on the increased store traffic. It's likely that any retailing
rebound will be bumpy, and so each of these stocks is in for a bumpy few quarters. But the
businesses entered the pandemic with strong momentum and are poised to exit the crisis
with even better operating results.

• US apparel marketer Carter's Q1 FY21 sales grow 20% to $787 mn - Carter's, a US-based
marketer of apparels for babies and young children, has posted 20.0 per cent sales growth to
$787.4 million in its first quarter (Q1) FY21 ended on April 3, 2021, compared to the sales of
$654.5 million in the same quarter previous fiscal. The company’s net income for Q1 FY21 rose to
$86.2 million (Q1 FY20: loss $78.7 million). Gross profit for the quarter increased to $391.7 million
($228.3 million), while selling, general and administrative expenses were $271.9 million ($269.8
million). The company’s operating income grew to $127.5 million (operating loss: $78.5 million). US
retail sales for the reported period increased to $407.0 million ($320.7 million), whereas US
wholesale sales jumped to $283.4 million ($252.1 million). International sales rose to $96.9 million
($81.6 million).

• S&P turns positive on Macy's as apparel, economy gain steam - S&P Global Ratings raised its
outlook for Macy's from negative to positive, signaling that the retailer could get an upgrade from
its current B+ credit rating in the coming months. The analysts also cited lower-than-expected
profit and sales declines at Macy's in the fourth quarter as well as momentum going into Q1. At the
outset of 2020, Macy's had deep, evident troubles amid the persistent doldrums of the department
store sector. After the holiday season of 2019, the retailer posted a small sales decline for Q4 and
unveiled yet another turnaround plan aimed at changes in retail that many speculated were leaving
Macy's behind. The year turned out so much worse and more transformative than anybody could
imagine. As the pandemic took hold, Macy's, along with its peers, shuttered stores and hoarded
cash. Massive sales declines persisted through the year, even after retail reopened. For 2020,
Macy's racked up a net loss approaching $4 billion. At the same time, Macy's business went
through an accelerated evolution that the company had more or less planned on going into that
year. In Q4, Macy's digital sales rose by 21%, reaching 44% of net sales. Macy's CEO Jeff
Gennette told analysts in February that management expects $10 billion in sales to come from the

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 digital channels by 2023, according to a Seeking Alpha transcript. Over the course of 2020, Macy's
was downgraded by S&P multiple times. Along with vaccines, multiple rounds of federal stimulus
have lifted consumer spending. Retail sales overall spiked more than 28% year over year in
March, and apparel sales rose by 105%, putting them at pre-pandemic levels. S&P's Song and
Wyeth noted that Macy's, as digital sales expanded, boosted its omnichannel capabilities during
the year, including enhanced buy online, pick up in store and curbside pickup. That puts it in a
stronger position going forward. The analysts also noted that Macy's picked up new customers as
competitors J.C. Penney and Belk filed for bankruptcy, giving the retailer an opportunity to expand
its market share, especially in digital shopping. All of which is good news. But competitors in
department stores and apparel retail have fallen into bankruptcy for a reason — persistent traffic
declines at malls and intense competition from online and discount players has wreaked havoc on
a wide swath of the industry. Macy's has responded with plans to trim its footprint, expand into strip
centers, double down on its off-price Backstage unit, and keep investing in digital and private label,
among other efforts. Time will tell if those efforts are enough.

• Macy’s expects strong growth in home textiles this year - Bronze membership is netting up to
700K new customers per month. Macy’s core customers are re-engaging, and it is continuing to
land new customers in the first quarter. “We’re definitely seeing benefits from the stimulus
package. That was in full force over the past six weeks,” chairman and CEO Jeff Gennette told
analysts during last week’s JP Morgan 7th Annual Retail Round-Up. Vaccine rollouts are also
benefitting the business, though the impact varies by market, he said at the virtual event. Average
spend from the core customer – defined as the Macy’s credit card loyalty base – is up about 7%
so far this year compared to the same period in 2019. While the overall number of core customers
shopping Macy’s remains lower than it was in 2019, he company has seen a 19% jump in new
customers – particularly driven by digital. Retail closures are also providing new customers in
select categories at Macy’s and Bloomingdale’s.

• JCPenney unveils modern private label home brand - Loom + Forge encompasses bedding,
bath, window, tabletop and décor. JCPenney has now added another comprehensive home brand
to its private label portfolio. Loom + Forge marks the retailer’s most modern home collection to
date, the company said. Product categories include indoor and outdoor decor, bedding, bath,
throws, dec pillows, window coverings and tabletop. The brand is being offered in stores and
online. The bedding and bath assortment features Oeko-Tex-certified materials, all-cotton bedding
and Turkish cotton bath towels. Across the hard and soft home assortment, Loom + Forge is
designed with warm finishes, neutral shades and an eye to detail. JCPenney has been on a
branding streak, introducing Fieldcrest as an exclusive brand last month and amplifying the
assortments for its Linden Street and Liz Claiborne brands. The company said it is teeing up more
new launches this year in national and private brands across all categories.

• Lowe’s will leverage new brand acquisition to advance Total Home strategy - Stainmaster
joins the home improvement giant's private label portfolio. Lowe’s has acquired the Stainmaster
brand and is aiming to extend its high-performance attributes into other product categories. The
retailer has had exclusive distribution rights for Stainmaster carpeting in the home improvement
channel since 2010. The brand now becomes part of Lowe’s private label portfolio. The purchase
includes all brand-related intellectual property from Stainmaster’s parent company, Invista, and all
related trademarks and sub-brands.

• Here's My Top Stock to Buy in May - This online retailer should surge on pent-up demand.
There will soon be rise in pre-pandemic activities as we near the end of the crisis, and one stock
that looks poised to capitalize on this rebound is Revolve Group (NYSE:RVLV). What is Revolve
Group? - Revolve Group is an online apparel retailer targeting millennials and Gen Z women. It
uses online influencers to market its product and to connect with customers, and it sees its

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 relationships with influencers as a competitive advantage. It operates two platforms: Revolve, a
constantly refreshed and curated assortment of premium apparel; and Forward, which carries
emerging luxury apparel brands. Revolve was founded in 2003 and held its IPO in 2019. Before
the pandemic, revenue was growing steadily in the low 20% range each quarter, a strong growth
rate for an apparel retailer. The company is solidly profitable, having generated a profit for at least
the past three years, and it grew its operating profit 27% to $61.1 million last year, even as
revenue fell 3% to $580.6 million. Management effectively controlled inventory and limited
markdowns, leading to a strong bottom-line performance as the company also dealt with significant
headwinds from the pandemic, which has crushed apparel sales across many categories, even for
online retailers. Why it's a great time to buy - The factors that hampered Revolve during the
pandemic make it a great opportunity in the recovery. The company's biggest category is dresses,
and a substantial portion of its sales is focused on "occasion-wear" -- clothing purchased for social
events like weddings, parties, concerts, and vacations. These types of gatherings have essentially
been nonexistent over the past year due to social-distancing protocols, but that's about to change.
There are already signs the apparel industry is raring for a comeback. According to the Census
Bureau, sales in the clothing category more than doubled year over year in March, a clear sign
apparel retailers benefited from stimulus checks as consumers are ready to shop for clothes again.
After all, in addition to the need for new duds for social occasions, many Americans have gained or
lost weight during the pandemic, and others are eager to refresh their wardrobe to mark a new
stage of life after the crisis. There is plenty of anecdotal evidence to support this. Retailers like
Madewell and Anthropologie are reporting a spike in demand for dresses. Fashion trends are
leaning toward bright colors and funky patterns, reflective of a sense of optimism and celebration
about life after the pandemic.

• Joe Fresh and Roxy Earle Launch Limited-Edition Swimwear Capsule Collection - Joe Fresh
is excited to announce a limited-edition swimwear capsule collection with Roxy Earle, Founder of
Luxurious Roxy and Body Positive Activist. The capsule collection will feature five pieces, including
a one-piece swimsuit, two-piece bikini, tunic cover-up and sandals, available in sizes XS-3X. The
limited-edition capsule collection will be available online and in select retail stores beginning May
13, 2021. The one-piece swimsuit retails for $39.00 CAN, the two-piece bikini retails for $29.00
CAN for the top and $24.00 CAN for the bottom, and the tunic cover-up retails for $24.00 CAN.
High-res images of the Roxy Earle Limited-Edition Swimwear Capsule.

• Northern Roots Boutique partners with California-based apparel company - Northern Roots
Boutique is one of 87 independent clothing shops spread out across the county that has been
selected to partner with Liverpool Los Angeles in the company’s Destination Liverpool Shops
program. A Grand Forks boutique is partnering with a Los Angeles-based fashion apparel
company to bring the brand’s clothing to the local market, while receiving business mentorship.
Northern Roots Boutique is one of 87 independent clothing shops spread out across the county
that has been selected to partner with Liverpool Los Angeles in the company’s Destination
Liverpool Shops program. The local boutique was selected from a pool of 300 candidate shops
based on sales, and recommendations from suppliers. Shops included in the program will carry a
full line of Liverpool’s clothing for both men and women. In turn, the California retailer will provide
those shops with business mentorship in areas including, marketing, visual merchandising
enhancements and independent business analysis. Being named a Destination Liverpool Shop
also introduces local boutiques to nationwide community of fashion retailers. Liverpool is a
premium casual clothing maker for men and women. The company launched the program with
local boutiques that have a focus on customer service. “

• US Q1 in brief – Carter’s, Steven Madden, Crocs - The latest first-quarter filings from US
apparel and footwear brands and retailers show some companies are beginning to recover from
the market disruption caused by the Covid-19 pandemic. However, figures are mostly in

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 comparison to the period when the market began to first feel the impact of the global coronavirus
pandemic when stores began to close or reduce their opening hours.

• Crocs shares soar as shoemaker raises 2021 sales outlook, sees growth of 40% to 50% -
Crocs reported record first-quarter sales and raised its sales outlook for the full year. CEO Andrew
Rees said demand for the Crocs brand is “stronger than ever” across the world. Some have called
Crocs the “it” shoe of the pandemic, as consumers have been seeking comfort at home. But
celebrities like Justin Bieber have also helped to boost the rubber clog’s fashion status. Crocs
shares shot up more than 16% Tuesday after the shoemaker increased its revenue outlook for the
full year and reported record first-quarter sales.

• Cranberry-based retailer rue21 expands plus-size clothing options - As many retailers scale
back due to COVID-19, Cranberry-based retailer rue21 is expanding its clothing options to make
its merchandise more size inclusive. The retailer, which caters to shoppers ages 15-25, announced
earlier this month that it’s converting space within 36 stores — including its East Coast flagship in
The Mall at Robinson — to add special sections for plus-size styles. About 65% of its more than
650 stores will now offer clothes in sizes XS through 4X. Growing its plus-size fashion inventory
has become a priority for rue21. In December, the retailer hired Candace Kearney, a retail veteran
from plus-size clothing chain Torrid, to lead its plus-size and dress categories. It’s also built a plus-
size team based in Los Angeles. Junior apparel merchants used to handle plus-size buying for
rue21.

• Retail Industry in 2021: The Complete Investors Guide - In March of last year, when the
coronavirus pandemic’s stark reality came into focus, not only did stocks plunge, we started to see
businesses shut down due to orders from local governments. This had a tremendous impact on
retail stores. Aside from the top big box stores with e-commerce capabilities already in place, like
Walmart (WMT - Get Rating) and Target (TGT - Get Rating), many iconic retailers that relied on
foot-traffic to sell their goods saw their fortunes plummet. Companies that had been around for
decades, like J.C. Penney, Brooks Brothers, and Lord & Taylor, fell into bankruptcy. Though much
of the population already used e-commerce to buy some of their purchases, COVID-19 pushed
consumers to become even more reliant on online retailers. One of the biggest beneficiaries of
this was Amazon.com (AMZN), whose stock doubled between March and September 2020.
Beginning in November 2020, when Pfizer (PFE) and BioNTech (BNTX) announced their vaccine
candidate results, the stocks of stores that heavily rely on in-store customers, like Macy’s (M) and
Nordstrom (JWN), started to rally. As a result, the SPDR S&P Retail ETF (XRT) has significantly
outperformed the broader market and technology stocks. As more people receive the vaccine, a
full reopening of the economy is likely to benefit both physical and online retail stores. The
Business Research Company forecasts the global retail market is expected to grow from $20.29
trillion in 2020 to $22.43 trillion in 2021, making the retail industry one to watch in 2021. What is
the Retail Industry? - The retail industry is composed of companies that sell final products to end-
user consumers. The industry is part of both the consumer staples and consumer discretionary
sectors and includes everything from clothing and department stores to home improvement and
auto parts stores. On the consumer staples side, retail companies include discount stores such as
Dollar General (DG - Get Rating), grocery stores like Albertsons (ACI), and wholesale clubs like
Costco (COST - Get Rating). The cyclical sector includes stores that sell apparel, luxury goods,
and specialty products such as electronics and home furnishings. A Changing Industry - The retail
industry has seen its share of changes over the past few decades. Sixty years ago, there were
many mom-and-pop stores and just a few department stores in major cities. Then came big box
stores, such as Walmart (WMT), that made it harder for small stores to compete. We also saw
large specialty chains such as Home Depot (HD) and Lowes (LOW) that put small specialty stores
out of business. Many department stores, that were successful for decades, were located in malls,
which were very popular when I was young, but malls have seen less foot traffic over the past ten
years. Many of these stores, like Sears, didn’t successfully transition to growing their online

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 presence quickly enough, and are struggling now. Traditionally, if you wanted to purchase a
product, you would go to the store, pick it up and pay for it. But now, online shopping has changed
retail. All you need to do is select a product on a store’s website, pay for it, and it’s shipped to your
home. You never have to leave your house. Not only is the ease of e-commerce beneficial for the
consumers but the retailers benefit as well. Stores don’t need to pay the overhead costs of
maintaining as many, or any, physical stores. Impact of COVID and the Future of Retail - While the
switch to e-commerce started years before the pandemic, it only accelerated during it. According to
Digital Commerce 360, in 2020 consumers spent $861.12 billion online with U.S. merchants, up an
incredible 44.0% year over year. However, as more people are vaccinated in 2021, and venture
out of their homes, physical retailers are expected to benefit. eMarketer predicts that worldwide
ecommerce growth will fall by 14.3% in 2021. That’s because of a brick-and-mortar rebound and
so much growth was pulled forward to 2020. Stores with both a physical and an online presence,
like Target (TGT - Get Rating) and CVS Health (CVS - Get Rating), survived and even thrived
during the past year, due to their omnichannel capabilities, such as order online and curbside
pickup. Stores like these should continue to see gains even after the COVID-19 pandemic is
behind us. That’s because we live in a society where people want things right away and aren’t
willing to wait a day(s) to have them shipped. For example, if you have a bad headache and need
some Tylenol, chances are you’ll probably drive to a store, such as Rite Aid (RAD), and get it right
away. Also, people enjoy the experience of going to stores, walking down the aisles, and
looking/touching the products they’re considering buying. This is simply something that e-
commerce-only companies cannot match.
o Target Corporation - TGT is one of the largest discount retailers in the country, with about
1,900 stores in the U.S. While the company is reporting its latest earnings results next
week, its previous quarter was strong as earnings and revenues outperformed estimates.
During the quarter, online and in-store sales rose 20.7%, while digital sales surged 155%.
The company’s curbside pickup was very popular, increasing by more than 500%.
Furthermore, its home delivery service, Shipt, increased by nearly 280%. The company is
benefiting from a trend in consumers shopping at discount stores that should continue for
the foreseeable future. Its same-day services such as Drive Up & Pick Up are bringing
more customers to their stores. Its partnerships should further enhance its product
offerings, such as its latest partnership with Ulta. TGT is also increasing its private label
products and its Food & Beverage business, which should aid growth. TGT has a Strong
Buy Rating in our POWR Ratings system. The company has a Growth Grade and Value
Grade of B, indicating that its growth prospects are not only strong, but it’s trading at an
attractive valuation. Plus, analysts love the stock with a Sentiment Grade of B. If you want
to know its Quality, Momentum, and Stability Grades, you can find them here. The
company is also ranked #1 in an A-rated industry, Grocery/Big Box Retailers.
o Walmart Inc. - While TGT is large, WMT is the world’s largest retailer. It operates Walmart
Stores, Supercenters, and Sam’s Club locations in the United States. It also has a fast-
growing e-commerce business, which includes Walmart.com and Jet.com. In fact, WMT is
even gaining steam on AMZN in the e-commerce space. The retailer offers two-day
shipping on many items to any customers, something that requires membership on AMZN.
Like TGT, WMT’s omni channel platform will keep bringing in customers. The company
launched its Walmart+ subscription delivery service in September, which is priced at
$98/year. While you don’t need the membership to get free two-day shipping, the
membership provides free next-day and two-day shipping with no order minimum. It also
offers free delivery from your store. Plus, WMT now also provides healthcare & financial
services, including insurance. WMT has an overall grade of B, which translates into a Buy
in our POWR Ratings system. It also has a Value Grade of B, which is not surprising given
its forward P/E of 23.75. The company has a Quality Grade of B, meaning it has a healthy
balance sheet. As of its most recent quarterly report, the company had $14.3 billion in
cash, compared to $4.6 billion in short-term obligations. We also provide Growth,

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 Momentum, Stability, and Sentiment grades for WMT, which you can find here. WMT is
ranked #10 in the same A-rated industry as TGT.
o Costco Wholesale Corporation - While TGT and WMT are two of the largest and most
well-known discount stores, COST is one of the most-well known warehouse clubs. A
warehouse club is a membership-based store where customers can purchase bulk items,
which provides substantial savings. Customers can also access COST’s selection of
branded and private label products in an assortment of categories. The company and its
stock fared quite well over the past year. Its stock was up 32.7% last year. While the stock
has fallen back some this year, the company just reported massive numbers for January.
The company’s comparable traffic rose 5.1% in the U.S, and adjusted comparable sales
surged over 15% year over year. The company continues to add new stores, and with a
very loyal customer base (90% membership renewal rate), I don’t see any reason why the
company won’t see continued success. The company has an overall grade of B or a Buy
Rating in our POWR Ratings system. It also has a Value Grade of B, which means you
can pick it up at a reasonable price. While its P/E is slightly elevated, its Price to Sales is
quite low. COST also has a Sentiment Grade of B, indicating that it is well liked by Wall
Street Analysts. According to the StockNews Price Target feature, twenty-two out of thirty-
four analysts rate it a Buy or Strong Buy. Based on its average price target, the stock has
a potential upside of 14%. If you would like to know how COST fares in its Growth,
Momentum, Stability, and Quality Grades, click here. Similar to TGT and WMT, COST is in
the A-rated Grocery/Big Box Retailers industry. It is ranked #11 in the industry.
o Dollar General Corporation - WMT and TGT may be the biggest discount stores, but DG
has some of the best prices. It is the largest dollar store chain in the U.S. by revenue and
second-largest by store count. The company has a long history of consistent sales and
earnings growth in both healthy and challenging retail climates. So, it was no surprise that
the company performed well in the pandemic. The company has expanded into e-
commerce with DG Pickup, which should only bolster its growth story and even help it
compete with the big boys (TGT - Get Rating). DG opened 1,000 new stores last year and
plans to open more than that this year, which should further aid growth. The company’s
DG Fresh initiative, which includes adding more frozen and chilled products to its stores,
should also bring in more customers. Stores are located in thinly populated areas where
consumers can’t access the big box stores, so DG stores should see continued demand.
The company is rated a Buy in our POWR Ratings system. Like many of the other names
on this list, DG has a Value Grade of B. Even with all the success, it has seen, it is still
trading at a P/E under 20. DG also has a Quality Grade of B and a Sentiment Grade of B.
The company has a strong balance sheet with a current ratio of 1.3 and is quite profitable
with a return on equity of 36.5%. Analysts are fans as well, with twenty-three out of twenty-
nine rating it a Strong Buy or Buy. We also grade DG based on Growth, Momentum, and
Stability. You can find those grades here. DG is ranked #14 in the Grocery/Big Box
Retailers industry.
o CVS Health Corporation - CVS is one of the largest healthcare companies in the U.S. and
one of the most popular drugstores. As I’ve written about before, I believe the vaccine
rollout will benefit pharmacies such as CVS. When a customer goes to CVS to get their
free vaccine, they are likely to purchase other items after getting their shot. Jeffries analyst
Brian Tanquilut recently upgraded CVS to a Buy and believes that the company could see
an additional $1 billion in profits over the next year. While the company’s integration with
Aetna will certainly provide more free cash flow, I am more bullish on its efforts to expand
its offerings in its stores. I believe it’s HealthHUB concept could be a game-changer. While
many of its stores already offered a MinuteClinic, HealthHub will add care concierges,
nurse practitioners, and dietitians to its offerings saving consumers a trip to the hospital
and providing a one-stop shop health center. CVS is rated a Buy in our POWR Ratings
system. The company has a Value Grade of A, making it a tantalizing stock to consider. Its
forward P/E is only 9.32, and its Price to Sales is only 0.3. Not too bad for a company that

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 has seen fairly stable revenue growth. This leads us to its Stability Grade of B. Not only
has the company shown steady growth, but its stock’s price has not seen the high volatility
that a lot of other stocks have shown over the past year. If you’re interested in seeing
CVS’s Growth, Momentum, Sentiment, and Quality Grades click here. CVS is ranked #1 in
the B-rated Medical – Drug Stores industry.

• Retail stocks surge as Florida and New York announce plans to lift Covid restrictions - A
number of retail stocks surged Monday (03-May), as investors look for ways to buy into the
economy reopening. Shares of the department store chain Dillard’s closed up nearly 10%. Gap
shares hit a 52-week high of $37, but settled at $35.47, a 7% gain for the day. Macy’s, Nordstrom,
Kohl’s and others also ended the day higher. Shares of the department store chain Dillard’s closed
up 9.7%. Gap shares hit a 52-week high of $37, but settled at $35.47, a 7% gain for the day.
Macy’s closed up 8%, while American Eagle and Kohl’s gained 5%. Nordstrom and Urban
Outfitters shares added 6%. Citing data from NPD Group, Wissink noted that 47.5% of consumers
in the U.S. are planning to purchase apparel in the next 60 to 90 days. Gap also saw a lot of
activity in its $35 call options, which are set to expire in May. Call options give investors the right,
but not an obligation, to buy shares at a specific price by a stated time. The company is set to
report first-quarter earnings on May 20. Gap shares have risen more than 75% since the start of
the year, as the company embarks on a turnaround effort. The retailer has been closing stores of
its slower growing brands Gap and Banana Republic and expanding its faster ones such as
Athleta. It recently formed a partnership with rapper Kanye West.

• US e-commerce sales growth projected to continue in 2021: report - Consumer purchasing

habits from 2020 could continue to linger in 2021. A new report from eMarketer projects that retail
e-commerce sales in the U.S. will increase by 13.7% to $908.73 billion — lower than last year's
18% to $709.78 billion surge, but still exceeds pre-pandemic estimates of 12.8%. The report
predicts that apparel and accessories e-commerce sales will grow by 18.9% once the coronavirus
pandemic subsides, followed by food and beverage (18.1%) and healthcare, beauty and personal
care (16.1%). Per eMarketer's projections, the top two categories that will generate the most e-
commerce sales in 2021 will be books, music or video (69.1%) and computer and consumer
electronics (53.2%). But toys and hobbies will take the next top spot in 2022. Now that the
coronavirus pandemic has shifted more consumer spending online, Amazon has done particularly
well during the crisis. Per eMarketer's findings, Amazon generates more than a fourth of online
sales in the U.S. for every category besides auto and parts. Most of the e-commerce sales for
books, video and music as well as computers and consumer electronics are transacted through the
e-commerce titan, eMarketer said.

• US clothing retailers see sales rebound in March - US retail sales rebounded with huge gains
in March after new government stimulus cheques and increased vaccination against Covid-19
encouraged shoppers to get out and spend – all of which helped to boost demand for clothing.
Apparel retailers saw sales rise 18.3% month-on-month in March, according to data released by
the US Census Bureau. Sales soared by 101.1% compared to the same period a year ago when
retailers across the US began to shutter stores in an attempt to stem the spread of coronavirus.
Overall retail sales during March were up 9.8% seasonally adjusted from February and up 27.7%
year-on-year. That compares with a monthly decrease of 2.7% and a yearly gain of 6.7% in
February. Despite occasional month-over-month declines, sales have grown year-over-year every
month since June 2020, according to Census data. Ken Perkins, president of research firm Retail
Metrics, says consumers "blew away" the Street's estimates of a 6.1% month-on-month increase,
as stimulus cheques layered on top of an already high savings rate meant shoppers were flush
with cash. "Our store checks throughout the month found increasing traffic at major big-box chains
like Target, Best Buy, Lowe's, Home Depot, Dick's Sporting Goods, with more modest traffic gains
at mall-based apparel retailers such as American Eagle, Urban Outfitters, Holllister (ANF), and Old

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 Navy (GPS)." National Retail Federation (NRF) chief economist, Clothing and clothing accessory
stores were up 18.3% month-over-month seasonally adjusted and up 104.6% unadjusted year-
over-year. Sporting goods stores increased 23.5% month-over-month seasonally adjusted and up
78.2% unadjusted year-over-year.

• Naked Brand Group vs. L Brands: Which Intimate Apparel Stock is a Better Buy? - Since
these companies are increasingly investing in e-commerce platforms and specialty retail stores, we
believe they are well-positioned to see strong sales in the coming months. NAKD has gained
38.5% over the past nine months, while LB has returned 168.5% over the same period. In terms of
their past year’s performance, LB is the clear winner with 454.3% gains versus NAKD’s negative
returns. But which of these stocks is a better pick now? Let’s find out. Latest Movements - In
February, NAKD signed a definitive agreement to price a $100 million private placement of
restricted ordinary shares. The company expects to use the offering’s gross proceeds to accelerate
the development of its digital platform and to support acquisitions of existing e-commerce brands.
In March, LB’s board of directors authorized the repayment of $1.035 billion of debt through the
call of $285 million of outstanding bonds due 2022, and $750 million of the outstanding bonds due
2025. The company believes that this leverage reduction will enhance shareholder value. Recent
Financial Results - NAKD’s trailing-12-month revenues was $82.54 million, while its trailing-12-
month gross profit was $33.99 million. However, the company reported negative EBITDA of $25.61
million. Furthermore, NAKD generated a $18.10 operating loss and a $44.03 million net loss. In
the fourth quarter, ended January 30, 2021, LB’s total Bath & Body Works revenues increased
21.8% year-over-year to $2.72 billion. Its Victoria’s Secret Direct sales rose 32.7% from its year-
ago value to $831.1 million. The company’s gross profit rose 28.6% from the prior-year quarter to
$2.31 billion. LB’s net income for the fourth quarter was $860.33 million, compared to $192.26
million for the same quarter of 2019. Past Financial Performance - LB’s total assets increased at a
12.4% CAGR over the past three years. In comparison, NAKD’s total assets declined at a 0.9%
annualized rate over this period. Profitability - LB’s trailing-12-month revenue is significantly higher
than NAKD’s. LB is also more profitable, with a gross 47.3% profit margin versus NAKD’s 41.2%.
Also, LB’s levered free cash flow margin and net income margin of 14.4% and 7.1%, respectively,
compare favorably with NAKD’s negative returns. Also, LB’s $2.04 billion cash from operations
billion compares favorably with NAKD’s negative cash from operations of $6.51 million. Valuation -
In terms of trailing-12-month EV/Sales, NAKD is currently trading at 6.72x, which is 232.7% higher
than LB, which is currently trading at 2.02x. But LB’s trailing-12-month Price/Sales of 1.55x is
much higher than NAKD’s 0.10x. POWR Ratings - LB has an overall B rating, which equates to a
Buy in our proprietary POWR Ratings system. However, NAKD has an overall D rating, which
translates to Sell.

• Bangladesh Garment Makers Settle With Sears Over $40 Million In Canceled Orders -
Bangladeshi garment suppliers—battered by the pandemic and the unethical business practices of
Western clothing giants—have settled with one of their biggest tormentors: Sears. The crumbling
retailer left its manufacturers with stacks of its clothing and unpaid bills last spring and has stiffed
them multiple times before as it muddled through ugly bankruptcy proceedings. According to
attorney Joseph E. Sarachek, whose firm represented the 21 Bangladeshi factories in a $40 million
lawsuit filed against Sears last June, his clients have reached a settlement with Transformco, the
privately-held company set up by American billionaire Edward Lampert’s ESL Investments hedge
fund to acquire Sears and Kmart out of bankruptcy last year. “The suppliers were obviously thrilled
that we got them a significant return,” says Sarachek. Although details of the settlement are
confidential, one impacted supplier, Fahim Iqbal, the director of Dhaka-based Patriot Eco Apparel,
says the settlement reached was only around 10% to 15% of the total amount owed by the Sears’
owners to each supplier. According to Sourcing Journal, payouts to the impacted factories have so
far amounted to $6.3 million of the $40 million total. In his eyes, Mr. Iqbal says suppliers have lost
once again: “The bottom line is there wasn’t really a victory,” he writes via email. Sears is far from

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 alone in shortchanging suppliers during the pandemic. Last spring, when the pandemic hit, scores
of major brands and retailers, including Forever 21, Ross Dress for Less, The Children’s Place,
Kohl’s KSS +5.4%, Global Brands Group and Arcadia (owners of Topshop), refused payment to
factories on $40 billion worth of completed goods, leaving factories facing down bankruptcy and
pushing garment workers out onto the street without pay in some instances. The cancellations
“contributed to an evolving humanitarian disaster in Bangladesh and elsewhere in Asia,” according
to lawyers representing factory owners. But Sears pushed suppliers to a breaking point after the
company went through bankruptcy and factories were left without payment on completed inventory
multiple times. “They lost money before the bankruptcy. They lost money in the bankruptcy, and
then they were sued by the bankruptcy estate,” says Sarachek. The Bangladeshi suppliers who
filed suit over the canceled orders, some of whom were owed as much as $6 million apiece for
clothing they’d already sewn and shipped for Sears last spring, received initial payments from the
settlement last September and are continuing to receive payouts. Unfortunately, Sarachek says
he’s still working through complaints from over 100 factory owners who are owed tens of millions of
dollars by other large retailers, including Forever 21 and Global Brands Group, a subsidiary of
Hong-Kong based Li & Fung and makers of brands like Sean Jean, Katy Perry, and Jones New
York. Li & Fung, the world’s largest apparel sourcing agent, likewise appears to have acted as a
middleman to produce some of the inventory for Sears. These companies did not return requests
for comment. While over two-dozen large brands, including H&M, PVH PVH +3.1%, VF
Corporation VFC +2.5%, Zara, and C&A, reinstated and paid for orders after international pressure
last year (I joined in those calls, known as the #PayUp campaign), a staggering $20 billion worth of
orders placed prior to the pandemic and in various phases of completion have not yet been paid
on. The pandemic revealed in fresh detail the ghastly inner workings of the industry and the power
that giant apparel companies wield over their manufacturing partners, many of whom are terrified
to speak out against brands lest they be blacklisted from future orders. The crisis also revealed the
contract terms between brands and factories that underpin this unfair system. Contracts written by
Arcadia (Topshop) and Kohl’s, for example, grant the retailers the right to cancel orders for almost
any reason, even though these terms violate international norms such as the UN Guiding
Principles on Business and Human Rights (UNGPs). That’s according to “Farce Majeure,” a policy
paper released last year by the European Center for Constitutional and Human Rights, the
International Lawyers Assisting Workers Network, and the Worker Rights Consortium. Sarachek
says that since the pandemic, at least one large apparel retailer has rewritten its purchase order
contracts to include these unethical blanket provisions to cancel whenever they please. What’s
more, contracts often stipulate that bankruptcy and other legal proceedings must take place in the
brands’ home country and at the suppliers’ expense, in the event they lose. This puts
manufacturers at a further disadvantage. Jeffrey Vogt, the legal director of the Solidarity Center
and co-author on the “Farce Majeure” report says that the contracts are one-sided by design.

• Lululemon Tests Whether Secondhand Apparel Retailing Is Sustainable - Lululemon LULU

0.0% Athletica is the latest retailer to dip its toes into the secondhand, AKA recommerce or resale,
clothing market. The yoga-inspired chain announced that it is launching a pilot program at
participating stores in California and Texas to determine the viability of this new line of business
that places sustainability at the heart of its marketing to consumers. The test, dubbed “Like New,”
will give owners of Lululemon’s clothing the opportunity to trade in previously purchased
merchandise to be resold, recycled or otherwise repurposed by the retailer. Lululemon has
pledged that one hundred percent of all profits generated through Like New will go into
investments in other sustainability initiatives it pursues. There was some disagreement among the
experts on the RetailWire BrainTrust in an online discussion last week, however, about the
desirability of used workout clothing. The Lululemon test program will put the retailer in the same
space as a growing number of businesses that are taking similar approaches. Nike NKE +0.3%
announced last week the launch of Nike Refurbished, a program that enables sneaker owners to
return their shoes within 60 days of purchase for resale. The items selected are cleaned and sold

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 to customers at a discount to buying the same shoes brand new. Nike is initially offering
Refurbished shoes for sale in 15 stores before it further expands later this year and in the future.
Levi Strauss opened its LevisSecond online store last year.

• Cargo Pants and Outdoor Slippers Are Hot, as Americans Return to Stores - Pent-up demand
and comfortable styles are fueling a rebound in U.S. clothing sales as Covid lockdowns lift; ‘2-mile
fashion’. It’s time to ditch the sweatpants. People are dressing up again—sort of—as they venture
out to social events and prepare to return to the office. Pent-up demand, combined with stimulus
checks, rising vaccine rates, new styles and the weight that many people gained or lost during the
pandemic, is expected to drive a surge in clothing sales not seen in years, according to industry
executives, shoppers and analysts. In the past few weeks, pants with buttons and zippers have
begun outselling those with drawstrings or elastic waistbands at L.L. Bean Inc. At Saks Fifth
Avenue, sales of dresses, blouses and sandals are exceeding levels not seen since spring 2019.
And employees at Haggar Clothing Co.’s distribution center are working overtime to replenish
trousers and blazers at department stores and other retailers that sell its clothes. “The fact that
sales came back so strongly, so quickly before offices reopened speaks to the need for people to
dress up as they get out there and socialize,” said Michael Stitt, Haggar’s chief executive officer.
Foot traffic to apparel stores has rebounded almost to pre-pandemic levels. Visits were down 3.4%
in the week beginning April 5, compared with the same week in 2019. Other chains, including
American Eagle Outfitters Inc. and The Buckle Inc., have also reported a return to pre-pandemic
sales levels, and more retailers are expected to follow as they report earnings in coming weeks,
according to UBS Group AG analyst Jay Sole. On Thursday, Moody’s Investors Service revised its
outlook for the U.S. retail and apparel sector to positive from stable, with expectations that apparel
chains, department stores and off-price retailers like T.J. Maxx will see the biggest recovery in
operating profit over the next 12 to 18 months. The recovery could be short lived, though, if
spending shifts back to travel and other experiences as more of the economy reopens, said
Moody’s senior credit officer Mickey Chadha. Don’t expect to see everyone wearing suits and
pumps again. Clothing styles were already turning more casual before the pandemic, and the past
year, spent in loungewear and slippers, supercharged the trend. Many people don’t want to go
back to a constricted way of dressing, yet they still want to look presentable when they leave the
house. “People are figuring out ways to take their casual clothes out of the house,” said Nata Dvir,
Macy’s Inc. chief merchandising officer, noting that “indoor/outdoor” is a top search term for
slippers on Macy’s website. “People want to be comfortable, but they also want something new
and fresh in their wardrobe,” she said. On weekly conference calls during the pandemic,
employees at Randa Apparel & Accessories talked about how they had gotten into the habit of
wearing sweatpants and slippers to the grocery store or Starbucks.

• Luggage and Leather Goods Market to Witness Rapid Growth by 2027 | Knoll, American
Leather, Aero Leather Clothing - Luggage and Leather Goods Market research is an intelligence
report with meticulous efforts undertaken to study the right and valuable information. The data
which has been looked upon is done considering both, the existing top players and the upcoming
competitors. Business strategies of the key players and the new entering market industries are
studied in detail. Well explained SWOT analysis, revenue share and contact information are
shared in this report analysis. “Luggage and Leather Goods Market is growing at a High CAGR
during the forecast period 2021-2027. The increasing interest of the individuals in this industry is
that the major reason for the expansion of this market”. Top Key Players Profiled in this report are:
Knoll, American Leather, Aero Leather Clothing, Samsonite International, VIP Industries, LVMH
Moet Hennessy Louis Vuitton, Timberland, Johnston & Murphy, Woodland, Hermes International
SA. This report provides a detailed and analytical look at the various companies that are working to
achieve a high market share in the global Luggage and Leather Goods market. Data is provided
for the top and fastest growing segments. This report implements a balanced mix of primary and
secondary research methodologies for analysis.

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 https://neighborwebsj.com/news/6193629/%EF%BB%BFluggage-and-leather-goods-market-to-
witness-rapid-growth-by-2027-knoll-american-leather-aero-leather-clothing/

• Algorithms vs. humans: Who's better at predicting fashion trends? - These days data is
plentiful, useful and fast. But some in the industry warn that old fashioned merchants are
undervalued at a crucial time. https://www.retaildive.com/news/algorithms-vs-humans-whos-better-
at-predicting-fashion-trends/599050/

Europe

• Asda Introduces Secondhand Apparel in 50 Stores - Retailers of all types and sizes are
seeking ways to prepare for a secondhand and vintage apparel boom—even U.K. supermarket
chain Asda. The retailer announced a new partnership between its clothing brand George at Asda
and vintage fashion wholesaler Preloved Vintage Wholesale (PVW) that will introduce secondhand
fashion in 50 of its stores. The concept gives a new lease of life to vintage, retro and secondhand
branded garments sourced by PVW. It will be offered at locations in London, Bristol, Birmingham,
Edinburgh and Brighton. Any brand that is worthwhile will want to own this market because this is a
significant shift with how people shop.” Berlin-based e-commerce giant Zalando is following suit
and expanding upon its pre-owned shopping and selling initiative. In April, it announced that it
would open up its resale platform to seven new markets. Brands such as Levi’s and Guess have
also joined the resale wave, allowing customers to purchase secondhand items through their
channels.

• UK textile & footwear online sales grew 10.9% MoM in March 2021 - Online spending in the UK
increased by 0.6 per cent MoM in March 2021, with strong growth in textile, clothing and footwear
stores of 10.9 per cent. This was the largest monthly growth in the sector since June 2020 with
feedback from retailers suggesting that the upcoming easing of coronavirus restrictions had
prompted consumers to update their wardrobes. The proportion spent online decreased to 34.7 per
cent in March 2021, down from 36.2 per cent in February 2021 but still above the 23.1 per cent
reported in March 2020, according to the report released by the Office for National Statistics
(ONS). The value of online spending did increase in March, but spending in-store increased at a
faster rate. Retail sales volumes continued to recover in March 2021, with an increase of 5.4 per
cent when compared with the previous month reflecting the effect of the easing of restrictions on
consumer spending. Sales were 1.6 per cent higher than February 2020 before the impact of the
coronavirus pandemic, the report said. Despite strong March figures, retail sales in the UK for the
first quarter have been subdued overall. In the three months to March 2021, retail sales volume fell
by 5.8 per cent when compared with the previous three months, with strong declines in both
clothing stores and other non-food stores as a result of the tighter lockdown restrictions in place.
Total retail sales levels for both the amount spent and quantity bought were lower than pre-
pandemic levels in both January and February 2021. However, March marked a return to sales
levels higher than those witnessed in February 2020, before the pandemic began, despite
continued restrictions to non-essential retail, as per ONS.

• Death of the High Street: Biggest retailers to disappear during Covid pandemic crisis - High
Street retailers continue to crumble under the pressure of extended closures brought on by the
coronavirus, with some of the biggest household names falling victim in 2020. High street retailers
across the UK started 2020 facing tough conditions as customers increasingly looked towards
online competitors - but no-one could have predicted the level of turmoil in store. The coronavirus
pandemic led to temporary closures, social distancing and dwindling tourist numbers, which all
weighed on UK towns and cities. A raft of retailers cut jobs, closed stores and secured
restructuring deals to survive. However, for some companies, none of these measures were

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 sufficient to preserve their place on the high street. Here is a list of the biggest retailers to
disappear from local high streets in 2020:
o Mothercare - The health, beauty and baby products chain was the year's first major
casualty, shutting the doors of its UK stores for good after 59 years. Mothercare's UK
business collapsed with the loss of 2,500 jobs and 79 stores after failing to secure a
rescue deal. The company underwent a Company Voluntary Arrangement (CVA)
restructuring in 2018, shutting a raft of stores, but tumbled into administration a year later
after failing to turn around its fortunes. Mothercare St Enochs Centre, Glasgow, before the
company went administration - "My daughter is 17 months old and I got everything for her
from here," said mum Christina Robinson, before her local Manchester Fort branch closed.
"I'm having another child and I don't know where I'm going to go for everything." Many of
the 60 staff members at the branch who lost their jobs last November had been there
when it opened in 2015. Next to the till was a white board at the top of which was written
"R.I.P Mothercare Manchester August 2015 - January 2020". Underneath that staff have
been leaving their own messages. "Thank you to our loyal customers", the majority say.
Mothercare still sells its products in the UK through Boots stores and has a franchise
operation overseas.
o Beales - The 139-year-old department store chain opened its doors for the final time in
March, as the pandemic started to have an impact on retailers. Beales tumbled into
administration at the start of the year, announcing plans to shut 12 of its 23 outlets, as
talks with potential buyers faltered. The company employed approximately 1,050 people
before announcing its first closures. However, the coronavirus crisis speeded its demise,
with the group shutting its final stores weeks earlier than planned after the outbreak meant
sales took a nosedive.
o Carphone Warehouse - In March, technology retail giant Dixons Carphone wielded the axe
on its Carphone Warehouse chain, closing all of its UK stores. The move hit 531 outlets
across the country and almost 3,000 workers. However, the group said some 1,800
affected staff would be given new roles elsewhere in the business. The firm said in the
spring it was part of the "next step in its transformation" and would now focus on selling
mobile devices in 305 big Currys PCWorld stores and online instead. Chief executive Alex
Baldock blamed "unsustainable" losses of £90million a year for the decision, which came
just days before Britain was thrust into lockdown on March 23. Its 70 Carphone
Warehouse stores in Ireland remained open and its international operations were
unaffected. The move reflected a sharp decline in the Carphone Warehouse brand after its
£3.8 billion "merger of equals" with Dixons in 2014.
o Cath Kidston - The retro-inspired retailer tumbled into administration in April after a
downturn in profitability. The company closed all of its 60 UK stores, with the loss of 900
jobs, as the pandemic proved to be the final straw. Months later, it said it had secured new
funding from parent company Baring Private Equity Asia to return as an online-only
operation. However, the brand made a small high street comeback earlier this month
following the rescue deal. The group reopened its flagship store in London's Piccadilly
ahead of Christmas, although it said it was an "experiential" store to showcase products it
will sell online. The 7,040 sq ft store had been designed to fit alongside the shop's digital-
first strategy of showcasing a selection of products. In October the company announced a
new core focus on digital acceleration and global growth, after completing administration. It
says it has now realigned its cost base and structure to create an “economically viable
operating model” as a brand-led, digital first retailer.
o Laura Ashely - Laura Ashely was one of the first high street firms to go into administration
after lockdown. The 67-year-old company said it would permanently close 70 stores in
mid-March, with plans to cut 268 office jobs and furlough more than 1,500 workers. It was
bought by investment firm Gordon Brothers to keep trading online in the UK. However,
while the stores might not be reopening, there are plans afoot to bring back homeware to
the high street by selling in Next’s 500 UK stores from Spring.

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 o TM Lewin - Formal menswear sales dived after the pandemic struck, weighing on already
troubled retailer TM Lewin. Early in 2020, the company was bought by Stonebridge Private
Equity through its subsidiary Torque Brands. Just two months later, the new owners
revealed plans to close the 122-year-old firm's entire network of 66 shops, with the loss of
around 600 jobs. The group said it was switching all sales to the internet in a bid to save
the brand in the post-Covid retail environment. The company said in the summer it could
not afford the rent bill and other costs for its stores, which had all been shut since March. It
cited the pandemic for its decision to steer away from physical outlets. "This has forced
our hands to focus on a radical overhaul of the business model, rebuilding from the ground
up in a fashion we deem fit for the years to come," a spokesperson said. In a statement,
Resolve, which was hired to restructure the business, said: "After considerable review, and
due to the many issues currently being experienced by high street retailers, it has been
determined that the future of the TM Lewin brand will be online-only."
o Oasis and Warehouse - More than 1,800 jobs were lost after sister fashion chains Oasis
and Warehouse said they would not reopen any of their stores again in April. The Oasis
Warehouse group, which had 92 branches and 437 concessions at department stores, had
been owned by failed Icelandic bank Kaupthing. Administrators for Kaupthing attempted to
dispose of the brands in 2017 but held on after failing to secure a buyer. In 2020, the
brands themselves needed administrators and wound up their retail store business after
failing to find last-minute suitors. Nevertheless, the brands have had a new lease of life
online after Boohoo bought them to sell through its website later in the year. The retailer
announced the deal as it unveiled "very strong" trading despite the coronavirus crisis, with
UK sales surging 30 per cent in the three months to May 31. A spokesperson said at the
time: said: "Oasis and Warehouse are two well-established brands in the UK targeting
fashion-forward shoppers and are a complementary addition to our portfolio of brands."
o Oliver Sweeney - Shoe retailer Oliver Sweeney shuttered all its stores for good after hiring
administrators during the summer. The company closed its five stores, in London,
Manchester and Leeds, but said it would continue to operate online. Chief executive Tim
Cooper said in July he would continue to lead the business, adding that he was
"disappointed" about the store closures but was "confident" about shifting the group online.
The retailers chief operating officer Chris Webster left earlier this year. The luxury
menswear retailer was founded in 1989 and is known for its hand-crafted leather shoes.
o Evans - Plus-size clothing brand Evans became the first in the Arcadia stable to be bought
out of retail giant's administration process earlier this month. However, the group's £23
million takeover by Australian group City Chic did not include its bricks and mortar
business. As a result, Evans said it would not reopen its five remaining UK stores. The
deal will also raise questions over whether other Arcadia brands, such as Wallis, Burton
and Dorothy Perkins, could also have online-only futures and disappear from the high
street for good.
o Debenhams - Debenhams is expected to cease trading for its final time in the new year,
saying it will shut all its stores by March at the latest unless a remarkable rescue deal is
secured. The company is currently going through liquidation and selling off stock after talks
with JD Sports over a potential deal collapsed earlier this month.

• JD Sports partners with footwear resale firm - BURY – British apparel retailer JD Sports has
partnered with footwear resale firm Sole Responsibility to mitigate the volume of shoes going to
landfill by giving them a new life. Huddersfield-based Sole Responsibility accepts returned,
subprime and otherwise unwanted footwear, cleans and repairs them and sells them via an eBay
channel. For JD, it’s an opportunity to mitigate the environmental impact of its operations by
outsourcing the end-of-life management of the shoes it sells.

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 • The great British retail reopening - Selfridges is planning an outdoor SoulCycle fitness studio,
central London’s Oxford Street has a Spotify “shopping playlist” and designer Stella McCartney is
serving up vegan goodies and live streaming talks at her Mayfair flagship. Selfridges is projecting
optimism with window displays linked to nature, while Harrods is trumpeting big-brand
collaborations: a new Hermès Femme boutique, a Givenchy pop-up and plans for a Loewe
takeover of the first floor to celebrate “beach hut bliss” as part of its Paula’s Ibiza collab.

• Online to stay strong, hyperlocal retail to benefit - Lessons from China and the US suggest
consumers’ online habits will stick post-pandemic. In the US, where stores were not compelled to
close, footfall is broadly around 62 per cent of 2019 levels, according to McKinsey. In China,
footfall is 10 to 15 per cent below 2019 levels. “The digital channels have held up pretty well. Yes,
there is excitement that stores will reopen but equally, I don’t think this diminishes in any way the
importance of online,” says Anita Balchandani, partner and EMEA lead of apparel, fashion and
luxury at McKinsey. She adds that 92 per cent of consumers say they will continue their online
shopping behaviours. The real winners in the physical space may be hyperlocal stores, suggests
Balchandani. Speedy Freight, which partners with several national UK retailers, said retail
deliveries in March were down around 70 per cent on the usual pre-lockdown volumes —
suggesting plenty of caution about a strong rebound in spending. Smaller labels are taking no
risks. “For SS21, we’ve made the decision to cut back on the product we produce and optimise
what we already have. We called it RÆJUVENATE as a reaction to our unique times,” says Jolyon
Bexon, head of retail at Ræburn.

• Asos calls for mandatory human rights due diligence legislation - Online fashion retailer Asos
is calling for the implementation of mandatory human rights due diligence legislation in the UK to
strengthen the 2015 Modern Slavery Act, as part of the publication of its fifth Modern Slavery
Statement. Asos claims to have become the first fashion company globally to include independent
NGO commentary in its Modern Slavery Statement.

• Beyond Disruption: Everlane’s Next Chapter - After public scandal threatened its ethical image,
CEO Michael Preysman believes the L Catterton-backed disruptor can still win on radical
transparency even as competitors lay claim to the sustainable fashion space. Everlane learned a
hard lesson this past year: radical transparency, the slogan that helped position the brand as a
leader in the crowded online fashion marketplace, is a moving target. The direct-to-consumer label
had become a go-to for a fast-growing cohort of conscious consumers, who were won over to the
brand’s T-shirts, jeans and other wardrobe staples by its promises to partner with ethical factories,
source only the best materials and expose information about the true cost of every product.
“Radical transparency” defined the brand; Everlane even filed to trademark the term in 2017. But
though Everlane was early to build a sense of mission into its messaging, its approach was still
evolving and so were consumer expectations. The company made a splash with its launch of
“clean” denim in 2017, and a year later said it would be virgin plastic free by 2021. But it had been
slow to publish more targets or update on its progress. A crowd of rivals now boasted similar
credentials. Even as sales continued to rise, Everlane was beginning to attract a hum of criticism
that the most radical thing about its operations was its marketing. But last year, it was planning to
start talking more about its efforts to reduce its environmental footprint, starting with a flagship new
commitment to only use organic cotton by 2023.

India

• Big Bazaar aims to double online sales contribution, helped by express home delivery service - n
certain markets, Big Bazaar is already getting around 40 per cent of its sale order online, said
Future Group CMO - Digital, Ecommerce and marketing Pawan Sarda. The two-hour home
delivery service has also got an encouraging response from customers amidst the sharp rise in

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 pandemic cases and travel restrictions imposed by several state governments to break the chain of
the COVID-19 infection. Big Bazaar had started taking orders online last year after the pandemic
started. Presently e-tailers like Amazon, Big Basket are providing express delivery in select areas.
Swiggy is also providing a two-hour grocery delivery service in over 125 cities in India during this
pandemic. Big Bazaar, under its first online shopping festival, which started from May 1 to May 9,
will provide free home delivery, cashback and offers on product.

• Fresh curbs leave apparel retailers’ hopes in tatters - Sales in April could decline by 20-50%
from the previous month, warned clothing retailers. Jan and Feb had seen improved footfall owing
to sales events and declining covid cases. Clothing firms that saw sales rebound in the March
quarter are again staring at a slump in demand as partial lockdowns, closure of malls and curbs on
late evening movement keep consumers home. Sales in April could fall by 20-50% from March,
retailers said. In Maharashtra, where non-essential stores have been ordered to shut for the full
month, the impact is likely to be worse. January and February saw improved footfall owing to sales
events and declining covid cases, analysts at ICICI Securities said in a report on Monday.

• Second wave to impact fashion retailers, revenue to hit pre-COVID levels only in FY23:
Report – The rating agency said the industry was recovering well till the second wave hit and
sales had touched over 70 per cent of pre-COVID-19 levels by the December quarter of 2020. "A
sharp spike in the number of new COVID-19 cases since March 2021 throws up strong headwinds
for the sector." The second wave of coronavirus infections reported from various pockets of the
country has come as a "strong headwind" to fashion retailers, and is expected to delay the
recovery back to pre-COVID-19 levels till FY23, domestic rating agency ICRA said on Sunday. The
industry is set to show a revenue growth of 23-25 per cent on a low base in 2021-22, but that will
not be sufficient to get the business performance back to the pre-COVID-19 levels, ICRA said in a
report. The rating agency said the industry was recovering well till the second wave hit and sales
had touched over 70 per cent of pre-COVID-19 levels by the December quarter of 2020. "A sharp
spike in the number of new COVID-19 cases since March 2021 throws up strong headwinds for the
sector." Its Sector Head Sakshi Suneja said industry players adopted to several cost-saving
measures by fashion retailers, including rental negotiations, salary and overheads rationalisation in
FY21 to protect the businesses. They are expected to continue the same in FY22 also pending a
revival in discretionary demand. "This is expected to support the operating profit margins (OPM) at
around 4.1 per cent in FY22, though these will remain lower by around 2.50 per cent from FY20
levels," she said. Credit profiles of retailers will improve in 2021-22 as compared to the year-ago
period courtesy de-leveraging in balance sheets after capital infusions in FY21, she said. The
credit profiles will remain weaker than the pre-COVID-19 levels, Suneja added. "Expectations of
increasing and widespread availability of vaccines in the coming months will drive recovery of the
sector's revenues and profitability to pre-COVID-19 levels in FY23," its co-group Head Priyesh
Ruparelia said. The agency said the fashion retailers industry is set to invest Rs 2,400 crore in
capital expenditure in 2021-22, largely on store expansions that got deferred as a result of the
pandemic, and added that attractive rentals are a pull. The pandemic has also spurred the
adoption of online retailing in India, with most of the retailers reporting more than 50 per cent jump
in online sales in the first nine months of the fiscal albeit on a low base, leading to increased
proportion of online sales within the overall mix, Ruparelia said. In contrast to the fashion retailers,
the food and grocery retailers fared relatively well during the pandemic and have reverted to pre-
COVID-19 level sales and profits in the third quarter of 2020-21 itself, the agency said. While the
segment is yet to see a recovery in footfalls to pre-COVID-19 levels, a higher transaction size is
adequately compensating for the same, the agency said. The conversion rate and spend per visit
improved in H2FY21 as consumers undertook need-based buying to avoid repeat visits, it added.
The food and grocery retailers are set to deliver a revenue growth of 8-10 per cent in 2021-22 as
this segment is essential and will witness limited impact on sales due to the rising infections, the
agency said. However, their operations in the first quarter of 2021-22 remain susceptible to

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 restrictions on store operating hours as well as local lockdowns, which restrict the sale of general
merchandise, it said. It also warned that continuations of lockdowns after July is a downside risk.

• Fashion & Lifestyle brands witnessing decline in online sales - “People have already gone
through a lot of hardship and they see this is a crisis that is not going to go away soon,” said Dhruv
Bogra, country manager for Forever New that has seen online traffic in April decline by 30%
compared to March. “This is creating greater anxiety and uncertainty than before.” Fashion and
lifestyle brands, already reeling under a huge drop in sales, are now facing another crushing 20-
30% decline in their online sales amid a deadly second wave of Covid-19 cases. “People have
already gone through a lot of hardship and they see this is a crisis that is not going to go away
soon,” said Dhruv Bogra, country manager for Forever New that has seen online traffic in April
decline by 30% compared to March. “This is creating greater anxiety and uncertainty than before.”
Online has been a saviour during the pandemic last year when e-commerce businesses soared
double or triple times for most brands. But in the latest spike this year, even online is dragging as
sales have dropped 20-30% in April compared to March. “People are more concerned about their
near and dear ones and the immediate priority is health and safety of family and friends and that’s
where shopping has taken a back seat,” said Sundeep Chugh, CEO of Benetton India, one of the
largest online selling brands in India. Chugh said online sales have plummeted by 15-20% after the
first week of April this year. Omni-channel enabler Ace Turtle, which handles end-to-end online
sales for brands including Fossil, RayBan, Lifestyle, Skechers, Tommy Hilfiger among other labels,
said e-commerce sales for the brands it is handling have declined by 12-14% in March-April
compared to January-February. Rival ANS Commerce that manages Jack & Jones, Bath & Body
Works, Celio and Aldo among other labels, said e-commerce orders were down 20% on Sunday –
figures available for latest daily orders - compared to any other single day average. Some brands
have again introduced deep discounting in April – traditionally a good business month – in a bid to
prop up sales amid lockdowns in Delhi and Mumbai and weekend curfews in many other cities.
Brands are offering steep discounts through text messages or on the social media. Marks &
Spencer is providing up to 50% discounts, Acics is offering flat 40% plus an additional 15%, Jack &
Jones has flat 50% off while Celio also had flat 40% plus 10% rebate of pre-paid orders. However,
some brands are saying that there is no point offering discounts as malls in bigger cities are shut
and consumers are also curtailing discretionary online purchases. “When markets are closed and
you walk-ins are down by 70%, there is no point going on a sale,” said Chugh of Benetton.

• Festivals bring some respite for apparel retailers - Pent-up demand during this year's longer-
than-usual festival season, followed by the onset of weddings and winters in north India, helped
retailers sell apparel after months of struggling to get shoppers back into their stores. India’s top
apparel retailers reported 60-90% of last year’s sales this festival season as shoppers walked into
stores to buy ethnic wear, children’s garment, and winter and occasion clothing. Retailers such as
Arvind Fashions, V-Mart, Spykar and Biba said pent-up demand during this year's longer-than-
usual festival season, followed by the onset of weddings and winters in north India, helped retailers
sell apparel after months of struggling to get shoppers back into their stores.

• Retailers get serious about casualwear as it takes centrestage in global fashion - The
fashion industry has probably not witnessed a force more unrestrained than causal wear in the
past. In the last decade, casualization has swept through global fashion sensibilities with unfl
inching determination and today, it has entrenched its stronghold as a wardrobe staple throughout
the world. Reports suggest that more than one third of the global population has embraced casual
wear in the few years and the trend exhibits no signs of waning. In fact, in the last year, consumer
inclination towards casual wear has increased manifolds due to the COVID-19 pandemic. As the
world became restricted to their homes, fashion senses started gravitating towards comfortable
and presentable clothes that can easily transition from work from home to grocery-runs and social-
media appearances. Thus, demand for casual wear skyrocketed globally after the lockdown.

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 Casual looks which are both comfortable and presentable will witness growth,” Naidoo concludes.
https://www.indiaretailing.com/2021/04/12/fashion/retailers-get-serious-about-casualwear-as-it-
takes-centrestage-in-global-fashion/

• Second wave hits small apparel manufacturers: Report - With the surge in covid-19 cases
forcing closure of non-essential stores in several states, apparel manufacturers could be staring at
delayed orders yet again. A report by brokerage Motilal Oswal tracking the business of malls,
apparel retailers, as well as apparel manufacturers, paints a grim picture for the manufacturing
sector whose business is directly dependent on stocks moving at large retailers. Retailers were
operating at sales of 70–80% pre-covid levels over January–Feb’21. However, the industry has
once again been put on the back foot due to fresh lockdowns being imposed; the impact from the
second wave could be more severe given the already weak condition of many players," the
brokerage said in a report on the apparel manufacturing industry after speaking to key players and
industry associations such as the Clothing Manufacturing Association of India (CMAI). The CMAI
said a large proportion of smaller players are closing down their businesses, plagued by an
uncertain outlook, stretched working capital and liquidity, and rising raw material costs. Roughly
80% of the apparel manufacturing sector remains largely unorganized and highly dependent on
cash and credit, which means smaller players are the first to get impacted with state-level closures,
it said. Apparel manufacturers have faced a cut in orders both from domestic as well as export
markets. That's because the pandemic lowered the demand for formal wear and subsequent
lockdowns meant an inventory pile-up with retailers, the report said. “Apparel manufacturers
commenced delayed operations in late November amid a huge inventory pile-up at retailers.
Although manufacturers were allowed to operate after the lifting of lockdown restrictions last year,
they remained distressed due to no fresh orders—weighed by the lack of demand from retail stores
and consumers," the report said. For manufacturers, a high credit period remains a concern. “The
apparel retail industry has low entry barriers, with low capital requirements and the easy availability
of products and resources. The credit period has historically been high in the industry, which has
burdened manufacturers and vendors. Manufacturers have always been highly dependent on
credit, limiting the liquidity and growth prospects in the industry," it said. The report said CMAI has
been extending support to its members. This includes introducing the concept of bill discounting
and credit funding which would provide manufacturers easy access to liquidity.

• Apparel retailers to post operating losses in Q1FY21 as revenues plunge 80% - After a weak
March quarter (Q4), apparel retailers are expected to face the brunt of the lockdown in the June
quarter, with revenues falling over 80 per cent as compared to the year-ago quarter. Unlike
retailers, such as Avenue Supermarts, which get a majority of sales from groceries, apparel
retailers have been operating with a minimal number of stores and are held back by ongoing
restrictions. With just one month of sales in the quarter, analysts at Antique Stock Broking believe
that general trade and e-commerce gained market share at the expense of modern trade, as
consumers avoided

China

• Cracking China’s apparel market in 2021 - Finding effective and efficient ways to sell online are
the only solutions left to apparel brands wanting to grow in China. Consumers are increasingly
turning towards online retailers to buy apparel, and in China, e-commerce now accounts for over
one quarter of all non-food retailing. How can brands succeed in this competitive market?
According to SGS, one of the world’s leading inspection, verification, testing and certification
companies, headquartered in Geneva, Switzerland, it would be wrong to think the 2020 pandemic
caused consumers to shift their shopping habits away from ‘bricks and mortar’ stores towards
online retailers. Instead, it is better to view Covid-19 as an accelerator of trends that were already
in motion. This acceleration has, however, been dramatic, and it has been global. In 2018, only

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 22% of US citizens shopped online for groceries but that figure shot up to 42% in 2020. While the
catalyst for this increase might have been the pandemic, it does not look as if the trend will be
reversed when things return to normal. Consumers inured to online When Chinese apparel stores
reopened following lockdown, they reported footfall levels of 50-60% below pre-crisis figures. The
demand for fashion had not diminished, but what had changed was the desire of people to visit
shops. At the same time, a protracted period at home has meant consumers have become inured
to the process of shopping online. During Paris Fashion Week in 2020, Chinese showroom agency
DFO utilised livestreaming to reach Chinese buyers. It was estimated its audience was double the
buyers who would have normally been able to travel to Paris. This resulted in the agency hitting
80% of its sales targets, with 95% of those sales being made online. This trend is not going away.
It has recently been announced that all 93 shows for Paris Fashion Week Autumn/Winter 21/22 will
be virtual and even when it is possible for buyers to return to the catwalk, a sizeable constituent of
consumers will remain online. Advantages - Online retailing has many advantages for consumers.
As the DFO figures demonstrate, a virtual showroom can reach a greater number of people than
can physically sit beside the catwalk. Even for consumers on a high street budget, online shopping
gives them greater choice and, when it is done correctly, is a more convenient and practical
experience. E-commerce also gives the consumer access to better information about a product,
enabling them to make value judgements. More and more consumers are looking for transparency
when choosing a product and they want to see evidence of greater sustainability and better quality.
Online retailing allows manufacturers and brands to deliver this information with the click of a
button. By accessing the correct part of the retail website, the consumer can easily find the
accreditations and standards to which the manufacturer and the product conform. It is predicted
offline sales will continue to drop as businesses adjust to a post-pandemic world. The decline in
Europe is expected to be between 8% and 13% and in the US between 22% and 27%. Finding
effective and efficient ways to sell online are therefore the only solutions left open to apparel
brands that want to grow their market share. China Omnichannel - China has a growing,
connected middle class with an extensive social media infrastructure. This has led to the creation
of a highly digitalised retail ecosystem that was ready estimated to be worth US$1.5 trillion in 2019,
accounting for a quarter of all sales. Omnichannel retailing uses a wide variety of mechanisms to
sell to consumers, shifting the market focus from key opinion leaders (KOL) to key opinion
consumers (KOC). The key to succeeding in an omnichannel market is the ability to map both
product quality and the target audience’s engagement with the latest trends. Brands that are able
to successfully chart this data will be at an advantage because they will have the information to
bring the right product to the market at the right time, and via the right channel. In a dynamic and
competitive market like China’s, brand success is based on the ability to respond quickly to
changes in consumer demand.
The SGS solution - SGS offers a comprehensive, vertical omnichannel solution that helps brands to
successfully enter the Chinese e-commerce ecosystem. Built on the back of over 20 years of experience in
helping Chinese manufacturers navigate the complexity of national and international regulations, the SGS
China Omnichannel Solution incorporates:
o Market compliance – training on regulations and protocol development.
o Product compliance – material and product testing, label reviews, factory audits, etc.
o Consumer engagement – through livestreaming events and trusted certification labels
such as the SGS Independently Checked Mark (IC Mark)
o Service enhancement – return and failure rate analysis, market spot-checks, random
sampling checks
o With more than 89,000 employees, SGS operates a network of over 2,600 offices and
laboratories around the world.

Russia

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 • MySize launches B2C instant in-app sizing recommendations - MySize, the developer and
creator of e-commerce measurement solutions, has announced the launch of an application with
added direct-to-retailer sizing. The solution provides customers shopping for footwear and apparel
online with highly-accurate sizing for more than 120 retailers, with recommendations shown
directly on the retailers’ sites when navigated to from the MySizeID app. It is designed to further
personalize the shopping experience for online customers, connecting consumers and brands
closer together. The direct-to-retailer sizing integration is designed to reduce the number of people
ordering products in the incorrect size, which is particularly important in light of estimates of up to
40% return rates for e-commerce retailers that hurt both the bottom line and the environment. By
empowering the customer with their highly accurate sizing, MySize helps preemptively convert
orders that may have resulted in returns into sales where the customer orders a product they’re
much more likely to keep. Users of the MySize app, which leverages sensors already built into
customers’ smartphones, can instantly obtain highly accurate clothing sizes in any brand’s apparel.

• REFILE-German retail sales jump in March as lockdown measures ease - German retail sales
posted their biggest year-on-year increase in March since the start of the COVID-19 pandemic,
data showed on Monday, as the relaxation of some lockdown measures boosted purchases of
clothes and shoes. The Federal Statistics Office said retail sales jumped 11.0% compared to the
same month a year earlier in real terms after an upwardly revised fall of 6.6% in February. The
March reading overshot a Reuters forecast for a decline of 0.3% Sales of textiles, clothing, shoes
and leather goods rose 27.7% compared to the same month a year earlier, while retail trade with
goods sold in department stores was up 23%. Online retailers continued to benefit from shifting
consumer habits with sales up 42.9% compared with a year earlier. German states started allowing
shops to offer so-called appointment shopping deals, called “click and meet” in March. (Reporting
by Caroline Copley Editing by Riham Alkousaa)

Philippines

• Zalora releases inaugural sustainability report - Zalora has released its inaugural sustainability
report highlighting the progress it has made on its sustainability strategy set out last year, which
hinges around four key pillars: environmental footprint, sustainable consumption, ethical sourcing,
and responsible workplace and community engagement. In the report, the fashion and lifestyle e-
commerce platform revealed that 86 through recycling, while 68 percent of its delivery and internal
packaging is made of sustainable materials. All of Zalora’s Tier 1 private label factories are also
now engaged in training programmes. “In the last year, we have seen more than ever how people,
communities and the planet are inextricably linked, and sustainability is becoming even more
pertinent against the growing awareness of fashion’s pollutive impact on the environment,” said
Zalora Group CEO Gunjan Soni in a statement. Currently, more than 90 percent of the company’s
customers say they are interested in shopping for sustainable products. “As an e-commerce
platform working with over 3,000 brands and serving millions of customers across the region, we
recognise that we have the scale, capacity and responsibility to inspire more conscious and ethical
consumerism,” Soni said. During the year, the company also launched its first sustainable capsule
collection in collaboration with Tencel fiber, under its Zalora Basics Label. It also introduced Earth
Edit - a curated assortment of pieces and brands that meet Zalora’s sustainability criteria.
Currently, 5 percent of the company’s retail branded portfolio meets this criteria. Zalora also
partnered with luxury marketplace reseller StyleTribute to provide its shoppers in Singapore and
Malaysia with the option to buy second-hand luxury fashion items. Soni continued: “While we have
made some strides towards our 2022 and 2025 targets, we still have a long way to go before
achieving a fully sustainable fashion ecosystem in the region. However, I believe that with the
continued support of our team members, brand partners and customers, our collective action can
and will create incredible change.”

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